In October 2016, RUDOLF WILLIAM LOUIS GIULIANI spoke to adoring crowds of misguided Americans, supporting DONALD JOHN TRUMP at our St. Augustine Amphitheater. Alert Amphitheater Manager Ryan Murphy made sure they paid in advance by wire transfer. TRUMP has stiffed thousands of vendors as a corrupt businessman with five bankruptcies, as well as refusing to pay more than a dozen venues for rental and security.

Now we learn that several of RUDOLF GIULIANI's Soviet-born associates, LEV PARNAS and IGOR FRUMAN, under indictment in federal court in New York, were hustling to get medical marijuana licenses here in Flori-DUH. Mr. GIULIANI, you have the right to remain silent, but we wish you wouldn't. GIULINI's father served time in prison for armed robbery of a milkman. The apple does not fall far from the tree.

Giuliani associates pursued Florida medical marijuana license. Is industry vulnerable?

The state business has 277,000 patients and counting.

At Surterra’s facility on the outskirts of Tallahassee, Cultivation Manager Wes Conner displays the fully grown flower of one of the company’s marijuana plants in 2016. (Associated Press | 2016)

By Samantha J. Gross

Published Nov. 1

In Florida, the medical marijuana space is headed to becoming a multi-billion dollar business with more than 277,000 patients and counting. The nascent industry has grown exponentially since it was expanded by a 2016 citizen ballot initiative to legalize pot for medical use.

While flourishing, the industry is still new and experts from Florida and beyond say the state has a bit of catching up to do when it comes to creating a secure business environment.

After two Soviet-born South Florida businessmen indicted on campaign finance charges were found to have pursued entry into Florida’s medical marijuana industry, it left an open question for those who work in cannabis: How could this have happened?

Lev Parnas and Igor Fruman — naturalized U.S. citizens now subpoenaed to turn over documents in the impeachment investigation into President Donald Trump — sought to invest in one of Florida’s state-issued cannabis licenses. Their plan appears to have been unsuccessful due to an inability to prove that they had the cash, but a Miami Herald report raised questions of how a purchase like it could happen.

Lev Parnas and Igor Fruman [Alexandria Sheriff's Office]

According to their indictment, Fruman, Parnas, and business partners Andrey Kukushkin and David Correia, worked in Nevada in June 2018 to gain a marijuana license there. Prosecutors say they planned to create a marijuana company, and Correia created a table of planned political contributions worth up to $2 million in a “multi-state license strategy,” the indictment says.

The group failed to obtain a license because it applied too late in the state process, according to the indictment. But prosecutors said Parnas, Fruman, Correia and the foreign business partner “continued to meet into the spring of 2019” in discussion of their marijuana business.

Florida licenses are obtained from the state following a long and expensive application and vetting process, after which they can be used to grow, process and sell medical marijuana. Currently, 13 of the 22 licenses operate this way.

Alternatively, the license continues to exist as a piece of paper worth around $50 million to a potential buyer. The license can grow in value and eventually flip for large amounts of cash to a wealthy investor or company publicly traded on the Canadian stock market. In other words, those licenses can be purchased by people who wouldn’t have made it through Florida’s requirements that applicants have experience cultivating Florida plants or any real experience in agriculture at all. They must, however, pass a background check.

The value and intrigue of licenses in legalized states caught the attention of the FBI, which took the unusual step four months ago of warning about public corruption in the marijuana industry in western states where they said an individual license can be resold for as much as $500,000.

“We see people willing to pay large amounts of money to get into the industry,” Supervisory Special Agent Regino Chavez said in a short podcast released in August by the FBI.

A fledgling Florida industry

Florida’s medical marijuana industry has been mired in controversy since its inception in 2014, when lawmakers legalized low-THC cannabis and authorized five licenses under what was called the “Charlotte’s Web” law to primarily treat children with seizure disorders.

In 2016, about 71% of Floridians who voted passed a constitutional amendment to more broadly legalize medical marijuana for other treatments, and the Legislature created a law to implement their wishes in 2017.

The new law required officials at the Florida Department of Health’s Office of Medical Marijuana Use to issue 10 more licenses, bringing the total to 15.

The licensing structure has since been fraught with litigation, including suits from hopeful licensees who were denied, and accusations that the state set up an unconstitutional business structure called “vertical integration,” which requires businesses to grow, test, process and sell their product without any middlemen.

Now, the state is moving forward with a process to issue four new licenses under a different part of the law, which requires more licenses after 100,000 patients enrolled in the program.

Concern over the financials of the marijuana industry is due to banking restrictions. Cannabis companies often do business in cash, and secure payment options can be limited because of marijuana’s standing as a federally illegal substance.

Florida is also a magnet for wealthy Russian expatriates, and Russian entrepreneurs have stepped into the marijuana space. One of the top medical marijuana companies in the country, Curaleaf, is run by Russian billionaire and oil magnate Boris Jordan. Curaleaf, based in Massachusetts, is the third-largest treatment center chain in Florida.

Florida Chief Financial Officer Jimmy Patronis recently cautioned consumers about companies doing business “in duffle bags of cash,” but a former director of Florida’s medical marijuana program, Christian Bax, says banking isn’t a huge issue for the state’s treatment centers.

That said, Bax says the lack of clarity on how these businesses should manage cash is troubling.

“It’s in the best interest of everyone for the federal government to give some clear direction sooner rather than later,” he said.

Scant regulation at first

When the first medical marijuana licensing plan was set up in 2014, the framework was bare bones.

A very small number of licenses were awarded through a grading system, and in just a few years became part of a highly sought public market. Multinational companies turned their eyes to Florida, and the licenses soon flipped for millions.

Because of the federal prohibition on marijuana, the oversight over these major transactions falls to state regulators. The quickly growing industry will “continue to be a strain on resources for state governments until the federal government does something,” said Bax, who ran Florida’s marijuana program from 2015 to August 2018.

“The current banking issues with cannabis, and the sheer size of transactions that can reach well into the hundreds of millions of dollars, the mergers and acquisitions happening in cannabis right now are extremely complicated, “ Bax said. “Every cannabis regulator in the country is having to figure out how to handle the sheer volume and complexity of all of these deals.”

To date, there’s only about 35 dedicated marijuana program employees in the state, and the program is run by the health department’s chief of staff, Courtney Coppola.

Because the state law was created with a public health and medical focus, the approach is patient-forward and limited. The office is limited to acting within the narrow scope of the law, which sets the budget and hiring power for the department.

In a statement Thursday, a department spokesman said the Office of Medical Marijuana Use “remains committed” to using best practices with license applications and change of ownership requests.

“Each ... application is thoroughly vetted for compliance with Florida law and department rules before consideration is given to any change to a medical marijuana treatment center application,” he said.

Lewis Koski, a regulatory consultant who helped get Colorado’s marijuana program off the ground, said Florida differs from states like Colorado in that way. In Colorado, the state issues thousands of licenses and employs thousands of employees to oversee the process.

“The Florida market is largely dictated by what’s in that legislative component,” said Koski, who now runs a marijuana tracking company in Lakeland. “It makes sense that the agency around it is tailored to what’s in the legislation.”

But some people in the industry are less trusting.

Adam Elend, the CEO of Florigrown, said there “could not be more of an opportunity for someone who wants to prey on our medical marijuana market.” Elend said he’s not at all surprised that people like Fruman and Parnas showed interest.

Florigrown is the Tampa marijuana company fighting the state’s medical marijuana licensing process in court.

Elend said he fears the lack of oversight by the state on some of the publicly traded companies leaves room for corruption, and wonders why the state isn’t doing more to look into the private equity funds that own some of the licenses worth millions.

“We’ll never catch them here,” he said. “And that’s not really acceptable.”

Robert Friedman, a South Florida-based cannabis legal consultant, says the limitations in Florida’s system make it difficult for anyone to operate in the state. While the booming market and skyrocketing patient numbers look appealing to outsiders, Friedman said the limited license structure is “incredibly prohibitive” and gives preference to wealthy investors who can afford to navigate the application process.

“They created a golden ticket. Right now, depending on your resources and who you know, you can apply for a license for $1 million and if the cards go your way, it’s $50 million on a piece of paper,” he said. “Only wealthy people can be in the game ... for this industry to survive, it is going to take some really deep pockets.”

In addition to attracting wealthy, foreign investors due to high license costs, Friedman says the industry also draws in people who are “used to doing things outside the lines.”

“Cannabis is still transitioning from a black market,” he said. “This is an industry trying to clean up its act.”

Is Florida vulnerable?

But there is some skepticism as to how susceptible to corruption Florida really is.

Some experts say that while the industry faces growing pains, there’s a reason why actors like Fruman and Parnas weren’t able to break into the industry.

Medical marijuana licensure is one of the most closely watched issues in Florida, said Bax. So closely watched by the Legislature and media, he said, that there’s less room for fraud than some may think.

“The idea that someone at this stage in the game could make a phone call and get a license worth $50 million completely misunderstands what’s going on in Florida right now,” he said. “It’d be like walking onto the field in the middle of the Super Bowl and trying to steal the game ball.”

Koski, who also has a background in gaming, says the marijuana industry can look to casinos as a “platinum standard” in ensuring those interested in obtaining licenses don’t have criminal backgrounds. Casino licensing was born from the industry’s history with organized crime, and the standard for vetting license holders is relatively high nationwide.

But that being said, Koski notes that there’s “no right way” for state regulators to act.

Whether it’s a single state licensing authority like in Colorado, a cannabis commission in Massachusetts or the medical program in Florida, “all have the potential to be successful.”

Jody Hunt


United States Assistant Attorney Generalfor the Civil Division

In an urgently worded letter recently sent to Harvard, Antigua and Barbuda Prime Minister Gaston Browne demanded that the university pay his country reparations “for the gains Harvard enjoyed at the expense” of Antiguan slaves.

Browne’s Oct. 30 letter to Harvard University President Lawrence Bacow — reported Tuesday night by the Miami Herald and Harvard Crimson — draws a direct line from Harvard Law School’s success today to the oppression of Antiguans enslaved by a Massachusetts-based plantation owner in the Colonial era.

That plantation owner was Isaac Royall Jr. — the wealthy benefactor of Harvard’s very first law professorship in 1815, whose name is still attached to Harvard’s distinguished Royall Professor of Law position today.

“We consider Harvard’s failure to acknowledge its obligations to Antigua and the stain it bears from benefiting from the blood of our people as shocking if not immoral,” Browne wrote.

Browne’s request for reparations comes as numerous universities across the United States, including Harvard, have sought to reckon with their enduring ties to the chattel slavery economy. Last month, Princeton Theological Seminary pledged $27 million in reparations, in the form of scholarships and other initiatives to assist descendants of slaves; in September the Virginia Theological Seminary also created a $1.7 million reparations fund.

Slaves helped build Virginia Theological Seminary. The school will spend $1.7 million in reparations.

Though the university hasn’t committed to reparations, Harvard also has taken steps to extensively research and acknowledge its ties to slavery, particularly related to Royall. Under pressure from students, Harvard Corporation decided in 2016 to retire the Harvard Law School shield, which bore the Royall family coat of arms. And in 2017 the university erected a stone memorial and plaque honoring “the enslaved whose labor created wealth that made possible the founding of Harvard Law School.”

But to Browne, the acknowledgment has not been enough. The university, Browne wrote, has failed to take steps to make more concrete amends with Antigua through reparations. He claimed the university has ignored Antiguan officials’ past requests to begin discussing how reparations could work. He suggested in his letter that Harvard could offer financial assistance to the University of the West Indies campus in Antigua and Barbuda.

“Reparation from Harvard would compensate for its development on the backs of our people,” Browne wrote. “Reparation is not aid; it is not a gift; it is compensation to correct the injustices of the past and restore equity. Harvard should be in the forefront of this effort.”

Why some students say Harvard Law School’s crest is ‘a source of shame’

Harvard spokesman Jason Newton provided Bacow’s Tuesday response letter to Browne. Newton noted Wednesday morning that while Bacow did not respond to a 2018 letter from the Antigua and Barbuda ambassador, a Harvard official did respond to a 2016 letter, which described Harvard’s efforts to confront slavery.

Neither the 2016 letter nor Tuesday’s addresses the core request from Antigua and Barbuda: reparations.

“We recognize that there is more work to be done,” Bacow wrote Tuesday. “Indeed, Harvard is determined to take additional steps to explore this institution’s historical relationship with slavery and the challenging moral questions that arise when confronting past injustices and their legacies."

Bacow did not specify what the additional steps would be. Browne had requested a meeting between representatives from Harvard and Antigua and Barbuda, but in his letter, Bacow does not say whether he would be open to facilitating such a meeting.

The story of the Royall family begins at the turn of the 18th century, when Isaac Royall Sr. sailed to the West Indies and settled on the island of Antigua to make a living in the lucrative, slave-fueled sugar trade. The son of a carpenter, Royall Sr. had few prospects in the British colony of Massachusetts before moving to the island, according to a 2011 report, “Harvard and Slavery: Seeking a Forgotten History.”

But after purchasing stake in a slave ship named the “Mayflower,” Royall Sr. quickly began to amass his wealth, eventually earning enough to start his own sugar cane plantation in Antigua. That’s where his son, Isaac Royall Jr. — the namesake of Harvard’s first professorship — was born in 1719.

The family wouldn’t stay forever. By the 1720s and ’30s, disastrous hurricanes and earthquakes struck the island, drought left many slaves dying of starvation, and disease and infection ― flourishing among slaves performing the backbreaking work of chopping sugar cane — caused countless other Antiguan deaths, according to the 2015 book, “On the Battlefield of Merit: Harvard Law School, the First Century.”

As a result, Royall Sr. began planning his return to Medford, Mass., as early as 1732. He was finally pushed over the edge after the failed 1736 slave revolt, according to the book.

The bloody event, the authors of “On the Battlefield of Merit” say, is part of Harvard Law’s history too.

“The oldest and arguably the most distinguished chair in American legal education is Harvard’s Royall Professorship of Law. … But it is a historical fact that this chair is directly linked to a slave revolt on the Island of Antigua in 1736,” wrote Harvard Law School professor Daniel R. Coquillette and Ohio State University professor Bruce A. Kimball.

To plan the revolt, years in advance, about 2,000 slaves gathered in a forest to prepare to overthrow the white government, the professors reported, citing testimony from an 18th century British inquiry. Slaves in Antigua outnumbered white men four to one in 1723, according to Coquillette and Kimball’s research. But the alleged revolt conspiracy was never carried out. It instead resulted in the brutal executions of 88 enslaved Antiguans — including the Royall family’s head slave, who was burned at the stake, according to the professors.

The Royalls returned to Medford, Mass., in 1737 and brought their Antiguan slaves with them to work their new 540-acre farm. Royall Jr. inherited much of his father’s wealth, at least 18 slaves and land in both Massachusetts and Antigua following his father’s death, according to the “Harvard and Slavery” report. He became a popular statesman in the Massachusetts legislature and in local government — but following the outbreak of the American Revolution, he fled to England, according to “On the Battlefield of Merit.”

In exile, Royall Jr. penned his will in 1778 — in which he awarded the “gift to Harvard College that was to ensure Royall’s lasting fame,” Coquillette and Kimball wrote. He gave the college more than 800 acres of land, which he specified should “be appropriated towards the endowing a Professor of Laws in said Colledge, or a Professor of Physick and Anatomy” — whichever the college thought was best, Royall Jr. wrote.

In 1815, nearly 25 years after the slave owner’s death, Harvard used the proceeds from Royall Jr.'s gift to create the law professorship, establishing the foundation of today’s Harvard Law School.

“The bequest to Harvard came from the proceeds of the plantation in Antigua and from the exploitation and sale of human beings that Royall regarded as chattel,” Browne wrote in his letter. “Professor Janet Halley, on assumption of the Royall Professorship in 2006, was right to acknowledge in her inaugural address that Isaac Royall’s slaves ‘are intrinsically bound, if you will, to the grant that established the Royall Chair.’ ”

Antigua and Barbuda, which celebrated the 38th anniversary of its independence from Britain on Nov. 1, has been working with the Caribbean Reparations Commission for the last several years to make the “moral, ethical and legal case for the payment of reparations by the governments of all the former colonial powers and the relevant institutions of those countries.”

Browne said that Antigua and Barbuda’s ambassador to the United States, Sir Ronald Sanders, wrote to Bacow to press the issue in November 2018. At that time, Sanders pointed out that “the reputation Harvard enjoys internationally is intertwined with the dark legacy of Royall’s Antigua slaves who died in oppression, uncompensated for their lives in slavery and their death in cruelty.” Sanders sought a “genuine effort” from Harvard to begin working toward reparations.

But Sanders received no response, Browne said.

Meagan Flynn is a reporter on The Washington Post's Morning Mix team. She was previously a reporter at the Houston Chronicle and the Houston Press.

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