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Search warrants detail undercover buys and seizure of cash and ATMs from cannabis-related shops

Law enforcement searched stores, banks and homes across nine counties in Southwest Virginia in September. Some of the search warrants are just now being unsealed.


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Recently unsealed search warrants executed at cannabis-related stores as part of a sweeping law enforcement operation across Southwest Virginia last fall detail weeks of undercover buys and catalog the seizure of ATMs, thousands of dollars in cash and containers of plant materials bearing labels like “Grease Monkey” and “Stomp Purple.”


A spokeswoman for the Virginia State Police, which helped coordinate the sweep, said there have been no charges or arrests in connection with the searches. The agency is “still working through the investigation” with the county commonwealth’s attorneys, Corinne Geller said Friday.


However, an investigator with the Scott County Sheriff’s Office said Friday that charges connected to the searches have recently been filed there. 


Law enforcement officials have been mum about the Sept. 28 searches that took place in nine counties, and nothing could be gleaned from court documents because they were sealed for 180 days. 


But those seals recently expired in some counties. Over the last week, circuit court officials in Lee, Scott and Pulaski counties released the unsealed documents to Cardinal News.  


Repeated attempts over three weeks to get copies of the warrants filed in Washington County were unsuccessful. A call to Commonwealth’s Attorney Josh Cumbow was not returned. 


Court officials in the counties of Montgomery, Roanoke, Tazewell and Wythe said the seals there had been extended or the documents would remain sealed until further notice, while a Smyth County court employee said no search warrants related to the searches were received.  


In September, the operation was described in a state police news release as an “extensive, ongoing criminal investigation into allegations of money laundering and illegal narcotic distribution network by retail establishments.” 


Two dozen search warrants were executed at stores, homes and financial institutions. In addition to local law enforcement agencies, the effort involved state police, the state attorney general’s office, the U.S. Postal Inspection Service, the federal Drug Enforcement Administration and county prosecutors. 


Over the last year, cannabis-related stores have opened in towns across Southwest Virginia and other parts of the state at a time when there is a lot of uncertainty over the state’s marijuana laws. 


Virginia allows adults 21 and older to possess small amounts of marijuana for personal use and permits home growing of up to four plants per household. 


But with no legal retail market outside of the medical industry, some shops began “gifting” marijuana to customers who buy other products like stickers and T-shirts. State Attorney General Jason Miyares issued an opinion last year stating that such gifting is illegal. 

Questions to the attorney general’s office about the investigation were referred to county commonwealth’s attorneys.


There was some hope for legalizing a retail market during the recent General Assembly session. But an effort to create a legal adult-use cannabis market by next year ended with a swift veto in late March by Gov. Glenn Youngkin.  


In Scott County, the unsealed search warrants and affidavits revealed that four stores — the Green Seed in Duffield, GCVA Indoor Grow Supply in Gate City, and the Smoky Grass Station and Zarati Shop, both in Weber City — were searched. There were also search warrants for three financial institutions — Eastman Credit Union in Gate City, First Community Bank in Gate City and Wells Fargo in Norton — where police said they were looking for information about accounts held by owners of the stores.  


In the months leading up to the searches, authorities said they conducted undercover operations at the stores and made controlled purchases of suspected marijuana and other products at the stores that were sent to Roanoke for testing. Much of the material tested above the 0.3% THC content threshold and was identified as marijuana, according to the court documents. 


Dominic Nickels, an investigator with the Scott County Sheriff’s Office who said he’s a member of a drug task force, said Friday that several charges were recently filed in connection to the searches, including misdemeanor and felony charges of distribution, possession with intent to distribute and conspiracy. He would not provide the names of those charged, saying it is an ongoing investigation.  


Calls to Scott County Sheriff Jeff Edds and Commonwealth’s Attorney Kyle Kilgore seeking more information were not returned. 


In Pulaski County, there was one search warrant for the Zarati Shop in Pulaski, where two undercover purchases of marijuana were made in August and September 2023.  


Commonwealth’s Attorney Justin Griffith said Friday that the store has remained closed since the search, and no charges have been filed. If charges were filed, it would not be against the two young store clerks, but against the owner, he added. 


“If and when we ever decide to prosecute the owner of the store, we will coordinate with other jurisdictions in the commonwealth to determine who has the best evidence for the prosecution and what jurisdiction would be able to bring the most justice. We are thankful that the store ceased operations and has not attempted to reopen at that location,” Griffith said. 


Other cannabis-related shops also closed following the searches, including the Good Vibes Shop in Abingdon and the Zarati Shop in Roanoke County, while others remain open. 


Over the period of a year, Zarati shops in jurisdictions across the state have been part of an ongoing investigation, and the operations at the stores were conducted in the same manner, with the purchase of a sticker or CBD so the marijuana could be “adult shared,” several warrants state. 


The amount that was shared or gifted was directly related to the amount paid for the item, according to several of the warrants. 


Several also note that during some undercover purchases, those involved bought an ounce of marijuana and were told if they took it out to their car they could buy another ounce. 


One warrant says that multiple packages that had been shipped to Zarati locations from California and Oregon were seized; they were later found to contain marijuana. One outgoing package that was seized contained $15,000 in cash, it states.


A search warrant was executed at the Zarati Shop in the Lee County town of Pennington Gap, where undercover purchases had been made. On Oct. 17, a search warrant was filed to search the same store for an ATM, which was seized along with $6,160, the warrant states. 


Other items seized from shops in the three counties included computers, tablets, SD cards, vaping materials, gummies, cellphones, DVRs, electronic scales, seeds, receipts and other records.

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