PORT ANGELES — The Washington State Liquor and Cannabis Board has issued two emergency marijuana license suspensions for North Coast Concentrates, saying it sold marijuana on the black market.
The suspensions are effective for 180 days beginning Nov. 2 — ending May 1 — while the state board seeks a permanent revocation of the licenses.
North Coast Concentrates has “demonstrated a willful disregard for the laws and rules governing the regulated marijuana system,” LCB Cmdr. Jennifer Dzubay wrote in an internal memo obtained in a public records request.
“They have diverted marijuana to sell on the black market, and tried to cover it up when questioned by police.”
The producer has locations at 2933 E. Highway 101 and 52433 Highway 112 in Port Angeles. North Coast Concentrates is owned by William Fetner, Ronald Johnston, Jennifer Johnston, Donald Enright and Steven Elkins.
Ronald Johnston did not return calls for comment.
According to the LCB, William Cagey, an employee of North Coast Concentrates, was pulled over by the Lower Elwha Klallam Tribal Police on Sept. 20. Officers said that during the stop, they found 112 grams of concentrates, three large jars and a large tote bin of untraced marijuana flower.
Cagey was arrested for investigation of driving under the influence of marijuana and possession of marijuana and remained in the Clallam County jail until Ronald Johnston paid his bail Oct. 18, records say.
Lower Elwha Klallam Tribal Prosecutor Diane Cabrera said she will not comment on pending cases. The Peninsula Daily News requested tribal court records related to Cagey’s case, but the request was denied.
The products seized during the traffic stop were not in the state’s traceability system and an investigation revealed that the product had been removed from the licensee’s grow operations, the state said.
Cagey told LCB officers that the large tote filled with marijuana was waste and he intended to take it back to the farm to throw away, records say.
When officers asked why there was no manifest, Cagey said he didn’t know how to do the manifests on a computer.
“If you are carrying around unmanifested products, you are liable for all penalties before legalization happened,” said Mikhail Carpenter, a LCB spokesperson. “It’s a pretty big penalty to sell on the black market.”
A sign on the door of North Coast Concentrate’s Port Angeles location alleges the business violated the state Uniform Controlled Substances Act.
Under state law — prior to legalization in 2012 and applicable in this case, the state says — marijuana is considered a Schedule I drug and a violation of the state Uniform Controlled Substances Act is a class C felony.
Records say this is the licensee’s only criminal conduct violation within a three-year time period and that the presumed penalty is a $5,000 find, but “because of aggravating circumstances [LCB] seeks an aggravated penalty of revocation/cancellation.”
Text messages from Cagey’s cellphone show that Ronald Johnston was aware the marijuana was being sold on the black market, according to the state.
Records say the marijuana products being sold were returned from retailers. Ronald Johnston said stores were returning products due to color issues.
“I got about 175g of our wax from returns. Sour cookies, Bruce banners pink Starfighter, bubblegum, and more. U can have it all to sell,” Ronald Johnston wrote in a text message to Cagey, according to LCB records.
Officers said that Ronald Johnston told them that Cagey “must be doing it on his own,” when they asked him about selling the returned products.
While executing the suspension orders, officers said they seized 556 pounds of marijuana flower product, 24 pounds of marijuana oil and 204 plants from both locations.
Other text messages revealed that Cagey had been selling marijuana before and after the seizure. Cagey admitted he sold to family members on the reservation, the state said.
Emergency suspensions represent an extraordinary exercise of the state’s power and the LCB is mandated to ensure that an emergency suspension is reasonable, justifiable and legal in every way, the state said.
The LCB issued one emergency suspension in 2017, and six in 2018.
Carpenter said that out of the more than 2,000 licenses issued, the state has “seen a couple of instances of diversion where we’ve had to issue emergency suspensions or shut down businesses.”
He said the investigation into North Coast Concentrates is ongoing. Any recommended criminal charges likely would be referred to the Clallam County Prosecuting Attorney’s Office.
This story originally appeared in the Peninsula Daily News, a sibling paper of The Daily Herald.