Walgreen's of Weed
Let's jump right into a story from 420 Intel "Walgreens of Weed": How Pot Law's Seedy Start Created Florida's Cannabis Oligopoly"
THE SCOOP
By now, Dear Readers of the American Cannabis Report have all heard that Florida real estate / construction company owner named JT Burnette has been sentenced to 3 years in Federal Prison. The fact that he’s the husband of the CEO of Trulieve, one of the biggest cannabis companies in the US, naturally has people in our industry talking. (Imagine if the spouses of a Mary Barra or Rosalind Brewer was sent to prison for crimes directly related* to their businesses? (CEO’s of General Motors and Walgreen’s respectively) )
I’ve been hearing about this case for years, but not really connecting the dots, and I wanted to go back to really look at what happened here and why it’s all so “Florida”.
It’s important to note that Burnette’s wife, whom I'm tempted to call “Teflon Kim Rivers”, is not implicated in any of this, but BOY-OH-BOY HAS SHE PROFITED FROM HIS SHENANIGANS! (one might say the situation stinks to high heaven…)*
As Rico Lamitte would say, this is a classic case of FOLLOW THE MONEY:
The Burnette sentence is the result of a 40-count indictment that was filed in December 2018 that charged a man and a woman – former Tallahassee mayor Scott Maddox and lobbyist Paige Carter-Smith. In May 2019, a superseding indictment added Burnette as a defendant.
The case started with a Sting Operation set up by federal agents posing as real estate developers. Undercover agents fake-agreed to "... pay Burnette, Maddox, Carter-Smith $10,000 per month in exchange for Maddox agreeing to perform official acts meant to benefit the Agent’s sham development company."
“Maddox and Carter-Smith pleaded guilty to fraud, bribery and conspiracy - Maddox got 5 years up the river, Carter-Smith got 2 years and now Burnette has 3 years.
THE DEEPER DIVE
But it all started years earlier. First, in 2014, Burnette SMELLED MONEY.
He’s on record saying that he and his childhood friend, then-Florida house member Halsey Beshears, tweaked a 2014 cannabis bill that governed the state's then-fledgling medical marijuana industry by cordoning off access to commercial licenses.”
“The bill mandated that licenses only be granted to nurseries with:
a 30-year-history in the state and
the ability to post a $5 million bond.
Burnette was recorded by the FBI as saying at the time: "We didn’t know … how to grow marijuana [but] we were in the ship."
Obviously, these sneaky additions box out most applicants and growers - the court now says it's led to an oligopoly, and more specifically, provided an advantage to Burnette's Kim Rivers – she and Burnette were not married at the time - and to Beshears' brother who sits on Truelieve's board of directors and co-owns one of those 30-year Nurseries.
The plan worked: Not surprisingly one of the first licenses went to a partnership involving the Beshears family's nursery. That operation was rolled into Trulieve.
And since then, Trulieve HAS BEEN PRINTING MONEY: Trulieve now sells more than 2,000 pounds a week and just opened its 100th dispensary.
All of these scoundrels are getting their due: FloridaPolitics.com says that "The New York Times in April reported Beshears was among the prominent figures on a plane trip to the Bahamas central to the investigation of Joel Greenberg, who has since "pleaded guilty to six federal charges including sex trafficking of a child." Also on the plane were Greenberg, Gaetz and Jason Pirozzolo, chairman of the American Medical Marijuana Physicians Association.
THE LOOP BACK
Now you can FOLLOW THE MONEY across the US; Earlier this year, Las Vegas dispensary Planet 13 bought a Florida license for $55 Million.
NOTES:
* According to research from MJBiz Daily: In 2020 alone, Trulieve paid $96.7 million to Burnette Construction, according to the company’s 10-K annual report to the U.S. Securities and Exchange Commission. The projects were mostly in Florida but included $39 million for work on Trulieve’s facility in Holyoke, Massachusetts, according to the proxy statement.
Burnette incorporated the firm as Burnette Construction & Development in 1998, according to Florida Division of Corporations records, and was sole owner until gradually transferring most of his ownership in 2015 and 2016 to Caleb Burnette, who heads the Burnette commercial roofing business. J.T. Burnette then served as treasurer of Burnette Construction until stepping down in June 2019, a month after he was indicted, according to state records.
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