Former Chairman of Michigan’s Medical Marijuana Licensing Board Pleads Guilty to Corruption Charges

By: Jesse Adam Markos, Esq., Wachler & Associates, P.C.

Pursuant to a plea agreement filed in federal court in Grand Rapids on April 6th, the former chairman of Michigan’s Medical Marijuana Licensing Board, Rick Johnson, has admitted to accepting bribes while serving in his official capacity. Federal prosecutors allege that, over a two-year period, Johnson accepted cash payments and other benefits, such as private chartered flights, in excess of $100,000.00 in return for giving preferential treatment during the medical marijuana licensing process.

Michigan’s now-defunct Medical Marijuana Licensing Board was created by the Michigan Legislature in 2016 to issue licenses for various medical marijuana facilities. It operated within the Michigan Department of Licensing and Regulatory Affairs (“LARA”) and was tasked with approving or denying applications for licenses for medical marijuana businesses. The 5-member Medical Marijuana Licensing Board was made up of political appointees chosen by the Governor and its process for granting medical marijuana licenses was patterned after the regulatory scheme used for liquor licenses.

In May 2017, Johnson was appointed as Chairman by then-Governor Snyder. Johnson had previously served as a republican legislator in the Michigan House from 1999-2004, where he was House Speaker from 2001-2004. After leaving office, Johnson worked as a lobbyist and led a prominent Lansing lobbying firm.

As Chairman of the Medical Marijuana Licensing Board from 2017 to 2019, Johnson played a prominent role in determining which companies obtained licenses to grow, process, transport, and provision medical marijuana. But Johnson now admits that he acted “corruptly” in that role by accepting cash and other benefits in exchange for medical marijuana licenses. In particular, his plea agreement details instances where a company actively seeking licensing approval, paid Johnson in return for his voting in favor of granting them medical marijuana licenses. The plea agreement states that Johnson “acted with the intent to be influenced or rewarded in connection” with marijuana board licensing activities and arranged for the bribes to be paid to limited liability companies he controlled to hide the payments. It further states that Johnson “provided valuable non-public information” about the operation of the Medical Marijuana Licensing Board and assistance with application matters.”

The Medical Marijuana Licensing Board was abolished by Governor Whitmer in 2019 and licensing of the marijuana industry was transferred to a newly formed entity within LARA – the Marijuana Regulatory Agency (subsequently renamed the Cannabis Regulatory Agency (“CRA”)). This was after Michigan voters approved the legalization of recreational marijuana in 2018. The CRA was created to oversee licensing for both the medical and the recreational marijuana markets. It was also created, in part, to address complaints about the Marijuana Licensing Board’s inconsistent decision making and failure to consider applications in a timely manner.

The corruption charges relating to the Marijuana Licensing Board’s licensing process were announced at a time when Michigan’s marijuana business is experiencing significant growth. In fact, according to a recent report by the CRA, the legal sale of marijuana in Michigan for recreational use only rose from $128 million in February 2022 to over $200 million in February of this year. For additional information or assistance regarding this, or any other health professional licensing or compliance issue, contact Wachler & Associates at (248) 544-0888.

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