HTTP/1.0 200 OK Content-Type: text/html Personal Grow-Ops Emerge As Targets For Organized Crime
Pubdate: Fri, 01 Dec 2017
Source: Globe and Mail (Canada)
Copyright: 2017 The Globe and Mail Company
Contact:  http://www.theglobeandmail.com/
Details: http://www.mapinc.org/media/168
Author: Molly Hayes
Page: A1

PERSONAL GROW-OPS EMERGE AS TARGETS FOR ORGANIZED CRIME

The proliferation of personal yet industrial-scale marijuana farms,
licensed and shielded by health privacy laws, has created a shadow
market in which individual patients are collectively churning out as
much marijuana as some commercial producers - with none of the scrutiny.

Although they operate under the guise of legitimacy, a Globe and Mail
investigation has found that these personal grow-ops are prime
targets for robberies and abuse by organized crime.

As the federal government edges closer to scrapping Canada's
longstanding prohibition against the sale of recreational marijuana,
the country's two-tiered medical marijuanaregime serves as a major
obstacle to one of Ottawa's frequently stated legalization goals: the
elimination of gangsters from a legal marketplace.

At one end of the medical marijuana spectrum is what Health Canada
calls its licensed producers ( LPs), the 76 commercial growers who
harvest their product in heavily guarded and regularly inspected
commercial facilities, where every gram is accounted for and shipped
directly to customers via mail order. These companies have websites,
publicized addresses and identifiable executive teams. At the other
end is a licensing system that allows individual patients to grow for
their personal use or designate someone to grow on their behalf.
Thousands of these personal or designated-grower licences have been
issued in the past year alone under the federal Access to Cannabis for
Medical Purposes Regulations.

Among them, according to records recently released under the Access to
Information Act, are some 600 "supergrowers," people who have somehow
obtained prescriptions permitting them to have on hand, at any time,
at least 244 plants and 35 kilograms of dried bud - far more than any
individual patient could feasibly ingest. ( The average patient
consumes less than three grams a day, which, according to Health
Canada's calculator, would allow them to possess 10 plants and 450 g
of dried bud.)

Anne McLellan, chair of Ottawa's legalization task force and a senior
adviser with law firm Bennett Jones LLP, says it is "incumbent" on the
government to make changes to this personal licensing system if it is
serious about cutting out organized crime.

"If one of your key objectives is to limit diversion into the illegal
marketplace, then you do have to look at the medicinal stream and see
what is happening there, because you cannot let that undermine one of
your primary public policy objectives," Ms. McLellan said.

Owing to the patchwork nature of Canada's medical marijuana laws -
which have undergone two makeovers since 2014 - Health Canada cannot
say exactly how many personal grow-ops exist. It acknowledges there
could be as many as 28,000 personal or designated operations actively,
and legally, harvesting millions of plants under old, grandfathered
licences. But the department does not know, because it stopped keeping
records for such grow-ops when the regulations first changed in 2014.

But the bulk of the current regime's aforementioned supergrowers - 408
- - are located in Ontario, according to the records recently released
by Health Canada - three times the number in British Columbia. Still,
Health Canada will not provide street addresses or postal codes of
these operations - not even the cities or regions in which they are
based.

Collectively, these supergrowers, which account for roughly 8 per cent
of all licensed personal or designated growers, are able to produce a
minimum of 140,000 plants at a time.

Over the past three years, these large-scale, "personal" cultivation
facilities - operating with no transparency about who owns them and no
accountability about who ultimately consumes their product - have
spread across rural Canada. They have also become magnets for theft
and violence.

On Sept. 19, 2016, in the same greenhouse where he'd spent most of his
adult life growing cucumbers and tomatoes, Peter Muileboom found
himself staring down the barrel of a shotgun. Robbers, disguised by
nylons pulled tightly over their faces, had burst into the Muileboom
family's Niagara Region farmhouse at about 4 a. m. pretending to be
police - and were now ordering the then- 62- year-old farmer to hand
over his latest harvest: medical marijuana.

The robbery was interrupted by the real police, who descended on the
area in droves after a neighbour heard the commotion and dialed 911.
The robbers scattered. In a manhunt in which the canine unit and even
a helicopter were deployed, five people were tracked down and charged
with an assortment of criminal offences.

But in the end, Mr. Muileboom would wind up charged as
well.

It was three years earlier, on the brink of bankruptcy amidst
plummeting tomato prices, that Mr. Muileboom and his wife got into the
medical marijuana business. They'd put their farm up for sale - the
farm where Mr. Muileboom had lived his whole life - and received a
surprising offer from a Brampton man. They could stay there, rent-
free and with full-time pay, they said this prospective buyer told
them, if they would help him grow medical marijuana. Mr. Muileboom
agreed.

Craig Ferguson, their new landlord, said he was licensed to do this,
Mr. Muileboom told police in his statement after the robbery. Four
people came by the farm to hand over their licences, he added, but he
never saw them again.

Early on, Mr. Muileboom says he was instructed to just grow as much as
he could - never mind the limits on the licences. Soon, Mr. Ferguson
was co-ordinating weekly pickups. Each time, Mr. Muileboom told
police, he would have between 20 and 30 pounds of dried marijuana,
vacuum-sealed in one-pound packages, ready to go.

At the time of the robbery, according to a search warrant application
filed by the Niagara Regional Police Service, three licences were
registered to the farm, allowing it to grow a total of 513 plants at a
time. But when police arrived, there were more than 3,000 plants in
the greenhouses.

Mr. Ferguson's original goal had been to turn the farm into a
commercial LP - a proposal that was met with relentless backlash from
the community despite the star-studded political team backing it,
including former prime minister John Turner, who caused a stir when he
showed up at a town hall meeting to support the proposal.

In August, 2014, the LP dream died. Their application was refused by
Health Canada - a rejection that multiple sources who were involved
with the venture say they saw coming, owing to internal whispers about
the farm's existing grow-op.

This past March, according to search-warrant applications, police
watched security-camera footage from the property they say showed Mr.
Ferguson "dropping off envelopes of money for several people who were
working in the grow operation." They also saw him carrying a full
black garbage bag out of the processing area the day after the
robbery. The video showed him tossing it into the back of an SUV,
which another man got into and drove away.

Police also learned in March that, after the robbery, Mr. Ferguson had
obtained a licence, in his own name, to grow another 146 plants at the
farm.

More search warrants were executed and another 1,500 illegal plants
were seized. Mr. Muileboom - who described his role as "kinda like a
manager" - was charged with unlawful production of marijuana. Mr.
Ferguson was charged with unlawful production of marijuanaas well as
possession of marijuana for the purpose of trafficking.

Both men declined to speak to The Globe. Their cases remain before the
court.

But the robbery was hardly an isolated incident when it comes to such
personal licences.

Tom Carrique, co-chair of the Canadian Association of Chiefs of
Police committee on organized crime, said that in his force's
jurisdiction - the suburbs north of Toronto - there have been two home
invasions in the past year alone by criminals looking to steal medical
marijuana from people who were overgrowing. And across Canada, he
said, there have been a number of shootings and homicides linked to
"what would be considered legal business within the medical marijuana
framework. There have been numerous homicides connected to these locations."

In January, 2016, five robbers wearing disguises were arrested in
Innisfil, Ont., just outside of Barrie, after they tried to pry open
the door of a factory that had been converted into a personal grow-
op. Police learned plants had been robbed from the same address the
night before and that the thieves had come back looking for more.

And in Hamilton, a personal medical grow-op that was twice the
suspected target of drive-by shootings this year - in one instance,
bullets struck a neighbouring home, piercing the kitchen cupboards -
is infuriating residents and city council alike. When angry neighbours
took their concerns to city hall, police told them they would
rigorously enforce any bylaw offences on the property, but because the
owners had the appropriate licences, their hands were tied when it
came to the grow-op.

Brenda Johnson, the councillor for the rural area, said it is "beyond
belief" how many plants these "renegade" farmers are licensed to grow.
On top of the security concerns, Ms. Johnson said the smell is a
constant source of complaints from her constituents.

"I've driven by there and rolled down my windows. It probably took me
three kilometres just to get the smell out of my car driving away -
that's just how stagnant it is," she said. Hamilton City Council
passed a motion this year, after issues with another personal grow-op
in the downtown, to request a list of personal grow-op addresses from
Health Canada - a list the federal agency will not provide.

Ms. Johnson said she is frustrated these grow-ops are being
shielded.

"We should have those addresses. The police, at the very least, should
have those addresses."

The security features of these grow operations - which frequently
involve large and intimidating dogs - also keep anyone from accessing
the property or learning more about what is happening there.

When a house on a marijuana farm in Niagara Region caught fire in
2014, it took firefighters more than an hour to get to the blaze
because of menacing dogs guarding the property. The home burned to the
ground.

That farm, owned by a company called Bio- Med Research Technology
Inc., was purchased in 2013 and signed for by company director Ryan
Quatsch. Both he and the company's owner, Leonard Daniel Wong, had
previous drug convictions. In corporate documents, Bio- Med lists a
farm property in Acton, a small town on the outskirts of the Greater
Toronto Area, as its business address. It is the site of another
medical marijuana grow-op.

In October, two Globe reporters visited the farm in hopes of
clarifying its ownership. Up a dirt road, behind a red metal gate, in
a gravel clearing next to a barn, three Rottweilers approached the
reporters' car and started to growl. A sign on the barn with a photo
of a snarling dog warned visitors not to get out of their cars without
the homeowner present. Three cars were parked there, but no one
emerged. The reporters left.

Neighbours know what's happening there and police confirmed it is a
licensed grow-op, facilities "sheltered" by personal licences. All of
these grow-ops were diverting their product to the illegal market,
they believe. And approximately 70 per cent of the marijuana grow-ops
that police have dismantled so far in 2017 had similarly been
operating under personal licences.

In rural communities, Ontario Provincial Police ( OPP) detectives said
they have had three cases this fall alone in which grow-ops were
determined to be growing beyond their limits. In two of these cases,
they recovered weapons and identified ties to organized crime.

At a November boardroom meeting at York Regional Police headquarters
in Newmarket, Ont., officers from York Region, Toronto and the OPP
rhymed off the challenges they have faced with personal grow-ops:
fake licences, expired licences, addresses with too many licences (
the limit is four, but adding unit numbers to an address is one way
around this) and licences for people who don't need or receive any
medical marijuana.

"It's no different than with making meth, where they're smurfing [
that is, breaking down a transaction into smaller transactions to
avoid alerting authorities] for ephedrine pills. They're doing that
with the grow permits," said OPP Detective Sergeant Lee Fulford, who
works in the drug enforcement unit of the force's organized crime bureau.

Detective Jeffrey Ross of the Toronto Police Service's drug squad,
says the costs associated with running a sophisticated grow-op are
another red flag: industrial real estate, lighting and watering
equipment, plus hydro costs that would amount to thousands of dollars
a month.

"Who is able - unsupported by medical benefits - to spend thousands of
dollars a month to grow their medicine? Who can afford that for their
glaucoma?" Det. Ross said. "It just doesn't pass the sniff test."

The answer, police say, is that the marijuana is being sold - to
illegal dispensaries or on the black market both here and abroad.

Amassive grow-op was busted on Denman Island in British Columbia this
summer as part of a Toronto police investigation of the Canna Clinic
dispensaries. This "personal" grow-op, Det. Ross said, is believed to
have been a supplier for dispensaries in Ontario. but no one seems to
be able to say who runs it - although court documents and property
records offer a few clues.

The property previously operated as a mushroom business called Oyster
King, which, according to court documents, was run by three men: Bruno
Pisani, a convicted heroin trafficker and associate of Canada's most
infamous mob boss, the late Vito Rizzuto; Davide Compagnoni, who was
convicted in connection with a 2010 jewellery store robbery; and
Aleksandr Ostrovsky, a businessman named in a recent Toronto Star
investigation as the owner of a temporary employment agency. ( A
lawyer for Mr. Pisani said that, at the time his client operated his
mushroom farm, there was never any marijuana grown on the property.)

In 2009, the farm was purchased by a numbered company. That company
had two officers and directors at the time, spouses Barbara Romanow
and Mark Dafoe. During a major organized crime investigation in 2015,
when police burst into a restaurant owned by convicted drug trafficker
Diego Serrano, they seized records showing the numbered company had
proposed selling the farm to a startup marijuana firm with ties to Mr.
Serrano's family. The sale did not go through. The records also showed
that the main building on the 125- acre farm was licensed to hold 700
plants but was big enough to hold as many as 1,000.

Reached by e-mail, Ms. Romanow said she had nothing to do with the
farm. She declined to answer questions about who did.

Last year, Toronto police said, 40 per cent of the search warrants
they executed in relation to the production of marijuana were at

Two more operations were busted in the Niagara Region this fall. While
both locations had legitimate medical marijuana licences, Niagara
police said "fraudulent information" had been provided to Health
Canada in order to obtain them. Between the two properties, 14,000
plants were seized along with more than 64 kg of dried marijuana -
more than 10,000 plants over the licensed limit. Two men, ages 60 and
79, were arrested.

Health Canada says a person convicted of drug charges within the past
10 years should not be able to obtain a licence. But the department
says it only requires that applicants "attest" to a clean record. When
police conduct a raid at an overgrown operation, they can seize only
the surplus plants, which means there have been cases when they have
had to leave hundreds of technically legal plants behind - in the
hands of the accused criminals.

In Waterloo, Ont., police have been keeping an eye on a medical
marijuana grow-op that set up shop in a former nursery there some
time in the last year. The property is linked to a numbered company,
the owner of which is a Toronto man named Yi Feng Lin. A man with the
same name was part of a group charged in 2009 in a $ 16- million
marijuana bust outside Brockville, Ont. He was charged with production
of marijuana and possession of marijuana for the purpose of
trafficking, according to the Waterloo Record, but was given an
absolute discharge in 2012.

The government tried to phase out personal licenses in 2014 under
then-prime minister Stephen Harper, after it became clear the
previous personal-licensing regime was being exploited. Ottawa
created a new regime, which was supposed to limit growing to regularly
inspected commercial producers.

But patients argued this was unconstitutional, and last year, in the
Allard decision, the Federal Court agreed, resulting in the current
regulations that offer a choice: grow your own medicine personally or
buy from a commercial producer.

The Allard decision was supposed to protect patients' rights to access
medicine. But police say the ruling has instead empowered the
organized-crime groups Prime Minister Justin Trudeau has said will be
cut out by legalization. What is supposed to be for personal
medication, investigators say, can instead be diverted to supply
illegal dispensaries and the illicit street market.

"If we are to believe that [ criminals] are not working together for
the purpose of profiting … we are just being naive. These are [ not]
just individuals wanting to grow a bit of pot," Det. Ross said. "This
is big business."

Today, many still question how the Allard ruling affects the federal
government's ability to implement any changes to the medical regime.
But Ms. McLellan is not one of them - arguing that that decision was
reached in an entirely different context.

"You were dealing with a prohibited substance, but for a limited
medical exemption. That entire landscape has changed. We are now
dealing with a legal product that will be sold at retail or ordered
online. The entire framework in which these earlier decisions were
rendered has been turned upside down," she said.

Ms. McLellan agrees the move to eliminate designated-grower licences
would almost certainly attract another legal fight - and acknowledges
that could inspire reluctance on the part of the government, who has
already lost that battle once.

"They may be a little gun-shy … but there is no question that the
rules around medicinal [ marijuana] need to be revisited," she said.
"Otherwise, you've got a loophole in terms of diversion into the
illegal market - and one of the key avowed purposes of legalization
and regulation is to limit the illegal marketplace."

As long as these grow-ops are allowed to remain, experts warn, so,
too, will organized crime in the space. Much of this marijuana is
exported to begin with, police say. And even locally, they say there
will always be a market for tax-free marijuana.

"Organized crime will find a way to exploit the system," OPP Det. Sgt.
Fulford says. "Whatever regime there is, they will look for loopholes
and they will try to exploit them."
- ---
MAP posted-by: Matt