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Zoned Properties, Inc. & Duke Rodriguez Lawsuits

Holistic Patient Wellness Group, LLC, East Valley Patient Wellness Group, LLC, and Natural Remedy Patient Center, LLC (all clients of mine) hold Dispensary Registration Certificates issued by the Arizona Department of Health Services.  These companies are involved in lawsuits with Duke Rodriguez, Zoned Properties, Inc. (aka ZDPYD), Ultra Health, LLC, and Cumbre Investment, LLC. ZDPYD focuses “on properties in the medical marijuana industry.” See page 8 of ZPI’s April 15, 2014, Company Information & Disclosure Statement.  To learn more about Zoned Properties, Inc., read “Zoned Properties, Inc. Public Disclosures.”

According to page 16 of Zoned Properties, Inc.’s April 15, 2014, Disclosure Statement its major stockholders as of that date were Duke Rodriguez (2,200,000 shares – 9.29%), Marc Brannigan (1,500,000 shares – 6.34%), Alan Abrams (3,200,000 shares – 13.51%), Christopher Carra (2,200,000 shares – 9.29%), Greg Johnson (1,500,000 shares – 6.34%), MJ Trust (1,200,000 shares – 5.07%) and MAC CAM, LLC (700,000 preferred shares).  MAC CAM, LLC is owned by Marc Brannigan, Alan Abrams and Christopher Carra.  On May 13, 2014, ZDPYD did a 1:120 reverse stock split.  Duke Rodriguez is the member and manager of Ultra Health, LLC, and Cumbre Investment, LLC.  Zoned Properties, Inc., Cumbre Investment, LLC, and Ultra Health, LLC, have domestic addresses at 16624 N. 90th Street, Scottsdale, Arizona.

Zoned Properties, Inc., is now a party to three lawsuits involving the eviction (see lawsuit #5 below about the Clifton, Arizona premises) and attempted eviction (see lawsuits #2 and #3 below about the 410 S. Madison, Tempe, Arizona premises) of a medical marijuana dispensary tenant, Holistic Patient Wellness Group, LLC.

Check back from time to time because we will be adding pleadings as these cases progress.

Summary of Lawsuits

1. Ultra Health, LLC vs. Healing Healthcare 3, Inc., Scan4Health, LLC. and Holistic Patient Wellness Group, LLC

This lawsuit is Maricopa County Superior Court case number CV2014-005642.  On March 5, 2014, Ultra Health, LLC, filed a lawsuit against Healing Healthcare 3, Inc. and Scan4Health, LLC. Ultra Health, LLC’s Complaint contains the following statements:

“On September 15, 2013, Ultra Health and Healing Healthcare 3 entered into a Joint Venture Agreement for purposes of operating a marijuana cultivation facility with its principal place of business at the Tempe Lease facility. 

[The JV Agreement attached as Exhibit 3 to the Complaint ends abruptly at page 5 and does not have a signature page.]

The Tempe Joint Venture Agreement provided that legal title to the Joint Venture property and all assets, including the Joint Venture itself, shall remain in the name of Ultra Health.

Brannigan at Ultra Health threatening Duke Rodriguez [This incomplete sentence apparently refers to Marc Brannigan, the then CEO of Zoned Properties, Inc.]

Healing Healthcare has converted the marijuana product owned by Ultra Health [emphasis added]

Pleadings & Documents

  • Amended Complaint.  Ultra Health, LLC, added Holistic Patient Wellness Group, LLC, as a defendant.

“AZDHS can confirm that it does not recognize Ultra Health, LLC as a holder of this or any other dispensary registration certificate.”

2.  Holistic Patient Wellness Group, LLC vs. Zoned Properties, Inc., Duke Rodriguez, Marc Brannigan & Tempe Industrial Properties, LLC

On March 14, 2014, the plaintiff sued the defendants in Maricopa County Superior Court case number CV2014-003047.

Pleadings

3.  Tempe Industrial Properties, LLC, vs. Holistic Patient Wellness Group, LLC, & Healing Healthcare 3, Inc.

On March 19, 2014, twelve days after ZDPYD purchased the real property located at 410 S. Madison, Tempe, Arizona, ZDPY’s wholly owned subsidiary Tempe Industrial Property, LLC, filed a lawsuit to evict its first and only medical marijuana dispensary tenant.  This is Maricopa County Superior Court case number CV2014-005961.  ZDPYD focuses “on properties in the medical marijuana industry.”  On April 24, 2014, Tempe Industrial Properties, LLC, conveyed the real property back to Zoned Properties, Inc.

Pleadings

4. Holistic Patient Wellness Group, LLC, East Valley Patient Wellness Group, LLC, and Natural Remedy Patient Center, LLC vs. State of Arizona, Janice Brewer, Arizona Department of Health Services, Will Humble, Christopher Miller, Meagan Miller and Alexander De Soler.

On April 22, 2014, Plaintiffs sued Christopher Miller, Meagan Miller and Alexander De Soler to get a court order that they are not members, officers, board members or affiliated with Plaintiffs.  This is Maricopa County Superior Court case number CV2014-007233.

Pleadings

5.  Holistic Patient Wellness Group, LLC, East Valley Patient Wellness Group, LLC, and Natural Remedy Patient Center, LLC vs. Duke Rodriguez, Zoned Properties, Inc., Cumbre Investment, LLC, and Ultra Health, LLC.

This lawsuit was filed on April 25, 2014.  It is Maricopa County Superior Court case number CV2014-007302.  The lawsuit involves real property in Clifton, Arizona, in which Holistic Patient Wellness Group, LLC,, operated a medical marijuana dispensary until the dispensary was locked out of the premises by Duke Rodriguez’ company called Cumbre Investments, LLC.  Attorney Jeffrey Kaufman appeared at a hearing before Maricopa County Superior Court Judge Brain and told to the court that he represents Zoned Properties, Inc., and that Cumbre Investment, LLC, assigned the Clifton lease to Zoned Properties.  Zoned Properties, Inc., which focuses “on properties in the medical marijuana industry” now owns two parcels of Arizona real estate, is a tenant on a third parcel and is involved in three eviction lawsuits with a licensed medical marijuana dispensary.

Update:  Plaintiffs voluntarily dismissed this lawsuit on May 20, 2014, because in an April hearing in Maricopa County Superior Court Judge Brain stated he believed contracts involving Arizona medical marijuana dispensaries are not enforceable because they violate public policy.

Pleadings

6.  Ultra Health, LLC, vs. Healing Healthcare 3 Inc , Rakesh Pahwa, Geeta Pahwa, Scott Armstrong, David Sanchez & Kathy Sanchez

The complaint in this lawsuit was filed on April 29, 2014.  It is Maricopa County Superior Court case number CV2014-053115.

Pleadings

7.  JDT Construction, LLC., vs. Ultra Health, LLC

The complaint in this lawsuit was filed on May 19, 2014, in Yavapai County.  JDT Construction claims Ultra Health, LLC, owes JDT $826,493 .68 under a contract for construction at 2144 North Road l East, Chino Valley, Arizona.  It is Yavapai Superior Court case number P-1300-CV-201400555.

Pleadings

8.  Scott Armstrong vs. Duke Rodriguez & Sold By Group, LLC

The lawsuit was filed on December 13, 2013.  It is Maricopa County Superior Court case number CV2013-055265.  Sold By Group, LLC, is owned and managed by Duke Rodriguez.

Pleadings

9.  Sweetwater Ranch Association vs. Duke Rodriguez

The lawsuit was filed on May 20, 2011.  It is Maricopa County Superior Court case number CV2011-095146.

10.  Cavalry Spv I L L C  vs. Duke Rodriguez

The lawsuit was filed on October 25, 2002.  It is Maricopa County Superior Court case number TJ2002-004927.

11.  Bank of America vs. Duke Rodriguez

The lawsuit was filed on October 26, 2000.  It is Maricopa County Superior Court case number CV2000-019427.

By |2019-06-14T08:28:25-07:00May 15th, 2014|AZ Marijuana Law Lawsuits, Stories & Articles, Zoned Properties & Duke Rodriguez|Comments Off on Zoned Properties, Inc. & Duke Rodriguez Lawsuits
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Zoned Properties, Inc. Public Disclosures

Zoned Properties, Inc., is a publicly traded corporation (symbol ZDPYD) that claims to “focus on properties in the medical marijuana industry.” See page 8 of ZPI’s April 15, 2014, Company Information & Disclosure Statement.  ZDPYD stock price per share in the last six months went from $.0754 on November 8, 2013, to a high of $21.98 on March 5, 2014, and down to $.68 on May 12, 2014.  On May 13, 2014, ZDPYD did a 1:120 reverse stock split.

The purpose of this article is to help people in the Arizona medical marijuana industry learn about Zoned Properties, Inc., a company that purchased its first of two Arizona real estate properties on January 20, 2014, and is now involved in three lawsuits in Arizona Superior Court with three medical marijuana dispensary clients of mine: Holistic Patient Wellness Group, LLC, East Valley Patient Wellness Group, LLC, and Natural Remedy Patient Center, LLC. To learn more about the Zoned Properties, Inc., lawsuits read “Zoned Properties, Inc. & Duke Rodriguez Lawsuits.”

The text inside quotes below was taken from ZDPYD’s public disclosures and press releases.  Text inside brackets

[ ] and outside of quotation marks was written by the author of this article.

1.  November 8, 2013, Company Information & Disclosure Statement

  • “The Company is a strategic real estate investment firm whose primary focus is acquiring commercial properties that face unique zoning challenges in the medical marijuana industry. The Company acquires commercial properties zoned within a variety of usage types such as industrial, agricultural, as well as mixed use. . . . The Company also manages a portfolio of properties that it owns and leases. The Company provides oversight on each and every property it manages”  Page 3.  [Emphasis added.  ZDPYD’s total assets as of 12/31/13 was $11,965. Page F-3 of the December 31, 2013, Financial Statement.]
  • “In September of 2013, Marc Brannigan, an individual resident of the State of Arizona, acquired 15,000,000 shares of common stock of the Company, representing approximately 91.54% of the issued and outstanding voting power of the Company.”  Page 4.
  • “On September 16, 2013, the Board of Directors of the Company appointed Marc Brannigan as President and Chief Executive Officer of the Company and Chairman of Board of Directors (sole director).”  Page 5.
  • “The Company also manages a portfolio of properties that it owns and leases.”  Page 6.
  • “The company’s initial holdings and acquisition targets are in the state of Arizona.”  Page 7.
  • “Additionally, the company has acquired a note for a medical marijuana dispensary located in Safford, Arizona. ZPI will soon foreclose on the building and own the property outright.”  Page 8.  [See the March 12, 2014, Press Release.]
  • “Once a property is acquired and re-zoned for a medical marijuana cultivation or dispensary location, ZPI can charge in some cases three to five times more than market value for rent”  Page 8.
  • “The Company currently has 5 full time employees.”  Page 9.
  • “We are a leader in our industry.”  Page 10.  [Emphasis added.  See the December 31, 2013, Financial Statement, which says ZDPYD’s only assets as of 12/31/13 was $11,965 cash & cash equivalent and it had no income in 2012 and 2013.]
  • “The Company devotes substantially all of its efforts to establishing a new business, and there has been no significant revenue therefrom since incorporation [2003].”  Page 10.  Emphasis added.
  • “Item X: The nature and extent of the issuer’s facilities.”  [This is question on Page 10, but ZDPYD did not answer it.]
  • “President, Chief Executive Officer and Director” is Marc Brannigan, owner of 15,000,000 shares of Common Stock.  Page 11.
  • “Conviction in a criminal proceeding or named as a defendant in a criminal proceeding: None”  Page 11.
  • “the Company borrowed funds to cover its daily operation, including but not limited to, consulting and advising fees, accounting fees, legal fees, compliance fees and others, from MAC CAM LLC, a related party owned by the Company’s President. As of September 30, 2013, the balance of notes payable to MAC CAM LLC was $25,000, which was evidenced by a convertible promissory note, dated on September 30, 2013, bearing interest at an interest rate of 8% per annum and due on demand (the “Note”). The holder of the Note has an option to convert all or any portion of the accrued interest and unpaid principal balance of the Note into the common stock of the Company or his successors, at a price of $0.05 per share.”  Page 11.
  • “Provide a list of the name, address and shareholdings of all persons beneficially owning more than five percent (5%) of any class of the issuer’s equity securities.  As of November 5, 2013: . . . Marc Brannigan . . . 15,000,000 Common Shares 91.54%.”  Page 12.
  • “The Company also manages a portfolio of properties that it owns and leases.”  Page 13.  [See the December 31, 2013, Financial Statement, which says ZDPYD’s only assets as of 12/31/13 was $11,965 cash & cash equivalent and it had no income in 2012 and 2013.]
  • “The Company devotes substantially all of its efforts to establishing a new business, and there has been no significant revenue therefrom since incorporation [in 2003].”  Page 13.  Emphasis added.
  • “There can be no assurance that revenues will be sufficient to cover future operating costs, and it may be necessary to continuously raise additional capital to sustain operations.”  Page 13.
  • “Material Contracts:  None.”  Page 15.

2.  December 31, 2013, Financial Statement

  • Total assets = $11,965 cash & cash equivalents. page F-3.  Emphasis added.
  • Revenue years 2012 + 2013 = $0.  page F-4.  Emphasis added.
  • Expenses 2013 = $336,547 & 2012 = $248,432. page F-4.  Emphasis added.

3.  February 5, 2014, Press Release

  • “Zoned Properties[SM], Inc. closes on site for 8th largest medical marijuana dispensary in the state of Arizona.” [Emphasis added.  As of May 4, 2014, no dispensary has ever operated on the Gilbert property.]
  • “ZDPY . . . announces that it has closed on all of the real estate associated with the approved site for a medical marijuana dispensary located in Gilbert, Arizona for $1.115 million.”  [“the Company acquired the land located in Gilbert, Arizona, for a total payment of $300,000.  April 15, 2014, Company Information & Disclosure Statement, Page 6.]
  • “Zoned Properties[SM], Inc. is in advanced discussions with the dispensary license holder who intends to occupy the facility”

4.  February 19, 2014, Press Release

  • “Zoned Properties, Inc. . . . has entered into a definitive agreement and opened escrow on a multi-tenant industrial complex in Tempe, Arizona.”
  • “The facility has several tenants including a state licensed Arizona medical marijuana cultivator.”

5.  March 7, 2014 Deed from Maryland, LLC, to Zoned Properties, Inc.

  • Special Warranty Deed
  • This is the first property acquired by ZDPYD that has a tenant (Holistic Patient Wellness Group, LLC, a client of my law firm) that is a licensed Arizona medical marijuana dispensary.  A co-tenant on the lease is Healing Healthcare 3, Inc.  The property is located at 410 S. Madison, Tempe, Arizona (the “Madison Property”).

6.  March 12, 2014, Press Release

  • “Monetizing Note for $210,500 Books First Profit of 2014”
  • “Zoned Properties, Inc. . . . announced that it has monetized the note on the Safford, Arizona dispensary location.”

7.  March 17, 2014, Deed from Zoned Properties, Inc., to Tempe Industrial Properties, LLC

  • Special Warranty Deed
  • ZDPYD transferred title of the Madison Property to its wholly owned subsidiary.

8.  March 17, 2014, Deed from Zoned Properties, Inc., to Gilbert Property Management, LLC

  • Special Warranty Deed
  • ZDPYD transferred title of the Gilbert real property to its wholly owned subsidiary.

9.  March 19, 2014, Tempe Industrial Properties, Inc. sues to Evict Holistic Patient Wellness Group, LLC, & Healing Healthcare 3, Inc.

  • The new landlord, a subsidiary of ZDPYD, which claims to “focus on properties in the medical marijuana industry.” started an eviction proceeding to evict its first and only medical marijuana dispensary tenant 12 days after ZDPY purchased the Madison Property.

10.  March 31, 2014 Press Release

  • ZDPYD “announced that after careful consideration, the board has recommended that Marc Brannigan should step down as acting CEO and board member of the company. As such, effective immediately, Marc Brannigan has resigned as the company’s CEO.”

11.  April 11, 2014, Arizona Corporation Commission Authorizes ZDPYD to Do Business in Arizona

12.  April 15, 2014, Press Release

  • ZDPYD ” is pleased to announce that Irvin Rosenfeld has joined their board of directors.”

13.  April 15, 2014, Company Information & Disclosure Statement

  • “The Company manages a portfolio of properties that it owns and leases and provides direct development on each and every property it acquires.”  Page 5.
  • On January 24, 2014, Zoned Properties, Inc., issued 100,000 shares to Cumbre Investment, LLC.  Page 6.
  • “During the first quarter of 2014, the Company issued 5,857,000 shares of restricted common stock at a price of $1.00 per share to approximately 28 accredited investors pursuant to a private placement, exempt from registration pursuant to Rule 506(c) under the Securities Act of 1933, as amended. The total proceeds the Company received from this private placement were approximately $5,857,000.”  Page 7.
  • “The Company manages a portfolio of properties that it owns and leases and provides direct development on each and every property it acquires. This can include complete architectural design and subsequent build-outs, general support, landscaping, general up-keep, and state of the art security systems.”  Page 8.
  • “Arizona offers opportunities in addition to acquiring . . . water rights and assured water supply credits (“Water”). Water is a strong focus of ZPI.”  Page 10.
  • “The Company devotes substantially all of its efforts to establishing a new business, and there has been no significant revenue therefrom since incorporation [in 2003]”  Page 10.  Emphasis added.
  • “Zoned Properties is the sole member of two established Limited Liabilities Companies: Tempe Industrial Properties LLC, which is the owner of one real estate asset managed by the Company, and Gilbert Property Management LLC, which has no operating activities as of the date of this Report.”  Page 11.  Emphasis added.
  • “The Company currently has 3 full-time employees.”  Page 12.
  • “We are a leader in our industry.”  Page 12.  Emphasis added.
  • “Item X: The nature and extent of the issuer’s facilities.”  [This is question on Page 13, but ZDPY did not answer it.]
  • “President, Treasurer and Secretary . . . Bryan McLaren . . . Number and class of issuer’s securities beneficially owned: Bryan McLaren 700,000 shares of Common Stock.”  Page 13.
  • “Former President, Chief Executive Officer, Secretary and Director* . . .  Marc Brannigan . . . Number and class of issuer’s securities beneficially owned: 1,500,000 shares of Common Stock.  * Mr. Brannigan resigned from all his positions and directorship of the Company on March 31, 2014.
  • “The Company borrowed funds to cover its daily operations, including but not limited to, consulting and advisory fees, accounting fees, legal fees, compliance fees and others, from MAC CAM LLC, a related party partially owned by the Company’s President.”  Page 14.
  • “Provide a list of the name, address and shareholdings of all persons beneficially owning more than five percent (5%) of any class of the issuer’s equity securities as of April 15, 2014.”  [The shareholders listed are:  Duke Rodriguez (2,200,000 shares – 9.29%), Marc Brannigan (1,500,000 shares – 6.34%), Alan Abrams (3,200,000 shares – 13.51%), Christopher Carra (2,200,000 shares – 9.29%), Greg Johnson (1,500,000 shares – 6.34%), MJ Trust (1,200,000 shares – 5.07%).  MAC CAM, LLC is listed as owning 700,000 shares of preferred stock.]  Page 16.
  • “The Company manages a portfolio of properties that it owns and leases and provides direct development on each and every property it acquires.”  Page 17. [Emphasis added.  According to its Press Releases and documents recorded with the Maricopa County Recorder ZDPY owns two parcels of land in Maricopa County, Arizona: the Madison Property leased to Holistic Patient Wellness Group, LLC, and Healing Healthcare 3, Inc., and the Gilbert property.]
  • “There was no cash flow from investing activities during the years ended December 31, 2013 and 2012, respectively.”  Page 18.
  • “The Company devotes substantially all of its efforts to establishing a new business, and there has been no significant revenue therefrom since incorporation [in 2003]”  Page 18. Emphasis added.  [See the March 12, 2014, Press Release that states: “Monetizing Note for $210,500 Books First Profit of 2014”]
  • “We had operating expenses of $336,547 and $248,432 for the years ended December 31, 2013 and 2012, respectively.”  Page 18.
  • “Net loss for the year ended December 31, 2013 was $387,316, increased by $180,030 compared to net loss of $207,286 for the year ended December 31, 2012.”  Page 18.
  • “There was no cash flow from investing activities during the years ended December 31, 2013 and 2012, respectively.”  Page 18.  Emphasis added.
  • “We had cash of $11,965 on hand as of December 31, 2013. On the short-term basis, we will be required to raise a significant amount of additional funds over the next 12 months to sustain operations. On the long-term basis, we will potentially need to raise capital to grow and develop our business.”  Page 19.  Emphasis added.

14.  April 24, 2014, Deed from Tempe Industrial Properties, LLC, to Zoned Properties, LLC

  • Quit Claim Deed
  • The subsidiary conveyed the Madison Property back to ZDPYD after holding title for 36 days.

15.  April 25, 2014, Officer/Director Change Form Filed with the Arizona Corporation Commission

  • ZDPYD notifies the Arizona Corporation Commission that Irvin Rosenfeld and Bryan McLaren became members of its Board of Directors.

16.  April 28, 2014, Officer/Director Change Form Filed with the Arizona Corporation Commission

  • ZDPYD notifies the Arizona Corporation Commission that Irvin Rosenfeld and Bryan McLaren ceased to be members of its Board of Directors.

17.  May 1, 2014 Court Hearing in Holistic Patient Wellness Group, LLC, East Valley Patient Wellness Group, LLC, and Natural Remedy Patient Center, LLC vs. Duke Rodriguez, Zoned Properties, Inc., Cumbre Investment, LLC, and Ultra Health, LLC.

This lawsuit was filed on April 25, 2014.  It is Maricopa County Superior Court case number CV2014-007302.  The lawsuit involves real property in Clifton, Arizona, in which Holistic Patient Wellness Group, LLC,, operated a medical marijuana dispensary until the dispensary was locked out of the premises by Duke Rodriguez’ company called Cumbre Investments, LLC.  Attorney Jeffrey Kaufman appeared at a hearing before Maricopa County Superior Court Judge Brain and told to the court that he represents Zoned Properties, Inc., and that Cumbre Investment, LLC, assigned the Clifton lease to Zoned Properties.  Zoned Properties, Inc., which focuses “on properties in the medical marijuana industry” now owns two parcels of Arizona real estate, is a tenant on a third parcel and is involved in three eviction related lawsuits.

Pleadings

By |2019-06-14T08:29:24-07:00May 15th, 2014|Stories & Articles, Zoned Properties & Duke Rodriguez|Comments Off on Zoned Properties, Inc. Public Disclosures
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Mesa Nixes Zoning for Medical Marijuana Dispensary

arizona.newszap.com:  “A majority of the Mesa City Council voted to approve rezoning property to light industrial for a planned medical-marijuana dispensary at 6350 E. Main St., but legal property-owner protests in the area required at least a 6-1 vote, the council was told May 5.  The proposed business would have been in the Mesa Central CHAA – or Community Health Analysis Areas for Arizona’s medical marijuana program – with boundaries of Power Road, Country Club Drive, University Drive and Broadway Road, Gordon Sheffield, city of Mesa zoning/civil hearing administrator, told the planning board Feb. 18.  The city requires that medical-marijuana dispensaries be in industrial-zoned areas.  There is no industrial-zoned land in the CHAA,”

By |2017-02-12T07:40:47-07:00May 14th, 2014|Stories & Articles, Zoning|Comments Off on Mesa Nixes Zoning for Medical Marijuana Dispensary
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The Ongoing Saga of Medbox

Southern Investigative Reporting Foundation:  Roddy Boyd, the author of “Tinkerer, Lawyer, Hustler, Lies: One Man’s Path to a Dope Fortune” wrote an April 17, 2014, Medbox article for the Southern Investigative Reporting Foundation.  All Medbox shareholders and people involved with Arizona medical marijuana dispensaries that used Medbox’ services should read the article.  Here are some quotes from the article:

Rishi Patel is on a mission: He is taking a hard look at business opportunities in the wake of Arizona’s decision to permit the sale of medical marijuana in dispensaries across the state. . . .

Patel had come across an ad from Prescription Vending Machines, a company helping folks like him get into the medical marijuana business, and in short order he was in a running dialogue with the company’s founder, an agreeable and talkative fellow named Vincent Mehdizadeh. From there, it wasn’t long before Patel and a pair of friends had struck a plan to help Prescription Vending Machines land a dispensary permit in Arizona.

Just before he wrote a very large check—his father was staking him the capital—Patel did a background search on Mehdizadeh.

After getting the report, Patel was astonished to see a laundry list of crimes and lawsuits; one more serious than the other, all of which Mehdizadeh was at the center. . . .

[Mehdizadeh] tells Patel that there has been a mistake, and that something somewhere is terribly wrong since he hasn’t been repeatedly sued or arrested. . . .

To correct the record, Mehdizadeh e-mails Patel a scan of his driver’s license and another background report. 

Shortly after the call ended, Patel opened up the files. As promised, the documents belonged to Pegah Vincent Mehdizadeh, a man from California whose spotless criminal record was the polar opposite of Pejman Vincent Mehdizadeh. . . .

And then in July 2011 Patel got his dispensary and within minutes knew that everything was wrong. The furniture was used, the location wasn’t what they’d bargained for, and even the vaunted dispensary system they’d been promised didn’t do what was advertised.

The quotes above are a small part of a very lengthy and troubling story.

By |2017-02-12T07:40:47-07:00May 13th, 2014|Medbox, Stories & Articles|Comments Off on The Ongoing Saga of Medbox
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The Bud Light-ification of Bud

New York Times: “A joint might never be as easy to access as a can of beer or a cigarette. But thousands of people and millions of dollars are hard at work to make it as predictable and dependable as one. Call it the Bud Light-ification of bud.  There’s a pressing economic reason for the pot industry to get better if it is to survive, aside from its formidable legal challenges. The plant is relatively cheap and easy to grow, and not complicated to process either. Left to the whims of the open market — meaning ignoring taxes and regulations — the price of a joint could plummet to the price of a tea bag or a packet of sugar. So how will investors help the market mature while still making money?”

By |2017-02-04T07:39:00-07:00May 13th, 2014|Stories & Articles|Comments Off on The Bud Light-ification of Bud
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A Convicted Thief & a Chiropractor Claim Their Pot Company Isn’t a One-Hit Wonder

Phoenix New Times:  Medbox is a company that “features patented systems that dispense medication based on biometric identification . . . . [and] turn-key consulting services to the pharmaceutical industry”  Medbox (MDBX) is a publicly traded company whose stock value was $19.91 as of May 9, 2014, which gave it a market value of $587,857,682.  Medbox is a major player in the Arizona medial marijuana dispensary industry.

On May 8, 2014, the Phoenix New Times published a devastating story about Medbox written by investigative reporter Ray Stern.  Here are some interesting quotes from the story.

“Judging by its stock, this company truly is big time.  Its products and services, however, aren’t as impressive.  Medbox machines are by no means in widespread use in Arizona’s 80 medical-marijuana dispensaries.  One drawback of the devices, as the unit at BC Wellness Center demonstrates, is that customers can’t use them legally. . . .

We spent all this money for the machine, and the customer can’t use it. . . . But the machine isn’t crucial to the dispensary’s operation . . . . ‘We could do without it.’ . . .

It’s not a glowing review of the Medbox product from one of the two Arizona dispensaries in which New Times was able to verify the existence of working Medbox machines. . . .

Vincent Mehdizadeh — founder, inventor of the dispensing machine, senior strategist, and (until his recent resignation) chief operating officer — is a convicted felon. He pleaded guilty last year to stealing from immigrants by offering them bogus legal services, avoiding a prison sentence when he paid $450,000 in restitution to victims.  Medbox owns no factories, no buildings. It rents a West Hollywood office. Last year, it had revenues of $5.2 million but didn’t turn a profit. It ended the year with about $300,000 in the bank.  What Medbox does have, though, is impressive stock. . . .

The founder of Medbox generally goes by the name Vincent Mehdizadeh.  In U.S. Securities and Exchange Commission filings, however, he calls himself P. Vincent Mehdizadeh.  The P is for Pejman, listed as his true first name in a 2013 plea agreement with the Los Angeles County District Attorney’s Office — a deal that allowed him to escape serving four years in prison. A civil complaint filed in a California court by theft victim Abdul Ahmed states another a.k.a. for Mehdizadeh: Vince Zadeh. [See the Statement of Issues and Supporting Facts, Declaration of Abdul Ahmedts with Evidentiary Exhibits . . . Memorandum of Points of Authorities in Support of Prejudgement Attachment filed in this lawsuit.] . . .

Over recent months, Medbox has been the target of another writer, Roddy Boyd of the Southern Investigative Reporting Foundation, who wrote lengthy articles about it published on September 30, 2013, and on April 17 [See “What’s in a Name: The Ongoing Saga of Medbox“].  A week before Boyd’s most recent article appeared, Mehdizadeh resigned as director and COO of Medbox, saying in a news release he’d done so to make the company ‘less prone to attack.’  [Roddy Boyd is the author of another scathing story about Medbox and Mehdizadeh called “Tinkerer, Lawyer, Hustler, Lies: One Man’s Path to a Dope Fortune.”] . . .

The June 21, 2013, plea agreement and subsequent news releases by the California agencies involved in the case are available online and show that Mehdizadeh pleaded guilty to two counts of grand theft and admitted to a “special allegation of engaging in a pattern of related felony conduct involving takings in excess of $100,000.”  In addition to the hefty restitution order, he was sentenced to five years’ probation.

Read the article because it contains much more information about Medbox and its machines.

By |2017-02-12T07:40:01-07:00May 12th, 2014|Medbox, Stories & Articles|Comments Off on A Convicted Thief & a Chiropractor Claim Their Pot Company Isn’t a One-Hit Wonder
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Feds Seek Prison for Rural Washington Pot Growers

Yahoo News:  “The green-cross storefronts of medical marijuana dispensaries are common in much of Washington, and the state is plowing ahead with licensing people to grow and sell recreational pot to adults.  But a federal trial scheduled to begin in the coming weeks for five people in Spokane suggests not all is OK with weed in the state.  Larry Harvey, a 70-year-old medical marijuana patient with no criminal history, three of his relatives and a family friend each face mandatory minimum sentences of at least 10 years in prison after they were caught growing about 70 pot plants on their rural, mountainous property.”

By |2014-05-12T08:08:33-07:00May 12th, 2014|Federal Dispensary Attacks, Stories & Articles|Comments Off on Feds Seek Prison for Rural Washington Pot Growers
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Washington Dispensary Owner’s Lawsuit Claims Washington Cannot Tax Marijuana Sales

Bellingham Herald:  “A federal lawsuit is challenging Washington state’s authority to tax marijuana as long as marijuana remains illegal under federal law.  The case arises from the state’s attempt to collect sales taxes from a medical marijuana dispensary. But lawyer Douglas Hiatt, who filed it late Thursday, said it could throw a wrench in Washington’s plans for collecting taxes on recreational marijuana, too. . . . the dispensary’s operator, Martin Nickerson, who is simultaneously being prosecuted criminally for marijuana distribution and targeted by the state Department of Revenue for not collecting and remitting taxes on the pot he was allegedly distributing.”

By |2017-02-12T07:40:46-07:00May 10th, 2014|Stories & Articles|Comments Off on Washington Dispensary Owner’s Lawsuit Claims Washington Cannot Tax Marijuana Sales
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Oklahoma Initiative Would Make Pot a Legal, Exportable Cash Crop

US News & World Report:  “Marijuana reform advocates hope Oklahoma will live up to its nickname – the Sooner State – by becoming the first U.S. jurisdiction to both legalize cannabis for personal use and allow it to be exported as a cash crop.  In the best-case scenario for pro-pot campaigners, there will be two initiatives on the November ballot: One that would allow medical marijuana and another more far-reaching initiative that would comprehensively dismantle status quo pot policies.

By |2017-02-12T07:40:46-07:00May 9th, 2014|Stories & Articles|Comments Off on Oklahoma Initiative Would Make Pot a Legal, Exportable Cash Crop
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Colorado Lawmakers OK Special Bank for Marijuana Trade

Washington Post:  “the banking industry, which is federally regulated, is steering clear of anything to do with Colorado’s burgeoning marijuana industry. And that means the whole pot value chain – from grower to retailer to customer – is cash only.  In addition to making it harder for pot retailers to grow and manage a legitimate business, a cash-only enterprise is harder for the government to track for tax purposes and an easy target for criminals.  Wednesday, Colorado lawmakers . . . . approved a plan to setup a network of uninsured cooperatives that would offer basic banking services to pot businesses.

By |2014-05-08T18:44:57-07:00May 8th, 2014|Colorado News, Stories & Articles|Comments Off on Colorado Lawmakers OK Special Bank for Marijuana Trade
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Donation Dilemmas

Tucson Weekly:  “someone told these caregivers—and a lot of folks in the medical marijuana community along with them—that all you have to do is call it a donation, and you’re legal. I would venture an educated guess that more than half of the medical marijuana community thinks it’s legal for patients and caregivers to just go around trading donations for meds. But the Arizona Medical Marijuana Act forbids patients or caregivers from selling marijuana, period. There aren’t any qualifiers in the law, such as ‘You can sell it if you don’t say you’re selling it, if you just call it a donation’.”

By |2014-05-08T06:49:01-07:00May 8th, 2014|Stories & Articles|Comments Off on Donation Dilemmas
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World’s Largest Pot Farm

New York Post:  “Pot production is about to go industrial. Of course, you’ll have to head to Canada to take advantage of it.  CEN Biotech — a nutrition company best known for an amino acid supplement — is working on opening the “largest and most advanced” legal marijuana production facility in the world. The Ontario site will be able to grow 1.3 million pounds of pot from 50,000 plants — an operation that could produce $5 billion in sales per year when it starts producing in a few weeks after it passes government inspections.”

By |2014-05-08T06:37:14-07:00May 6th, 2014|Stories & Articles|Comments Off on World’s Largest Pot Farm
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Science Behind the Munchies

havasunews.com:  “The munchies. That is, the well-known side effect of marijuana smoking that makes some users ravenously hungry.  We’ve all heard the jokes. But what about the science?  That, it turns out, is also of renewed interest.”

By |2014-05-03T08:11:26-07:00May 3rd, 2014|Stories & Articles|Comments Off on Science Behind the Munchies
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Patients Exploit Arizona’s Medical Pot Law

Arizona Republic:  “He advertises himself as a medical-marijuana patient offering extra high-grade pot ‘with huge buds’ for a ‘reasonable donation.’  The seller’s Craigslist ad says those with medical-marijuana cards can purchase an ounce of high-quality pot — and get it delivered — for $250, about $150 less than what some medical marijuana dispensaries charge, he told The Arizona Republic.  . . . While Arizona’s medical-marijuana program is intended to be “purely medicinal,” some participants are exploiting the law by reselling marijuana they’ve legally purchased or grown, fueling the illegal drug market.

By |2014-05-03T08:06:43-07:00May 3rd, 2014|Stories & Articles|Comments Off on Patients Exploit Arizona’s Medical Pot Law
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Two Men Cease to be Directors of Zoned Properties, Inc.

On April 3, 2014, Irvin Rosenfeld and Bryan McLaren were elected to be Directors of Zoned Properties, Inc., a lessor of land, facilities and equipment to the medical marijuana industry.  On April 25, 2014, ZPI filed a Change of Officer/Director form with the Arizona Corporation Commission to add Irvin Rosenfeld and Bryan McLaren as directors.  On April 28, 2014, ZPI filed a Change of Officer/Director form that notified the ACC that Rosenfeld and McLaren ceased to be directors of the corporation.  The sole director listed on the ACC’s website as of April 28, 2014, was Leonard C. Salgado.  Rosenfeld and McLaren were directors for 25 days.

By |2019-06-14T08:27:55-07:00April 30th, 2014|Stories & Articles, Zoned Properties & Duke Rodriguez|Comments Off on Two Men Cease to be Directors of Zoned Properties, Inc.
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Colorado Symphony Links up With Pot Industry

ABC News:  “The Colorado Symphony Orchestra said Tuesday it will play a series of “cannabis-friendly” fundraising concerts sponsored by the state’s burgeoning pot industry.  The state’s only full-time professional orchestra hopes the unusual shows dubbed ‘Classically Cannabis: The High Note Series’ will boost its audience as it struggles with dwindling attendance and shrinking budgets.”

By |2019-06-14T08:28:24-07:00April 30th, 2014|Colorado News, Stories & Articles|Comments Off on Colorado Symphony Links up With Pot Industry
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Vets are Treating Dogs for Marijuana Highs

havasunews.com:  “With medical marijuana legal in Arizona, emergency rooms for pets are seeing more and more dogs that have eaten marijuana in brownies, cookies, oils and other forms.  “People come in and their dogs are lethargic, with their eyes rolling in the back of their heads, or they’re unconscious,” said Dr. Billy Griswold with Emergency Animal Clinic, which has five Valley locations.  Griswold said that over the past few years he has treated at least 24 dogs each month that have eaten marijuana.”

By |2014-04-28T20:31:15-07:00April 28th, 2014|Stories & Articles|1 Comment
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Marijuana Edibles: You May Not Be Getting What You Think

CBS Denver:  “The State of Colorado will start phasing in mandatory lab testing of marijuana edible products on May 1. Currently, marijuana product testing of any kind has been performed strictly on a voluntary basis.  As Colorado ramps up its lab testing, CBS4 requested permission to perform independent lab tests of edible products but was forbidden by the Marijuana Enforcement Division. . . . Steep Hill Halent Labs tested 13 marijuana edible products for potency. Lab director Joseph Evans said only three of the 13 products tested close to the potency promised on the packaging.”

By |2014-04-28T19:52:04-07:00April 28th, 2014|Stories & Articles|Comments Off on Marijuana Edibles: You May Not Be Getting What You Think
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Medical Marijuana Dispensary Dispute

Eastern Arizona Courier:  “Medical marijuana cardholders who stopped by the Holistic Wellness Center in Clifton to purchase an allotment of cannabis Thursday came across a padlocked door and a handwritten sign indicating the business was temporarily closed. The closure wasn’t due to state or federal law enforcement officials, however, but was instituted as a casualty of a battle for ownership and the right to operate the dispensary.  The fight concerns an ownership group involving David and Kathy Sanchez against their former partner, Duke Rodriguez, and his group, Ultra Health.”

Duke Rodriguez and Ultra Health were never partners with David and Kathy Sanchez or Holistic Patient Wellness Group, LLC, the sole holder of a license to operate a medical marijuana dispensary in CHAA 83, the CHAA in which Clifton, Arizona, is located.  KEYTLaw, LLC, and Richard Keyt represent Holistic Patient Wellness Group, LLC.

By |2014-05-03T09:02:17-07:00April 24th, 2014|Stories & Articles, Zoned Properties & Duke Rodriguez|Comments Off on Medical Marijuana Dispensary Dispute
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Arizona Supreme Court Rules Pot Metabolite doesn’t Prove DUI

Arizona Republic:  “Motorists who have used marijuana cannot be charged with driving under the influence on that basis alone, even if some traces of the drug are detected in their blood, the state’s top court ruled Tuesday.  Arizona Supreme Court justices disagreed with the Maricopa County Attorney Office, which argued before the court in November, that drivers whose blood tests reveal the presence of an inactive marijuana metabolite known as Carboxy-THC can be prosecuted for driving while impaired.”

Read the court’s opinion in the case of Arizona vs. Hrach Shilgevorkyan.

By |2017-02-04T07:39:00-07:00April 23rd, 2014|AZ Marijuana Law Lawsuits, Stories & Articles|Comments Off on Arizona Supreme Court Rules Pot Metabolite doesn’t Prove DUI
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Colorado Lawmakers Seek to Tighten Marijuana Rules after Two Deaths

Washington Times:  “The Mile High City was jammed with pot revelers Sunday for the annual 4/20 festival, but the mood was far from celebratory Monday as state legislators moved to tighten rules on marijuana products in the wake of two tragic deaths.  The Colorado House passed unanimously bills to set possession limits for concentrated forms of marijuana such as hash oil, and to make cookies, candy and other foods infused with pot more easily identifiable.”

By |2014-04-22T07:12:08-07:00April 22nd, 2014|Colorado News, Stories & Articles|Comments Off on Colorado Lawmakers Seek to Tighten Marijuana Rules after Two Deaths
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Maryland Decriminalizes Pot

Huff Post:  “Maryland Gov. Martin O’Malley (D) has signed a bill decriminalizing marijuana possession in the state, following the passage of the measure in Maryland’s General Assembly.  Senate Bill 364 reduces the penalty for possessing less than 10 grams of marijuana from a criminal to a civil offense. First-time offenders will face fines up to $100, while a second offense will be punishable with a fine up to $250 and subsequent offenses up to $500. Additionally, the bill requires third-time offenders or offenders under the age of 21 to be evaluated for substance abuse problems, and to attend drug education classes.

By |2014-04-14T20:07:03-07:00April 14th, 2014|Stories & Articles|Comments Off on Maryland Decriminalizes Pot
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Pot Vending Machine to Debut

UPI:  “A Colorado company has introduced the first-ever marijuana vending machine, which will soon be put to use at a dispensary in Eagle-Vail, Colo.  The so-called Zazz machine was produced by Stephen Shearin’s company, American Green, and was delivered to the Herbal Elements dispensary Friday.”

By |2014-04-14T06:41:30-07:00April 14th, 2014|Stories & Articles|Comments Off on Pot Vending Machine to Debut
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Eric Holder in the Hot Seat on Pot, Fired Up to Defend DOJ Enforcement

Roll Call:  “As states and cities move to liberalize marijuana laws, the administration looks at changes to federal policy and the No. 2 House Democrat reverses course on decriminalization, Attorney General Eric H. Holder Jr. found himself in a charged congressional hearing on Tuesday.  Pressed by members from both sides of the aisle to defend Justice Department practices in states that have legalized marijuana for recreational purposes, Holder insisted the Obama administration has not ‘retreated.’  Holder also said the DOJ won’t scale back marijuana punishments by rescheduling the drug, as House Democrats have been pushing President Barack Obama to do, saying he was ‘satisfied’ with what the department is doing.  ‘The notion that somehow we have retreated from our enforcement of the Controlled Substances Act with regard to marijuana is not accurate,’ Holder told the House Judiciary Committee. He reiterated a DOJ memo laying out eight areas of priority for pot prosecutions, including marketing to minors, driving under the influence and criminal cartels.”

By |2017-02-04T07:39:01-07:00April 10th, 2014|Federal Dispensary Attacks, Stories & Articles|Comments Off on Eric Holder in the Hot Seat on Pot, Fired Up to Defend DOJ Enforcement
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Ultra Health, LLC, vs. Healing Healthcare, Inc., & Scan4Health, LLC

Ultra Health, LLC, sued Healing Healthcare 3, Inc. (Rocky Pahwa’s nonprofit corporation) and Scan4Health, LLC. See Ultra Health, LLC’s Verified Complaint and Application for Restraining Order and Preliminary and Permanent Injunction.  The basis of the lawsuit is a Joint Venture Agreement between the parties.  At a hearing on March 14, 2014, Judge Herrod asked the parties for evidence as to who has a license to own and operate an Arizona medical marijuana dispensary.  The defendants gave the judge the letter dated March 14, 2014, from the Arizona Department of Health Services, which states “AZDHS can confirm that it does not recognize Ultra Health, LLC as a holder of this or any other dispensary registration certificate.”

Ultra Health, LLC, amended its Complaint in the above-referenced lawsuit to add Holistic Patient Wellness Group, LLC, as a defendant.  HPWG is a client of my law firm, KEYTLaw, LLC.

By |2019-06-14T08:27:54-07:00April 9th, 2014|AZ Marijuana Law Lawsuits, Stories & Articles, Zoned Properties & Duke Rodriguez|Comments Off on Ultra Health, LLC, vs. Healing Healthcare, Inc., & Scan4Health, LLC
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Ultra Health Threatens to Sue Florence

Florence Reminder & Blade Tribune:  “Duke Rodriguez, principal officer of Ultra Health in North Scottsdale, has hired a Scottsdale attorney to represent his company when it pursues a lawsuit against the town of Florence.  Jeffrey S. Kaufman will represent Ultra Health when it begins its legal battle to establish a medical marijuana dispensary in Florence. . . . Rodriguez said the decision comes in the aftermath of the Town Council’s 5-2 vote on March 17, which denied a conditional use permit to his company to dispense medical marijuana . . . . The lawsuit could be filed in Pinal County Superior Court as soon as tomorrow, Rodriguez said. . . .

[Rakesh “Rocky”] Pahwa, who was trying for his fourth conditional use permit in Florence, urged the council to vote against Ultra Health’s request. He said his nonprofit company, Healing Healthcare, has the dispensary license for the Florence Community Health Analysis Area, but was not on the application for the town’s permit.”

See also “Florence denies medical marijuana permit, again.”  This story states:

Rakesh “Rocky” Pahwa, up for his fourth try for a conditional use permit to open a dispensary in Florence, asked the council to deny it. He explained his nonprofit company, Healing Healthcare, has the dispensary license for the Florence community health analysis area but is not on the application for the town’s permit.  Pahwa was in partnership with the medical marijuana company Ultra Health of North Scottsdale, which was the applicant.

By |2017-02-04T07:39:01-07:00April 9th, 2014|AZ Marijuana Law Lawsuits, Stories & Articles, Zoned Properties & Duke Rodriguez|Comments Off on Ultra Health Threatens to Sue Florence
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Pro-medical Marijuana People Launch Recall Effort Against State Senator

Capital Media Services:  “Supporters of medical marijuana research have targeted a Republican state senator for recall because she is blocking a measure that could fund it.  But the measure could be more public relations than actual political power.  Kathy Inman, secretary of the newly organized Arizona Veterans Assistance Committee, said Monday that Kimberly Yee has used her position as chair of the Senate Education Committee to kill a measure that would allow some of funds collected from medical marijuana users and dispensaries to be used for university-based research on the drug.”

By |2017-10-07T09:56:02-07:00April 9th, 2014|Stories & Articles|Comments Off on Pro-medical Marijuana People Launch Recall Effort Against State Senator
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Sahuarita Medical Marijuana Dispensary to See Changes

Green Valley News & Sun:  “Sahuarita’s medical marijuana dispensary is under new management . . . . The name will be changed to UltraHealth Green Valley . . . said Duke Rodriguez . . . . UltraHealth, which specializes in several aspects of the medical marijuana industry, including growing the crop, has begun taking over management and will continue to take over during the next month, Rodriguez said. The three full-time employees will become employees of UltraHealth, which has 25 employees statewide . . . . His organization, which is more active in the Phoenix area, is courting a group of five dispensaries . . . . ‘We have experience at growing and cultivation and a wider access to inventory,” Rodriguez said’.”

Sahuarita’s dispensary is owned by Broken Arrow Herbal Center, Inc.

Query:  Where and how does Ultra Health have experience growing and cultivating marijuana?  See “AZ Dept. of Health Services Confirms Ultra Health, LLC Lacks a License for a Medical Marijuana Dispensary.”

By |2019-06-14T08:28:16-07:00April 6th, 2014|Stories & Articles, Zoned Properties & Duke Rodriguez|Comments Off on Sahuarita Medical Marijuana Dispensary to See Changes
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Black Market for Pot is Thriving in Colorado

Washington Times:  “Just because marijuana is legal in Colorado doesn’t mean the black market for the drug has disappeared. Rather, the opposite, police officials said.  ‘[Legalization] has done nothing more than enhance the opportunity for the black market, said Lt. Mark Comte of the Colorado Springs police vice and narcotics unit, in The Associated Press. ‘If you can get it tax-free on the corner, you’re going to get it on the corner’.”

By |2014-04-06T12:20:13-07:00April 6th, 2014|Colorado News, Stories & Articles|Comments Off on Black Market for Pot is Thriving in Colorado
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George Soros’ Crusade: Legalizing Marijuana in the U.S.

Washington Times:  “Billionaire philanthropist George Soros hopes the U.S. goes to pot, and he is using his money to drive it there.  With a cadre of like-minded, wealthy donors, Mr. Soros is dominating the pro-legalization side of the marijuana debate by funding grass-roots initiatives that begin in New York City and end up affecting local politics elsewhere.  Through a network of nonprofit groups, Mr. Soros has spent at least $80 million on the legalization effort since 1994

By |2014-04-04T06:46:00-07:00April 4th, 2014|Stories & Articles|Comments Off on George Soros’ Crusade: Legalizing Marijuana in the U.S.
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