A sample of a cannabis plant that was found on a farm by staff from the Agency of Agriculture, Food and Markets in October 2018.
Updated at 5:28 p.m.
The medical marijuana business Champlain Valley Dispensary allegedly outsourced the growth of approximately 300cannabis plants to a farm that wasn't licensed to grow pot, which grew them to maturity before the dispensary returned to harvest the crop.
A lab test conducted last fall by the Agency of Agriculture, Food and Markets found that a piece of plant debris recovered at Pete’s Greens vegetable farm in Craftsbury contained 21 percent THC, the psychoactive compound found in marijuana.
The farm had a license to grow hemp plants, according to an agency document, but the legal limit for THC in Vermont-grown hemp is 0.3 percent. Plants with a higher concentration of THC are considered marijuana and are subject to strict growing regulations that require a permit, locked facilities and other security measures.
According to an Agency of Ag report obtained by the cannabis information and advocacy organization Heady Vermont, agencystaff responded last October to an anonymous complaint that Pete’s Greens was growing weed. Cary Giguere, the agency’s director of plant health and resource management, said Friday in an emailed statement that the agency regularly receives such reports, but investigations usually find that the plants in question are legal hemp.
“We had multiple complaints of non-compliance over the course of the last growing season,” he wrote. “All of those cases were investigated within 48 hours of receiving the complaint. All but one of those cases proved to be hemp after the samples were tested at the Vermont Agriculture and Environmental Laboratory.”
According to the agency’s report, that sample was collected on a farm road at Pete’s Greens on October 3, 2018, just one day after Champlain Valley Dispensary staff came to the farm and finished harvesting 230 of the plants.
Agency staff interviewed Pete’s Greens business manager Amy Skelton about what they’d found. She told them the plants were the dispensary’s and thatfarmer Pete Johnson had agreed to grow them on his land.
In an interview Friday, Johnson said he was "totally blown away" when he learned that the sample from his farm tested at 21 percent. Johnson said he'd been in talks last spring with Champlain Valley Dispensary about the possibility of growing medical marijuana in his greenhouse space if the company got another license to grow weed. Since Johnson hadn't done so before, "they said, OK, why don't you grow some hemp for us?" he recalled.
“In hindsight, I should have definitely had a contract and some description of the seed stock," Johnson said.
Agency of Agriculture, Food and Markets
The Pete's Greens greenhouse where the cannabis grew
The farmer said Champlain Valley Dispensary planted the crop in mid-to-late summer, and dispensary employees would periodically test the plants to ensure that they were below the state THC limit for hemp. Those employees assured him no samples tested too high, Johnson said.
According to Johnson, state officials told him last October that they didn't plan to test the samples they collected on his property, and then he never heard back. It wasn't until this week, when a reporter for Heady Vermont showed him the results of the tests, that Johnson said he learned he'd been growing some fairly potent leaf.
In a written statement, Champlain Valley Dispensary executive director Shayne Lynn said the farm partnership was for hemp, but he didn't explain why the plants had such a high concentration of THC.
"Since the inception of the state’s medical cannabis program, we have been strong advocates for the development of clear and beneficial testing standards for cannabis and hemp products grown in Vermont," he wrote. "After consultation, we acted in compliance with all state laws and regulations. We appreciate the state’s thorough examination."
Giguere, in his statement, said that the Agency of Ag referred the case to the Department of Public Safety, which houses the state’s medical marijuana registry and regulates marijuana dispensaries. The agriculture agency only regulates hemp, and Giguere said it can hold rogue hemp growers to account through its licensing system.
“Growers found not to be in compliance jeopardize their ability to apply for hemp licensure in future years if the non-compliance was found to be other than negligent,” he wrote.
Johnson said he plans to apply for another hemp license this year, though he's partnering with a different company and has a contract and documentation of the seeds' genetics. Giguere told him that the Ag investigation "wouldn’t have any effect on me getting a future hemp permit," Johnson said.
It's unclear whether the Department of Public Safety took any action in response to the agency report. An email obtained by Seven Days reveals that an Ag Agency employee emailed Public Safety Commissioner Tom Anderson the investigation and test results on November 20, 2018.
Vermont State Police spokesman Adam Silverman confirmed that Champlain Valley Dispensary is still licensed by the state but offered little more information about the matter.
"When DPS received notification of this incident from the Agency of Agriculture, Food and Markets late last year, the Department reviewed the matter for compliance with the rules and regulations of the Vermont Marijuana Registry, a component of DPS," he wrote in an emailed statement. "We are unable to comment further at this time."
Rep. Sarah Copeland Hanzas (D-Bradford) said she learned of the allegations Thursday evening, but the information didn't change her view of the cannabis regulation bill under consideration by the House Government Operations Committee, which she chairs. Interviewed Friday, she said the Department of Public Safety seems more concerned with processing regulatory forms efficiently than regulating medical weed businesses.
"Maybe this is [an] indication that there hasn't been a truly regulated market," Copeland Hanzas said.
House Government Operations vice chair John Gannon (D-Wilmington), who has worked for the U.S. Securities and Exchange Commission and the Financial Industry Regulatory Authority, said the department isn't organized like a normal regulatory agency. Most importantly, he said, there is no regulatory enforcement staff within the Department of Public Safety's medical marijuana program.
Senate Judiciary Committee chair Dick Sears (D-Bennington) said Friday morning that the case shows the need for a fully regulated marijuana market in Vermont.
"It seems to me that the quicker we get to tax-and-regulate, the better off we'll all be," he said. "And these problems will all go away."
To help stifle the illicit market for weed, Sears is pushing a policy in a separate bill that would allow the Vermont Department of Taxes to collect a $100,000 fine from anyone caught selling drugs illegally. He said that could also help in situations where businesses violate regulations.
"I don't want to send anybody to jail, but I am in favor of having them pay taxes on their ill-gotten gains," he said.
See the Agency of Agriculture, Food and Markets report below: