OG Article: here.
View our Fair Use Policy: here.
Green Peak Industries, one of Michigan's largest marijuana businesses that sells its cannabis under the Skymint brand, has turned over thousands of documents to federal prosecutors in a wide-ranging corruption probe after two lobbyists it worked with conspired to bribe the state's top regulator.
Two lobbyists charged in the bribery conspiracy involving Rick Johnson, the former chairman of Michigan's marijuana licensing board, worked with Green Peak, a Lansing-area cannabis cultivator and retailer, two sources told The Detroit News.
Officials with Green Peak Innovations are cooperating with an FBI investigation and have provided "thousands of records at the government's request," the firm's criminal defense lawyer, Matthew Borgula, told The Detroit News.
"GPI made no payments to Rick Johnson and was unaware of any illegal payments made to Rick Johnson by those individuals who have now been charged and convicted," Borgula wrote in an email to The News. "GPI has never had a contractual relationship with Rick Johnson."
Green Peak is not identified by name in federal court filings that chronicle the largest public corruption scandal in the state capital in 30 years. Instead, prosecutors refer to "Company C," which sources say is Green Peak. The sources requested anonymity because they were not authorized to speak publicly about the ongoing FBI investigation.
The lobbyists, Vincent Brown and Brian Pierce, gave at least $42,000 in cash and other benefits to Johnson to help "Company C" and other clients obtain medical marijuana licenses. The money was paid while Johnson served as chairman of the Medical Marihuana Licensing Board from May 2017 through April 2019 and Green Peak was seeking licenses to grow, process and sell legalized marijuana.
Green Peak's entanglement in an ongoing federal investigation into the launch of the marijuana industry in Michigan shines new light on the probe, extending it to one of the biggest current players in the market and revealing how the alleged misdeeds could have benefited those involved.
The company has more than 20 Skymint stores across the state and obtained 12 licenses to grow marijuana from Johnson's board in 2018. Three years later, the company produced $63 million in revenue in 2021, according to court documents disclosed in the former CEO's divorce case. On April 6, the FBI and the U.S. Attorney's Office announced charges against four individuals, including Johnson, a former Michigan House speaker, for their roles in the corruption scheme. Three of the four — Johnson, Oakland County businessman John Dawood Dalaly and Brown, the 32-year-old lobbyist from Royal Oak — have already pleaded guilty. Pierce, 45, of Midland, is scheduled to plead guilty Friday.
Brown and Pierce provided $42,000 in payments and other benefits to Johnson to sway his decisions and "help" their clients, including one described in court filings as "Company C," an alias designed to shield the firm from scrutiny because it has not been accused of wrongdoing. Former House Speaker Rick Johnson, R-LeRoy, has pled guilty to accepting more than $100,000 in bribes as chairman of Michigan's now-defunct licensing board for marijuana businesses. Katy Batdorff, Special To The Detroit News
It was unclear on Monday whether Green Peak's former CEO and co-founder, Jeff Radway, was cooperating with investigators. The marijuana company also uses the name Green Peak Innovations.
Federal prosecutors have alleged "Company C" received "valuable nonpublic information" and assistance with applications from Johnson. State law barred members of the licensing board from having outside communications with applicants. "Company C" also falsely stated on applications for licensing that it had no "financial relationship" with any board member, according to documents filed by prosecutors in federal court. Few other details about "Company C's" role in the scheme are listed in court records. Johnson and other board members voted to "pre-qualify" Green Peak Industries for medical marijuana licensing in July 2018 and then repeatedly voted in favor of the company's applications during meetings in October and December 2018 and February and April 2019. Johnson pleaded guilty to accepting bribes on April 25. He faces up to 10 years in federal prison and a fine of up to $250,000.
Rocky path for Green Peak
Johnson, a Republican and former lobbyist, led the Medical Marihuana Licensing Board from May 2017 to April 2019. Former Gov. Rick Snyder, a Republican, appointed him to the position, but Gov. Gretchen Whitmer, a Democrat, disbanded the board early in her first term.
The panel was key in deciding which businesses got into the burgeoning industry first. Michigan voters approved a ballot proposal to allow recreational marijuana in 2018, and those with medical marijuana licenses were positioned for success in the expanding market. Green Peak thrived in its early years. A 2021 press release from the company said it had a workforce of 730 employees, a combined consumer base of 670,000 and 27 retail locations totaling 101,000 square feet. The company produced 80,000 pounds of cannabis annually and generated $50 million in revenue in 2020 and $63 million in 2021, according to court filings from Radway's ongoing divorce case.
But recently, an abundance of product has driven down marijuana prices in Michigan, causing financial pain for cannabis businesses, including Green Peak. In March, Tropics LP, a Canadian firm, sued Green Peak in Ingham County Circuit Court and successfully sought a receiver to be appointed. Green Peak owed Tropics more than $127 million and was "chronically in default," according to the lawsuit.
That litigation is one of many legal battles that have unfolded recently involving Radway, who previously helped lead an apparel company called J. America.
In March, a group of cannabis businesses, listed as the "3Fifteen Parties," sued Green Peak in Oakland County Circuit Court, saying they agreed to sell their assets to the company but had been given misleading and inaccurate financial information.
Those cannabis businesses contend Radway operated Green Peak "as his personal piggybank," "made unilateral decisions on behalf of the company" and had "extramarital affairs" with employees, according to the suit.
Radway sued Joe Neller, his nephew and a co-founder of Green Peak, in February, according to court records.
In that suit, Radway said he loaned Neller $2.3 million so he could purchase an equity share in Green Peak. Neller owed him $1.2 million, according to the suit. Neller countered in a court filing that he owed Radway nothing and argued that Radway had "engaged in fraud" and had him "sign various agreements that were prepared and forced upon" him "without the benefit of counsel."
An Ingham County judge dismissed that battle between Radway and Neller in April. It's unclear why.
“I can’t get into that at all," Neller's attorney, Charles Cuzydlo, said Monday when asked about the case. Attempts to reach Radway for comment on Monday were unsuccessful.
Green Peak had a long relationship Brown, the lobbyist who pleaded guilty on Friday to conspiracy to commit bribery.
Neller, who's been listed as Green Peak's chief government affairs officer, was seated next to Brown at a Michigan House committee hearing in April 2019. Neller appeared there to testify in favor of a bill to crack down on unlicensed marijuana retailers.
At the meeting, Neller described Green Peak as Michigan's "largest active medical marijuana license holder."
Brown's lobbying firm, Artemis Consulting, has listed Green Peak as one of its five clients since launching in December 2018. Brown and Pierce were jointly involved in two marijuana-focused lobbying businesses: Philip Alan Brown Consulting and Michigan Growers Consultants. The firms disclosed only two clients, the nonprofits Michigan Responsibility Council and Sunrise Health Freedom Foundation.
But, according to federal prosecutors, Brown and Pierce used their lobbying firms and another entity to provide $42,000 in payments and other benefits to Johnson to influence his decisions and to try to win more clients for themselves.
As he left the federal courthouse in Grand Rapids on Friday, Brown's lawyer, Mark Kriger, declined to talk about "Company C."
"I don't talk about cases in the press," Kriger said. "I don't think it's appropriate."