Detroit Marijuana Businessman Seeks Leniency in Bribery Case

September 10, 2023 · Green Market Report

The lawyer for a Detroit-area businessman who pleaded guilty to bribing a top marijuana regulator is disputing a recommended prison sentence range and asking that a federal judge give John Dawood Dalaly a lighter punishment regardless.

In a motion filed Wednesday, Raymond Cassar contended that the correct guideline range is 24 to 30 months in prison, not 37 to 46 months as calculated by the probation department. Prosecutors are seeking 30 to 37 months to account for his cooperation in the investigation in which three others have pleaded guilty, too.

Cassar objected to a four-level increase because the bribed official, Rick Johnson, chaired the state’s now-former medical marijuana licensing board — a high-level decision-making or sensitive position. Johnson held one vote, and three of the five members were needed to support an application, Cassar wrote.

“The fact that Defendant Johnson is a chairperson does not mean he had the ‘direct authority’ to make decisions for, or on behalf of, the Board. Defendant Johnson did not control the Board’s decision.”

While it appears the motivation for bribing Johnson was to obtain licensing approvals for a company Dalaly formed, PharmaCo Inc., the original motivation was to get help answering complicated questions on the application, Cassar wrote. He said the state Department of Licensing and Regulatory Affairs did not have the staff or ability to provide answers following the passage of a law establishing the licensing system.

After Johnson was appointed chair in May 2017, Dalaly was introduced to Johnson — a Republican former House speaker — over dinner by former Rep. Mike Callton, according to Cassar. Dalaly asked Johnson to whom he could go with questions because of difficulties with LARA. Johnson told Dalaly to contact his wife, Janice, who would act as a consultant.

Dalaly asked if it was legal, and Johnson said it was because she had her own consulting company. When Dalaly asked how much to pay, Johnson said $4,000 a month.

“This was not some well-planned out bribery scheme and as much, the Court should take this into consideration when forming a fair and just punishment,” Cassar wrote.

He said $20,000 of the $68,200 in bribes, a July 2018 wire transfer, was intended as a loan because Johnson told him he was losing his farm.

Cassar also provided background on Dalaly, 71.

His parents immigrated from Iraq when he was 11. He was the only one in the family of eight to graduate high school. He has been married for 45 years and has three children and eight grandchildren. He is a devout Catholic and volunteers as a Eucharistic minister, or communion steward, at hospitals and his church.

“He is the caregiver for his entire family,” Cassar wrote, citing how he cared for sick relatives, paid their hospital and funeral bills, and is involved with charitable works.

His 13-year-old granddaughter confronted him about what happened after she read about him on the internet.

“John responded, ‘Papa did business with a bad guy.’ John lives with regret and punishment every day when he sees what this has done to his family.”

Cassar also noted Dalaly’s business accomplishments, including his management of hospitals. He organized more than 3,000 workers in the Middle East to help create medical schools and medical facilities, according to the filing.

Johnson, of Leroy, and two lobbyists — Brian Dennis Pierce of Midland and Vincent Tyler Brown of Royal Oak — are due to be sentenced on Sept. 28. Johnson accepted about $110,000 worth of bribes and benefits, according to his plea agreement.

Toronto-based Red White & Bloom Brands (OTC: RWBYF) bought Southfield-based PharmaCo in 2022 after providing financing to the company since 2018 through an RWB subsidiary. Michicann Medical Inc. RWB was transferred 21 medical and adult-use licenses, including dispensaries and grow operations. (Full Story)

In category:Legal
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