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Corruption in Cannabis: A Multi-State Saga


Recently, the burgeoning cannabis industry in New York State has captivated the attention of entrepreneurs, investors, and consumers alike. Simultaneously, we are beginning to see examples around the country of alleged corruption and illicit practices which threaten that very potential. 

As NYS patiently waits to see how their marketplace unfolds, states like Michigan and Oregon are looking back at some potentially grave missteps that many hope will not be repeated at home.


Michigan has emerged as a hotbed of bribery and illicit practices within the cannabis industry. A federal investigation into corruption within Michigan's cannabis industry has unveiled a web of bribery and misconduct starting with former House Speaker Rick Johnson. The investigation has revealed a network of individuals who allegedly sought personal gain by engaging in illegal activities.

Key players, including influential politicians, business leaders, and industry insiders, have been implicated in the scandal involving kickbacks, and pay-to-play schemes, which have compromised the integrity of the state's cannabis licensing process. 

The scandal not only erodes public trust in the regulatory processes governing the industry but also casts a shadow over legitimate businesses operating in the state. The negative repercussions may extend beyond the immediate consequences of the investigation, potentially hampering the growth and development of Michigan’s cannabis marketplace.


Oregon's thriving cannabis industry, known for its progressive approach to marijuana legalization, is facing a major upheaval as allegations of corruption begin to cast a shadow over its licensing process too.  

Shemia Fagan, former Oregon Secretary of State, finds herself at the center of a federal grand jury investigation due to her alleged ties to the cannabis industry, including providing consulting services while still in office. Fagan signed a contract with Veriede Holding LLC, a subsidiary of La Mota, one of the state’s most prominent cannabis companies. Fagan says she agreed to help Veriede research and understand cannabis laws and paths to licensure in states outside Oregon. As a former state senator, Fagan played a pivotal role in shaping Oregon’s cannabis regulations. 

New York

An NYCI investigation published in January revealed the organizations tasked with raising and managing NY’s $200 million cannabis social equity fund were ill-equipped to do so. The investigation implicated former NBA guard Chris Webber and cannabis entrepreneur Jason Wild. 

The rapid growth of the cannabis industry across the country has provided fertile ground for corruption to take root, as demonstrated by these recent high-profile cases in Oregon and Michigan. As NYS’s own fledgling industry continues to take shape, it is crucial that stakeholders and regulators work together to ensure integrity and accountability, maintain the spirit of the legislation, and cultivate a level playing field for all those involved in this new marketplace.


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