A handful of CBD and cannabis companies turned out to be figments of the imagination as a con artist successfully duped investor after investor, but his conning spree has come to an end.

A California man pleaded guilty April 5 to a slew of federal criminal charges for swindling investors out of $18.4 million. He conned several investors—all as he was already completing a sentence for prior criminal charges—by inventing companies that he claimed invested in hemp farms and cannabis-infused retail products. He also claimed to run a sham bottling business for CBD-infused products. The bogus businesses turned out to quickly fall apart.

People magazine reports that Mark Roy Anderson, 69, pleaded guilty to two counts of wire fraud, according to an announcement from the U.S. Attorney’s Office, Central District of California.

Anderson took the plea agreement, and admitted to engaging in two separate schemes that swindled investors. His scheme kicked off right after he was released from federal prison while he was on home confinement and supervised release. Police say Anderson has been conning people since the 1990s but moved into the cannabis sector where there was a lot of loot to be gained.

From June 2020 to April 2021, Anderson convinced investors to fund his company Harvest Farm Group, to harvest and process hemp grown on his farm into medical-grade CBD isolate. 

“Anderson convinced investors to invest in Harvest Farm Group by falsely representing that, through the company, he owned and operated a hemp farm in Kern County,” the report reads. “He also lied that had already completed successful and profitable harvests of hemp from the farm. He also falsely said he was using his own machinery and equipment to convert the hemp into CBD isolate and Delta 8, a psychoactive substance that, like CBD isolate, could be used in consumer products ranging from olive oil to body cream.”

Anderson weaseled his way out of skeptical investors and claimed that past fraud convictions were not in fact him. When investors demanded money, Anderson falsely told them that sales of products derived from hemp grown at the farm had been delayed because of the COVID-19 pandemic.

In another scheme, which ran from April 2021 to May 2023, Anderson duped investors by soliciting money for Bio Pharma and Verta Bottling—two more sham companies—by claiming that these businesses successfully manufactured, bottled, and packaged commercial products.

Specifically, he claimed Bio Pharma manufactured and sold infused products such as CBD-infused avocado oil, olive oil, pain cream, gummies, tequila, and chili oil. Anderson also claimed that Verta Bottling manufactured and sold beverages and a variety of food products.

“Anderson falsely stated that his bottling companies owned and possessed millions of dollars’ worth of assets, including—in Bio Pharma’s case—hemp biomass, CBD isolate, CBD oil, and—in Verta Bottling’s case—manufacturing equipment and an assignable lease for a warehouse to manufacture and sell its products,” the announcement reads.

How did he do this? Anderson carefully fabricated fake legal and business documents, which included fake purchase order contracts that he claimed showed agreements with third-party companies to purchase tens of millions of dollars’ worth of products manufactured by his bottling companies. Anderson also provided victims with fake samples of products he claimed that he manufactured by his bottling companies.

Investors have been warned about bogus cannabis companies before.

In 2019, Massachusetts Secretary of the Commonwealth William Galvin issued a warning to potential cannabis industry investors to be wary of scams and unscrupulous operators after filing fraud charges against two entrepreneurs in the state. In an alert released by Galvin’s office, the secretary urged investors to approach offers for unregistered securities from unlicensed sellers with caution, noting that the cannabis industry is not monitored by federal regulators or state-chartered banks.

“No one regulator can police this marketplace,” Galvin said in the statement. “My Securities Division intends to scrutinize these offerings to proactively prevent investor harm.”

Celebrities like Tom Hanks and Sacha Baron Cohen have been targets of fake CBD or cannabis companies, sometimes in the form of fake endorsements or misuse of their likenesses. Sacha Baron Cohen’s massive $9 million lawsuit was filed against a dispensary that ran a billboard ad with his image without permission, but the actor and plaintiff have reached an agreement to drop the lawsuit.

According to court documents filed on July 12, 2021, Sacha Baron Cohen filed a $9 million lawsuit against Somerset, Massachusetts-based Solar Therapeutics, a dispensary, for running a billboard ad with his image without his permission.

Solar Therapeutics erected a billboard on an interstate highway in Massachusetts that features a picture of Baron Cohen as Borat, with his thumbs up and the words “It’s Nice!,” one of Borat’s catchphrases.

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New York cannabis regulators last week offered new assistance to entrepreneurs in the state’s emerging cannabis industry with the launch of an accelerator program for recreational marijuana dispensary owners. Under the new program announced by the New York Office of Cannabis Management (OCM) on Friday, the state’s Conditional Adult-Use Retail Dispensary (CAURD) license holders will receive training and services to help grow their businesses.

The launch of the accelerator program is the result of a months-long search by state officials for an organization with demonstrated expertise in cannabis retail education and the capacity to conduct intensive acceleration for licensees across the state. The search resulted in the selection of Our Academy, a minority women-led nonprofit organization that has provided training for cannabis social equity entrepreneurs in weed-legal states across the country.

“We’re grateful to be supporting the next generation of diverse cannabis dispensary founders and community leaders in New York,” Hilary Yu, co-founder and executive director of Our Academy, said in a statement from the OCM on Friday. “Since starting this work four years ago, we have worked with many cannabis equity applicants, operators and others harmed by the war on drugs and we are excited to bring our mentorship driven, peer-to-peer approach to one of the country’s largest and most promising markets.”

First Retail Dispensary Licenses Awarded Last Year

New York legalized adult-use cannabis in 2021, and the first recreational marijuana dispensary opened its doors in Manhattan late last year. In August 2022, the OCM announced that the first Conditional Adult-Use Retail Dispensary (CAURD) licenses would be issued to companies headed by individuals with past convictions for marijuana-related crimes and to organizations that provide services to justice-involved individuals. 

Successful applicants receive aid from a $200 million Social Equity Cannabis Investment Fund, which was created to help finance the leasing and outfitting of up to 150 recreational marijuana dispensaries across the state. The agency awarded the first CAURD licenses in November, and earlier this month, the OCM announced that the number of CAURD licenses would be doubled, bringing the total to 300.

“New York State is committed to providing our CAURD licensees with the tools needed to prosper in this market. This cohort of licensees are strong, qualified, community leaders and we’re here to make sure they are ready to thrive as they launch New York’s cannabis industry,” said Tremaine Wright, chairwoman of the Cannabis Control Board. “I especially want to thank Our Academy for creating a business resource program with the intention of helping licensees effectively ramp up their business plans so they are prepared to operate in the NY Cannabis market.”  

Only CAURD licensees will have access to this CAURD Accelerator Program run by Our Academy. The first 175 licensees will be divided into two 20-week cohorts that will receive comprehensive training in cannabis retail operations, finances and marketing. The program will consist of 41 intensive live workshops covering the process of launching and managing a profitable cannabis retail dispensary.

“The name of the game here is lasting success for entrepreneurs,” said Chris Alexander, Executive Director of the Office of Cannabis Management. “Our partnership with Our Academy will prepare licensees to not only operate a thriving cannabis business but also to be lasting leaders in establishing New York State’s cannabis market and beyond.” 

CAURD licensees enrolled in the accelerator program will have access to digital recordings of all 41 Our Academy workshops and other learning tools developed by the organization. The entrepreneurs will have access to two workshops per week consisting of recorded courses, workbooks with lesson plans and online quizzes. Licensees will also receive resources including standard operating procedure plans and customized financial documents.

The CAURD Accelerator Program participants will also be provided with mentors who have opened or operated one or more licensed cannabis dispensaries, have experience raising capital for marijuana businesses or have managed licensed delivery operations. Additionally, five specialist consultants will host weekly office hours for all program participants in critical areas of finance, operations, compliance and marketing.

“The CAURD Accelerator Program is a reflection of the Office’s commitment to the success of our justice-impacted retailers,” said Damian Fagon, OCM chief equity officer. “When we provide New Yorkers with the tools they need to build and grow successful businesses, we create opportunities for economic mobility, social equity, and community empowerment.”  

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First reported by the Los Angeles Times, the geographically small city of West Hollywood plans to rebrand itself as a cannabis mecca, or as “Emerald Village”—a name coined by a cannabis trade group of the same name. At less than two square miles in size, the city is packing in cannabis businesses, and could reinvent itself as the “Amsterdam of the far West.”

“Welcome to the Emerald Village, the capital of cannabis culture,” the organization says on its website. “We invite you to explore all the gems West Hollywood has to offer in this golden age of cannabis including culinary, wellness, entertainment, nightlife, art and personalized experiences.” Emerald Village calls itself the “official marketing organization for licensed cannabis businesses in West Hollywood.”

West Hollywood is currently home to just six dispensaries, but city officials plan to approve as many as 40 cannabis permits over the course of the next year.

West Hollywood is already home to one cannabis retailer for every 5,959 residents—a much higher concentration of cannabis businesses than even Los Angeles. West Hollywood Community and Legislative Affairs Manager John Leonard told Los Angeles Times that the city received over 300 applications for just eight licenses to operate dispensaries in 2018.

It would be a rebrand from West Hollywood’s current status as the LGBTQ “main street” of Los Angeles—with over 21 gay bars on Santa Monica Blvd alone. But the city’s high focus on retail is ideal for cannabis brands as well.

Current member organizations of Emerald Village West Hollywood include Alternative Herbal Health Services (AHHS), The Artist Tree, CALMA, LA Patients and Caregivers Group (LAPCG), MedMen and Zen Healing Collective.

“I really see it as a place that can redefine what the image of cannabis is to the general public,” Kelly Lyon, of The Artist Tree told CBS News. “It would be awesome to be able to have a business where you can appreciate art. If yoga is more your thing, you can walk down the street and do that while you consume and everyone is sort of bringing a different idea to the table.”

It makes sense—considering that West Hollywood is already a pioneer in cannabis culture. A few years ago, Lowell Farms opened what it called “America’s first cannabis restaurant,” a café serving cannabis-infused foods.

“From the first cannabis café in the United States to entertainment and art venues enhanced by cannabis, West Hollywood’s Emerald Village is home to the most unique and creative cannabis experiences in the world,” Scott Schmidt, Emerald Village Executive Director told WeHoville. “The Emerald Village is ready to welcome travelers who will appreciate our imaginative cannabis experiences alongside our iconic LGBT nightlife, entertainment, world-class hotels, award-winning restaurants and strong sense of community.”

The development is being driven in part by celebrities. The Parent Company—Jay-Z’s massive cannabis enterprise—recently purchased the female-run CALMA, a West Hollywood dispensary according to an October 4 press release. Patricia Arquette plans to open an edible lounge in the Flaming Saddles building—the same building where Prince recorded “Purple Rain.”

Woody Harrelson launched numerous attempts to become involved with cannabis businesses in West Hollywood, getting denied a dispensary permit in 2016. Bill Maher is also getting involved in the business plans.

Clothing and fashion stores are also getting involved. Fred Segal’s flagship Sunset location, which sits on the West Hollywood-Los Angeles border area, hosted a cannabis pop-up that drew The Freak Brothers cast Pete Davidson, Blake Anderson, John Goodman, Andrea Savage, Phil LaMarr and Danny Gendron.

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