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Inside Cannabis (Sep 18th, 2019)

The autumn equinox that marks the end of the summer is just days away — and it can’t come quickly enough for a cannabis industry that has been battered by a summer of scandals. Today we look back on the biggest embarrassments, disgraces, and dirty deeds exposed in summer 2019, from corporate malfeasance to political corruption to just plain sloppy stupidity.    

1. Canadian giant Canntrust was caught growing thousands of pounds of illegal weed in July. Headline writers had a field day making “can’t trust” jokes about Canntrust, whose scandal hit a coda just hours ago when their license to grow and sell cannabis was suspended indefinitely by Canadian regulators. It’s a stunning fall from grace for a company once valued at a billion dollars. The trouble started in July when the growth conglomerate was found to be growing plants in an unlicensed area of their Ontario facility, a seemingly ticky-tack offense. But news later broke that executives knew about it and lied to regulators, and the CEO even made a promotional video in the illegal grow area. A second illegal seeds scandal in early September hardly made waves, as the company was already trying to sell itself off for pennies on the dollar. 

2. Canopy Growth grew smaller, blowing a billion dollars this summer. Founder, board chairman, and CEO Bruce Linton’s “fake it til you make it” strategy did not make it through the summer, and the company reported a staggering billion-dollar loss in just a three-month period. The runaway, profligate spending led to Linton being fired in early July from the company he founded, and he did not go quietly. The stock lost nearly half its value over the summer, putting its blockbuster Acreage Holdings acquisition in doubt. 

3. A Massachusetts mayor was arrested for taking $600,000 in bribes from dispensary applicants. Fall River mayor Jasiel Correia is actually still on the job, despite his early September arrest on bribery charges alleging that he offered dispensary license approval for six-figure cash payouts. He’s refused to step down, despite city council voting him out. It’s the mayor’s second indictment during his term, as last year he was indicted for defrauding app investors. Will Correia survive? He might, as he just made it through a primary election on Tuesday.

4. Curaleaf was slammed with an FDA warning letter for making false medical claims. Massachusetts-based CBD product maker Curealeaf came into the summer flying high, with a freshly minted billion-dollar acquisition of an Oregon vape company. But the crash came down in July when an FDA warning letter nailed them for falsely claiming their products were “shown to be effective” against Parkinson’s, Alzheimer’s, and cancer. But the company is weathering the scandal the good old-fashioned way — by making lots of political donations.

5. A top Las Vegas official was nailed for accepting gifts from dispensary applicants. The industry was shocked, shocked to find that corruption was going on in Las Vegas, as a late spring lawsuit alleged that Nevada officials gave preferential treatment to wealthy, out-of-state dispensary applicants. The allegations were confirmed last week, when the state’s top marijuana official was placed on leave for accepting meals, gifts, and offers of post-government employment from the firms who were awarded dispensary licenses. 

6. An early August FBI sting nabbed three Florida pot stock manipulators. The owners of three cannabis penny stocks (PotNetwork Holdings, Vaper Group, and White Label Liquid) had a brilliant scheme to liquidate their stocks, on the promise that they could create false interest in them afterwards to pump their value. The problem was they made this offer to undercover FBI agents, and all three men were arrested and await trial. 

7. Weedmaps did finally agree to stop listing illegal dispensaries on its platform. The multistate advertising platform Weedmaps has long listed thousands of unlicensed, underground dispensaries, making them a common enemy to legal operators nationwide. The site did announce in August that they would stop listing illegal operators by the end of the year, begging the question of why they don’t just do so right now.

8. Canadian growers Hexo were targeted by short-sellers over dodgy social media ads that allegedly targeted youth. This particular scandalous shoe has not yet dropped, but short-selling sharks are circling the waters, as the company may have illegally targeted teens with Snapchat ads.  

9. MedMen tried to void the permit of every competing West Hollywood dispensary. Sure, it’s not as bad as MedMen’s racism and sexism scandals from earlier in the year, but the powerful dispensary chain made no friends by attempting to void the license of every competitor in West Hollywood in a late summer legal maneuver. 

10. A mystery lung illness has killed seven people, and a baffled cannabis industry is terrified. This is not so much a scandal yet, because we don’t where the blame truly lays, but it’s a tragic ongoing saga affecting the entire cannabis industry. We still don’t know the true cause of the seven deaths and nearly 400 illnesses nationwide, only that the victims had been vaping. Sure, there are suspected culprits — underground labs, bootleg cartridges, and counterfeit Amazon products, among others. But until we know the root cause of the mystery lung disease, some shadow of suspicion will cover the entire legal cannabis landscape.

Joe Kukura has been the cannabis writer for SF Weekly since 2016, and his work has appeared in Thrillist, the Daily Dot, and NBC Bay Area. You can follow him on Twitter at @ExercisingDrunk.

Edited by: Kim Lyons (Pittsburgh-based journalist and managing editor at Inside).

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