Cannabis & Crony Capitalism: From Matt Gaetz to Trulieve

10 Jun Cannabis & Crony Capitalism: From Matt Gaetz to Trulieve

The sex scandal investigation of Florida’s far-right Rep. Matt Gaetz interlocks with a controversy concerning favoritism in handing out medical marijuana license in the Sunshine State. And one of the key beneficiaries appears to be Trulieve — now the biggest operator in Florida and one of the leading cannabis companies in the United States.

Trulieve is currently winning headlines over its effort to acquire Harvest Health & Recreation, the largest cannabis operator in Arizona and also a major operator in Florida, in a stock deal valued at $2.1 billion. As Forbes reports, the transaction, if approved by regulators, will create one of largest cannabis companies in the US, expanding Trulieve’s footprint to 126 dispensaries and 22 cultivation facilities across 11 states.

But coverage gushing over a cannabis business success story ignores the origins of Trulieve, which trace back to a nexus of prominent Florida Republicans, including names currently making stomach-churning national headlines. Chief among these are the Beshears brothers — one of whom is directly implicated in Gaetz’s alleged sex junket to the Bahamas.

2018: Key Year for Gaetz and Trulieve

A key turning point for Trulieve came in 2018 when it merged with a Toronto-based former mining company, Schyan Exploration. With this hefty capital infusion, it unambiguously joined the ranks of Big Bud.

Interestingly, 2018, Trulieve’s breakthrough year, was also the year of the key event in the Matt Gaetz scandal that has now become a national embarrassment for the Republican Party.

The young star of Trump’s brave new GOP has been one of the biggest loudmouths promoting the pernicious fantasy that the 2020 elections were stolen by Biden. But Trump and the party leaders are now dropping Gaetz like the proverbial hot potato as the FBI investigates his suspected sex trafficking — including accusations of paid sex with an underage girl.

And this is but the most salacious element of a wider web of public corruption also said to be under federal investigation. Yet Gaetz continues to trumpet Trumpian rhetoric about “draining the swamp,” taking post-truth irony to truly surreal levels.

Bawdy in the Bahamas

In September 2018, Gaetz took a trip to the Bahamas, which has now emerged as the major episode in the investigation.

With him on the trip was Halsey Beshears, a seven-year Florida state legislator from Jefferson County who stepped down as chief of the state’s Department of Business & Professional Regulation as the Gaetz scandal unfolded. Also along for the fling in the Bahamas was Dr. Jason Pirozzolo, an Orlando hand surgeon and cannabis entrepreneur. Pirozollo is the one who is believed to have paid for the travel expenses, accommodations, and female escorts.

As Politico notes, Gaetz flew commercial, but Beshears was on a private flight. Also part of the entourage were at least five young women, one of whom was under the age of 18 at the time. When they arrived back in Florida on Beshears’ private plane, they were briefly stopped and questioned by US Customs officers for looking suspiciously young.

The Wingman

Another figure under scrutiny by the feds in connection with the Bahamas trip is Seminole County tax collector Joel Greenberg. Greenberg has been named as the “wingman” who recruited “attractive young women” online for Gaetz and arranged for payments in return for sex. The Tallahassee Democrat reports that some sources also place Greenberg along on the same Bahamas trip, presumably for such unsavory purposes.

On May 14, Greenberg pleaded guilty to six federal charges, including sex-trafficking of an underage girl, and agreed to cooperate with the Department of Justice investigation.

Greenberg is also the figure whose failure to cover his tracks led to exposure of the whole affair. As the New York Times reported on April 9, what began as a probe into irregularities in the Seminole County Tax Collector’s office has expanded into the current media debacle for the GOP.

Daily Beast cites unnamed sources saying that Greenberg is preparing to name 15 women Gaetz paid for sex with — including “paid escort” and Instagram model Megan Zalonka, with whom Gaetz is said to have snorted coke at a Trump fundraiser where he was the featured speaker in Orlando in October 2019. Greenberg allegedly set Zalonka up with a “taxpayer-funded no-show job.”

Gaetz denied all this in a Washington Examiner op-ed April 5, in which he accused: “The swamp is out to drown me.”

The Bahamas trip is what’s critical — regardless of whether Gaetz personally got his hands dirty with the money or farmed this out to Greenberg. “Traveling across state lines is what creates a federal hook for a prosecution,” Arlo Devlin-Brown, a former federal prosecutor, told CBS News. “It doesn’t matter that [Gaetz] personally paid them as long as he knows someone is doing that.”

Gaetz & Florida’s Cannabis Cartel

The interlocking connections between Gaetz, Beshears, and Pirozzolo extend beyond an apparent mutual penchant for lechery. Gaetz and Halsey Beshears served together in the Florida Legislature, and federal records reveal that Pirozzolo made two donations of $1,000 each to Gaetz’s campaign arm, “Friends of Matt Gaetz.” But as the Associated Press notes, they also had another mutual interest: Florida’s $1.2 billion medical marijuana industry.

In addition to all the other sleaze, investigators are said to be looking at Gaetz’s connections to the cannabis biz — including whether Pirozzolo and others sought to influence state legislation Gaetz sponsored.

It was Gaetz who ushered through the House version of the 2014 legislation that became Florida’s medical marijuana law. That law, the Compassionate Medical Cannabis Act, initially only permitted low-THC varieties (such as the famous Charlotte’s Web). But it still unleashed a “green rush,” as investors and entrepreneurs raced to grab a share of the fledgling market.

That same law, however, strictly limited who could cash in on the rush. As recalled by an exhaustive story in the Orlando Sentinel (also run by the Tampa Bay Times and other Florida papers): “Less than 24 hours before the Florida Legislature passed the state’s first medical marijuana law in May 2014, Matt Gaetz and other members of the state House of Representatives rewrote the bill to limit who would be able to get in on the ground floor of what has since become a billion-dollar business.”

The revision set rigid vertically integrated standards for businesses, which could apply to become one of five “dispensing organizations.” The chosen few would be responsible for every step of the process from cultivation to processing to distribution to retail sales. Only state-licensed nurseries could apply — and only those that had been in operation for at least 30 years and had at least 400,000 plants.

A Bro Deal

One businessman who made the cut was Thad Beshears – the brother of Gaetz’s then-fellow state Rep. Halsey Beshears, who of course voted for the Compassionate Medical Cannabis Act, and went along with its last-minute revision. Thad Beshears, a co-owner of Simpson Nurseries, outside Tallahassee, was also a major Republican Party donor, giving $50,000 in one day during the 2016 presidential election to political action committees supporting Donald Trump’s campaign and the Republican National Committee. During the 2020 campaign, Beshears donated more than $200,000 to pro-Trump and Republican committees.

Halsey Beshears, a former president of the Florida Nursery, Growers & Landscape Association, had also worked for Simpson Nurseries until 2013, according to financial disclosures cited by the Orlando Sentinel.

Named as critical in Florida’s controlled green rush is Ballard Partners, an international lobbying firm with offices in Tallahassee. It is led by prominent Republican fundraiser Brian Ballard, and until April of this year also employed former Florida state Rep. Chris Dorworth, who Gaetz once named as his political “mentor.”

Ballard Partners procured investment interests in at least three firms that won cannabis licenses. Two of these were Hackney Nursery of Quincy and May Nursery of Havana — which later joined with Simpson Nursery to form the company that in 2016 became Trulieve. And Thad Beshears joined Trulieve’s board of directors.

Today, Trulieve pays Ballard Partners $160,000 a year to serve as its lobbyist in Washington DC, according to congressional lobbying records. And Thad Beshears remains on Trulieve’s board.

Jason Pirozzolo also appears to have been instrumental in securing a sweet deal for Gaetz’s pals. As the Orlando Sentinel writes, Pirozzolo “helped craft that 2014 legislation and then started several marijuana businesses, including a consulting firm that worked with companies applying for marijuana licenses and a professional association that sells sponsorships to marijuana vendors.” That’s the American Medical Marijuana Physicians Association (AMMPA), which names Pirozzolo as co-founder and chairman of the board.

A ‘monopoly for a few entities’

The Florida medical marijuana program has been expanded over the past years, largely as a result of Amendment 2, the 2016 voter-approved initiative. THC products are now allowed, and there are currently 22 licenses for Medical Marijuana Treatment Centers (MMTCs), as they are today called.

But Amendment 2’s enabling legislation barred actual smokable cannabis flower, keeping in place a restriction written into the 2014 legislation. This was challenged in the courts by medical cannabis users, including Lou Gehrig’s disease sufferer Cathy Jordan. They won in a state appeals court in 2018. The question was headed to the Florida Supreme Court when the state Legislature and new Gov. Ron DeSantis blinked in March 2019, passing a bill to allow smoking of herbaceous flower.

And Amendment 2’s enabling legislation also kept in place the “vertical” model that Gaetz helped craft in 2014, favoring big, well-connected operators. This has especially generated protest from African American farmers hoping to get a piece of Florida’s cannabis pie.

On May 27 of this year, the Florida Supreme Court upheld that vertical model, rejecting arguments that the regulations violate the intent of the voters in Amendment 2.

Florida Agriculture Commissioner Nikki Fried denounced the ruling, writing in a statement: “Florida’s medical marijuana industry will remain closed-off, restricting freedom of opportunity, weakening the free market, and leading to ever-higher prices for patients.”

The ruling came in response to a challenge launched by Tampa-based Florigrown LLC, which prevailed in the lower courts. During arguments before the Supreme Court last October, Florigrown attorney Katherine Giddings portrayed the 22 licensed operators as unfairly privileged. “This is definitely a closed class because no one can ever receive the same privileges that these have had,” she told the court. “This is everything but a free market. It has created a monopoly for a few entities. That is why the licensing scheme is inappropriate and arbitrary.”

Turpitude in Tallahassee

Parallel to the Gaetz sleazefest is another scandal under federal investigation — and prosecution — in Tallahassee. Trulieve CEO Kim Rivers is married to real estate developer John “JT” Burnette, who faces federal racketeering charges, accused of bribing Tallahassee city commissioner Scott Maddox to kill a downtown hotel project that would have been competition for one his own developments. Tallahassee Downtown Improvement Authority director Paige Carter-Smith is also named as a co-conspirator in the case.

Maddox and Carter-Smith pleaded guilty to fraud charges in August 2019, and currently await sentencing. They face up to 45 years in prison. The case against Burnette has been pending for two years, repeatedly postponed due to the pandemic.

In December 2019, investor analyst firm Grizzly Research issued a scathing report on the affair, alleging that the relationship between Rivers and Burnette is more than personal: “Our research indicates that Burnette is Trulieve’s key construction partner.” The report stated: “CEO Kim Rivers and her husband JT Burnette are at the very center of a political crime ring the FBI has subpoenaed, and we have shown the multiple previously unknown connections between Trulieve and Burnette. We expect serious consequences for CEO Kim Rivers and Trulieve.”

In a press release, Rivers denounced the Grizzly report as a smear-job intended to benefit short-sellers who bet against the price of Trulieve stock: “We ask that our investors be aware that the Report reflects the opinions of an acknowledged short seller, whose sole interest is in profiting from a decline in the price of the Company’s shares. I have full confidence in our management team and their abilities to continue to serve our customers without being distracted by these baseless allegations. Trulieve reserves all of its rights to take appropriate legal action against those responsible for the Report.”

And indeed, Trulieve proceeded to sue the analyst firm for libel. By then, Trulieve shareholders had already launched their own class-action suit against the company.

Cannabiz Tycoons Underwrite the Right

If a time-traveler from the Woodstock generation were to land in contemporary America, it would likely come as a shock how many captains of the legal cannabis industry are supporters of a Republican Party that is now lurching deeper into reaction than even Nixon dared to dream of on his worst day.

Recall the headlines of 2019, when four Rudolph Giuliani associates were busted on suspicion of influence-peddling related to the cannabis industry in California and Nevada — and two of them were directly linked to Giuliani’s Ukraine intrigues. Charges are still pending against the quartet.

An investigation last year by Cannabis Wire found that more than a dozen cannabis executives and investors focused their 2020 election funding on political action committees backing Republicans.

Among these was Trulieve CEO Kim Rivers, who gave $2,800 to the Tillis Daines Majority Committee — backing Republicans Steve Daines in Montana and Thom Tillis in North Carolina in their successful bids to hold on to their Senate seats.

Single-issue politics may be a partial explanation here. Cannabis Wire writes: “Neither Senator Tillis nor Senator Daines has expressed support for cannabis legalization. However, in the last couple of years … Senator Tillis co-sponsored a medical cannabis research bill, and Senator Daines introduced an amendment to expand medical cannabis access for veterans.”

Both Tillis and Daines voted against impeaching Trump after the January 6th Capitol insurrection.

Jason Vedadi, the former executive chair of Harvest Health & Recreation (Trulieve’s acquisition target), last year gave $1,000 to the Tillis Daines Majority Committee.

This is a far cry from the image Trulieve seeks to promote of itself. In a November 2020 press release, Trulieve boasted of its $40,000 donation to the Last Prisoner Project, a group seeking clemency for cannabis prisoners. The donation was part of the Last Prisoner Project’s “Roll it Up for Justice” campaign, which encourages cannabis businesses to support its clemency efforts. The press release boasted of “Trulieve’s ongoing efforts to support initiatives aimed at bringing restorative justice to the lives of those unfairly impacted by past cannabis convictions.”

Such efforts are to be applauded, but for those who view cannabis legalization in the context of a broader struggle for social justice, there is an unsettling dissonance here. Legalization was supposed to take cannabis out of the hands of criminal networks, but the new model often looks like crony capitalism.

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Bill Weinberg, a Project CBD contributing writer, is a 30-year veteran journalist in the fields of drug policy, ecology and indigenous peoples. He is a former news editor at High Times magazine, and he produces the websites CounterVortex.org and Global Ganja Report.

Copyright, Project CBD. May not be reprinted without permission.