The eyes of the law have always been very firm on players in the cannabis industry and it is no different now that the gradual shift from prohibition to legalization is in full flow. Cannabis is still classified as illegal in the eyes of the FDA and the federal government though many states have legalized its use for recreational and medicinal purposes. Many have unconsciously arrived at a state of relaxation where they believe they can get away with activities that are still considered illegal in the eyes of the law.
Many small cannabis companies are gradually seeking ways to cut corners and make the most of the ripe cannabis industry. However, it usually gets them at the receiving end of the wrath of the law. The recent victim of this is the owner of a cannabis delivery company in Massachusetts. Read on as we look into the nooks and crannies of the federal case that got her sentenced to four years in prison.
A closer look into the offenses
Medical marijuana program involves the use of cannabis for medical ailments such as relief from pain, inflammation, seizures, and all-round wellness. A number of states with open markets for medical marijuana programs have instilled proper parameters to help in the regulation of the market and its participants. One that is common is the set of regulations put in place to guide the prescribing physician and the supplier of the product for the patient. It is therefore important for all players in such markets to be well versed with the requirements and regulations existent in such markets. This is the reality that put Deana Martin in a complex situation before a federal judge in Massachusetts. She was sentenced to four years in prison as the owner of Northern Herb, a cannabis delivery company in Massachusetts. The sentence was given as she was charged for tax evasion, money laundering, and cannabis distribution and possession. Martin had earlier pleaded guilty to the charges before the court in May.
The full reach of the issues with the Northern Herb stream of activities is numerous however their breach of cannabis laws is in line with the stipulated Massachusetts medical cannabis program. All cannabis users for medical purposes are required under cannabis laws in the state to register with the medical cannabis program of the state. Likewise, registered companies that will be dealing with such users are also required to ask for proof of such registrations from their customers. Unfortunately, Northern Herb operated outside of this required stipulation. The company delivered cannabis to patients who placed orders for cannabis products online without asking for proof of registration from those it delivered to.
The company was also in breach of cannabis laws during its delivery of cannabis products within the states. The company was implicated in the delivery of cannabis to unattended locations such as hallways and front doors. Delivery to such locations is contraindicated in that unknown third parties can have access to it which is not accepted for cannabis delivery. The company used different locations in places such as Milton, Foxborough, Hyde Park, and Canton to store and distribute cannabis. These sets of illegal activities and more made Northern Herb a target for a federal investigation and a court case resulting in time served and payment for restitution.
The company was in full activity between 2015 and 2018 where it reaped millions of dollars in terms of revenue. It offered services to many citizens of Massachusetts through its website where it offered cannabis products for sale and delivery. Throughout this period of operations, Northern Herb did not remit any amount in form of tax because the company is unlicensed with the state of Massachusetts. Prosecutors claimed the revenue of the company between May 2016 and July 1028 exceeded $14 million on which no amount was remitted as the tax on its sales revenue. The company also operated a simple cash policy which is collected from customers and used to transact with suppliers and less than 25 workers on its payroll. During this period, the company failed to report its worker wages to the Internal Revenue Service nor issue W-2s or 1099s to its workers.
The sentencing and its implications
The outcome of the federal ruling for Deana Martin did not stop at the four-year sentence. She is required to pay restitution of $528,146 and three years of supervised release after she is freed from prison. This follows the line of the ruling of Tatiana Fridkes who was the office manager at Northern Herb. She was sentenced in September to two years of supervised release and restitution of $82,000 after she pleaded guilty to conspiracy to distribute cannabis. The counsel for Martin while speaking to Law360 stated that the four-year sentence given to his client was a product of extensive negotiation.
It is important to state that the four-year sentence given to Deana Martin could easily have been higher. Advisory sentencing guidelines placed the penalty for such offenses to range from 108 to 135 months. However, the counsel for Deana Martin, R. Bradford Bailey believes such a penalty overstates the seriousness of the crime by his client. Deana Martin has been facing prosecution by the US Attorney’s Office for the District of Massachusetts for the charges since April 2019 before the final ruling in October 2021.
The case of Deana Martin and its kind is not the first in the cannabis industry and it is surely not going to be the last for now. The law will always frown its eyes on such criminal offenses especially in states where the battle for cannabis legalization was fought bravely and won. It is therefore important for the progress of the industry that fewer issues such as these are propagated by its major players. This is to ensure that the common goal and push of all cannabis advocates all around the world can be easily attained. The goal remains global legalization and it is very much within reach.