The State of Alaska is charging four individuals with multiple felonies after each of their cannabis operations fell to Anchorage Police Department undercover work and ensuing raids. Trials won’t be held until January and pretrial hearings will be held in November and December.
Rocky Burns, Larry Stamper, Michael Crites, and Charlene Egbe are each alleged by the state to have been operating illicit marijuana businesses in 2015, and were indicted in September.
Burns and Stamper co-owned and operated Discreet Deliveries, a delivery service with operations in Fairbanks, the Mat-Su, Anchorage, and the Kenai Peninsula; both men were charged with seven felonies and one misdemeanor.
Michael Crites operated Absolutely Chronic Delivery Co. and was charged with five felonies and one misdemeanor.
Charlene Egbe, who operated Alaska Cannabis Club, was charged with four felonies and four misdemeanors.
All defendants were released of their own recognizance on the sole condition they not sell any marijuana. Crites, Burns, and Stamper have stayed in Alaska, while Egbe has spent time in the Lower 48 on various speaking engagements for cannabis industry media outlets and publicity events.
Anchorage defense attorney Keri Brady, who served as Anchorage district attorney from 1997 to 2007, represents Egbe, who uses the name Charlo Greene in public relations. Egbe is scheduled for a pretrial conference with Anchorage Superior Court Judge William Carey on Nov. 18 and trial Jan. 4, 2016.
The Public Defender Agency will represent Crites. He is scheduled for a Nov. 23 pretrial conference with Anchorage Superior Court Judge Kevin Saxby and a trial Jan. 11, 2016.
Cannabis industry business attorney Jana Weltzin represents Burns, while Anchorage criminal defense attorney Gregory Heritage represents Stamper. Both men are scheduled for a Dec. 8 pretrial conference with Anchorage Superior Court Judge Jack Smith and a trial Jan. 11, 2016.
Lisa Kelley is prosecuting all four defendants. Kelley works from the Office of Special Prosecutions of the Anchorage division of the Alaska Department of Law.
John Skidmore, director of the Anchorage Criminal Division of the Alaska Department of Law, said the State of Alaska chose Kelley as prosecutor because the matter is largely about revenue.
“Kelley is assigned to cases that are about revenue fraud,” said Skidmore. “From the state’s standpoint, there are significant aspects of these cases that have an economic impact. That’s why they were assigned to Ms. Kelley.”
Indeed, the major issue the state has with the defendants’ businesses appears to be a question of revenue rather than public safety. Draft regulations prohibiting both marijuana social clubs and delivery services will not be adopted into code until Nov. 24, and could be amended by the Marijuana Control Board in the meantime. The only certainty is that the defendants engaged in sale prior to the issuance of business licenses, and therefore prior to the existence of taxation framework.
This past summer, Marijuana Control Board Executive Director Cynthia Franklin sent cease-and-desist letters to social clubs and delivery services, including Egbe’s Alaska Cannabis Club, Pot Luck Events in Anchorage, Wasilla’s Northern Heights, Kenai’s Green Rush Events, Crites’ Absolutely Chronic Delivery Co., and Burns’ and Stamper’s Discreet Deliveries.
Franklin’s cease and desist letters carried less than bulletproof legal weight because of the nebulous legal status of both marijuana clubs and delivery services, and was taken to be a legal suggestion rather than an order.
In the cases of Egbe, Burns, Stamper, and Crites, the Anchorage Police Department conducted undercover operations during which they purchased quantities of marijuana from individuals employed by or operating within each respective organization. Organizations that engaged in no sale, however, have not been charged, though they received the same cease and desist letters from Franklin.
Pot Luck Events and Green Rush Events, both social clubs, have been vocal about not allowing sale within their establishments, but only consumption and sharing. Consumption and sharing are legal under Ballot 2 language approved by voters a year ago, though public consumption particulars have yet to be fully fleshed out to apply to publicly accessible clubs.
Pot Luck owner Theresa Collins said she never noticed police activity in her establishment, but that it must have happened to some extent.
“I’m sure they were there,” said Collins, “but they obviously didn’t discover anything too illegal going on.”
Further provisions in draft regulations penalize those who have made money in the marijuana industry prior to business license issuance, currently scheduled for May 24, 2016, at the earliest.
“The board will not issue a marijuana establishment license to a person that … operated a marijuana delivery service, a marijuana club, or a marijuana establishment illegally without a license issued under this chapter, or otherwise violated AS 17.38, during the two years before the date the person files the application, unless the board finds that person has diligently worked with the board to comply with all current laws and regulations relating to marijuana,” the draft regulations read.
Burns adamantly claims he has made every attempt to fully “comply with all current laws and regulations,” and has been trying to get a concrete ruling of his company’s legality since he and Stamper began operating in January 2015. Weltzin argues the charges should be dismissed due to the ambiguity and lack of clarity in statute and regulations.
“Nobody knows what’s legal and what’s not legal,” Weltzin said. “And even though he asked time and time again, (Burns) didn’t get any guidance from the state.”
Burns filed pro se motions (representing himself) with the court to have his charges dismissed, his bail condition rescinded, and the venue of his trial changed. Burns filed motions Oct. 15, prior to obtaining Weltzin as legal representation.
In both Burns’ original motion and Weltzin’s reply to Kelley’s denial of the motion, it is argued that Burns was only transporting and accepting money for marijuana equipment, not marijuana itself, and therefore the Superior Court has no jurisdiction to prosecute.
Under Ballot Measure 2 language, the sale of marijuana accessories is legal. The definition includes “materials of any kind which are used, intended for use, or designed for…packaging, repacking, storing, vaporizing, or containing marijuana.”
Burns claimed he was only selling vacuum-sealed bags, which only happened to contain a legal gift of one ounce or less of marijuana, which he claims is allowable under Ballot Measure 2.
Even if illegal, Burns and Weltzin argue, the matter rests with the Marijuana Control Board, not the Department of Law. Burns claims the only concrete direction he received was a green light of sorts from Alaska Marijuana Control Board chairman Bruce Schulte, who stated during a Fairbanks meeting that Burns could continue operations, and that “nobody is kicking anybody’s doors down.”
The board’s word, Burns believes, is the only relevant one. Ballot Initiative 2 put the governance of marijuana business under the authority of the Marijuana Control Board.
A grand jury formally indicted Burns on Oct. 8, but information was filed Sept. 18. Because Burns filed his motion to dismiss charges Oct. 5, Kelley called the motion to dismiss “moot.”
Kelley did, however, respond to several of Burns’ arguments in her rejection of the motion to dismiss, calling them “inventive interpretations of law and assertions that, at best, can be considered potential defenses” that are not themselves satisfactory to dismiss charges.
Kelley argues the Anchorage Superior Court has “original jurisdiction in all civil and criminal matters.”
Further, Kelley argues Burns was clearly selling marijuana, not marijuana accessories as he claims. Customers made online orders specifying particular marijuana strains, and the amount charged is greater by far than the cost of the $1.50 bag.
“The argument that he was selling ‘mechanically sealed metal bags’ is undercut by the amount of money involved in the transactions,” Kelley wrote. “On Jan. 28, 2015, the officer paid $370, plus a $15 delivery fee, for one ounce of marijuana.”
Weltzin filed a reply to Kelley and argued Burns’ main points filed in his motion to dismiss: that he was in compliance with existing marijuana laws and therefore the Marijuana Control Board’s authority. She reinforces Burns’ original argument that he was not selling marijuana but transporting marijuana accessories, as well as marijuana itself in compliance with weight restrictions under one ounce.
Payment, Weltzin argues, was to recoup the expenses of delivery service, not in exchange for marijuana itself. She details the costs of Discreet Deliveries operations, and concludes the business was, in fact, operating at a loss.
“The costs and expenses of facilitating the transportation of an ounce of marijuana breaks down to approximately $408 per ounce,” Weltzin wrote. “Not only was the real and actual cost of transporting the marijuana and marijuana accessory credible, it was actually delivered at a loss to the company.”
In light of this, Weltzin argues, Burns should not be “targeted as a guinea pig for trial and error” by the state as a result of jurisdictional confusion.
Undercover officers were charged similar prices for similar quantities of marijuana when they purchased one ounce of marijuana from Absolutely Chronic Delivery Co. for $360 plus a $10 delivery fee. In August, another purchased an ounce for $410. An undercover officer purchased one-eighth an ounce of marijuana from Alaska Cannabis Club for $50, and another purchased an ounce for $450.
Weltzin said it is only coincidence that Burns charged an amount similar to the apparent market price of one ounce of marijuana.
Weltzin did not comment on Burns’ other motions. Burn’s change of venue motion alleges he would not receive a fair trial in Anchorage, and requests to hold the jury trial in Palmer.
“The tainted jury pool created in the Anchorage are through local media, quoting local heroes that are stipulating the current law, create a prejudice against the defendant,” the motion reads.
Burns cites, as proof of an Anchorage vendetta against him, the fact his Fairbanks operation was raided by Anchorage Police Department. Burns also claims to have been a “victim of threats from a House of Representatives member, stating that he is a target. That Representative is in the Anchorage Borough Area.”
Burns was referring to Rep. Cathy Tilton, R-Wasilla, with whom Burns had an email exchange in September during which Tilton wrote, “Your flippant arrogance has made you a target.”
Kelley wrote a brief recommending the denial of Burns’ change of location request.
“The majority of charges relate to conduct that took place in Anchorage,” Kelley wrote. “The defendant himself admits to conducting business all over the state. Further, the impartiality of an Anchorage jury has not yet been determined – such a determination can only come after a thorough questioning of potential jurors.”