OKLAHOMA CITY – A judicial restraining order has prevented the State of Oklahoma from padlocking a medical marijuana grow operation in Okfuskee County after its license was surrendered by an admitted “ghost owner” without the knowledge of the farmer himself.
Professor Weed LLC is a farm that was developed by Zai Fu Xiang, 27, an electrical engineer who, according to his attorneys, sold his belongings and borrowed money from his family to move from Oakland, California, to Weleetka, Oklahoma, in January 2020 to start a business as a licensed medical marijuana grower.
At that time, a Tulsa law firm, Jones Brown, whose principals were attorneys Logan Michael Jones and Eric Brandon Brown, “began taking on voluminous amounts of clients for the establishment of medical marijuana business, compliance with regulatory frameworks, and obtaining licenses” from the Oklahoma Medical Marijuana Authority and the Oklahoma Bureau of Narcotics and Dangerous Drugs, Xiang’s attorneys informed the court.
In March 2020 Xiang met with Jones and paralegal Kathleen Windler, now 69, and a former employee of the Jones Brown Law Firm, to receive “legal advice regarding Professor Weed LLC.”
Xiang said he was told by Windler and Jones that despite the state’s residency requirement, he “did not need to wait two years” to obtain a grower’s license because Windler “could act as a consultant and stand in as the lawful Oklahoma resident” in order to meet the residency requirement.
A state statute decrees that a business applying for a commercial medical marijuana license must have at least 75% ownership by an Oklahoma resident.
The 2019 law also specifies how long someone has to reside in-state to be considered a resident. For purposes of a medical marijuana business license, a person qualifies as an Oklahoma resident if they provide proof of Oklahoma residency for:
Ÿ at least the last two years immediately before the date of the license application; or
Ÿ five consecutive years out of the past 25 years immediately preceding the date of the license application.
U.S. District Judge Stephen P. Friot in Oklahoma City’s Western District federal court upheld the residency requirement last year in a lawsuit alleging the condition violated the Commerce Clause of the U.S. Constitution.
“The court has absolutely no reason to doubt that ‘there is a vibrant marijuana industry’ in the United States and in Oklahoma,” the jurist wrote. Nevertheless, “trafficking in marijuana” is still illegal under federal law.
Xiang said he paid Jones Brown $11,500 and received a marijuana grower’s license from the OMMA on April 22, 2020, and an OBNDD registration on May 18, 2021.
Xiang leased 22 acres in Okfuskee County for a “multiple-year term” and invested approximately $120,000 in capital improvements on the property, which included building a dozen greenhouses, extending power and other utilities to the buildings, plus soil, plants and fencing.
MMJ grower’s license
was to be deactivated
“Unexpectedly” Xiang received an email from the Medical Marijuana Authority on Aug. 26, 2021, stating that the license for Professor Weed had been deactivated.
“Neither the email nor the OMMA website contained any information regarding the basis” for rescinding the license, wrote Xiang’s attorneys, Viridian Legal Services of Tulsa.
Furthermore, Xiang “received no notice from the OMMA prior to deactivation” and has not received any notice from the agency “regarding an administrative proceeding or other opportunity … to be heard and/or show compliance.”
Therefore, the agency violated the Due Process Clause of the Oklahoma Constitution, Viridian asserted.
Subsequently, telephone calls from Viridian revealed that the OMMA deactivated Xiang’s license “because Kathleen Windler purportedly ‘surrendered’ the license” on Aug. 17, 2021.”
The OBNDD initiated an investigation of Jones and Brown more than a year ago, and found that the two attorneys directed medical marijuana businesses to sign consulting agreements with employees of their law firm who posed as “ghost owners” – Oklahomans who own companies on paper only – of approximately 400 marijuana firms in Oklahoma.
Windler was listed on official documents as the majority in-state owner for scores of MMJ businesses in Oklahoma. Indictments issued by a multicounty grand jury against Jones and Brown allege that Windler “executed written documents agreeing to falsely claim 75% ownership of entities” that applied to the OMMA and OBNDD for marijuana grower licenses during the course of a conspiracy.
Windler voluntarily surrendered 300 MMJ business licenses, officials reported – including Xiang’s.
License surrendered
by ‘ghost’ owner
The OMMA and the OBNDD deactivated Xiang’s licenses “despite knowing that:”
Ÿ the two state agencies “were investigating Kathleen Windler and her employer, Jones Brown Law Firm, beginning in 2020.”
Ÿ three felony charges were filed against Windler in Garvin County on May 21, 2021, accusing her of cultivation of marijuana “without lawful authority,” endeavoring to violate the Uniform Controlled Dangerous Substances Act, and possession of a controlled dangerous substance without a tax stamp affixed.
The charges against her were dismissed last November, at the state’s request. Court records provide no explanation why.
Ÿ Windler filed suit against Brown and Jones in Cleveland County on Aug. 20, 2021, claiming she was never an owner in any medical marijuana business entity “but was part of a fraudulent ‘organizational apparatus’ crafted by” the Jones Brown Law Firm.
Windler claimed she suffered damages in excess of $75,001. The case was settled out of court and was dismissed on Jan. 1, 2022.
In a letter mailed to Xiang on Aug. 31, 2021, the OMMA confirmed that his license was deactivated because “the owner of the commercial license … executed a surrender.” Viridian Legal Services pointed out that Xiang and Professor Weed LLC are the actual owners and “never executed a surrender” of that license.
Furthermore, Viridian informed the court that Windler:
Ÿ did not return the licenses to the state agencies “because she is not in physical possession of either license.”
Ÿ did not provide information required on the OMMA’s surrender form “because she is not involved and does not know it.”
Ÿ did not surrender any of the stock of the controlled substance to the OBNDD or provide security for it “because she is not in possession of it.”
In one court document, Windler said she “owned none of the hundreds of businesses whose licenses were sought and obtained” through the “legal handiwork” of Logan Jones and Eric Brown, that she “exercised no control over any businesses, received no profits of the businesses, did not interact with any day-to-day operations of the businesses, and had no access to any bank accounts, assets, or liabilities of the businesses.”
“Accordingly,” Viridian Legal Services argued, OMMA’s deactivation of Xiang’s grower’s license was “arbitrary and capricious and in excess of the statutory authority of the agency.”
Judge issues TRO
Okfuskee County District Judge Lawrence Parish issued an emergency temporary restraining order requested by Professor Weed LLC to prevent the OMMA and the OBNDD from deactivating its MMJ grower licenses.
Parish issued his TRO on Sept. 9, 2021, decreeing that it would “remain in full force and effect until further order of the Court.” At a follow-up hearing on Jan. 26, 2022, the judge wrote, “After arguments of counsel, the Court reserves ruling at this time.”
Professor Weed LLC was still licensed with the OMMA on June 24. Its license expires on May 9, 2023, the OMMA website reflects.
Southwest Ledger placed a call to Viridian Legal Services on June 24 and left a message with a receptionist, asking whether another court hearing in Xiang’s case is planned anytime soon. No answer was received.
In a related matter, a raid on an illegal marijuana farm in Garvin County in 2021 revealed a “ghost” owner and culminated in a multicounty grand jury indictment lodged against both Jones and Brown, who were named in 22 felony charges filed in Garvin County against them June 16 by Attorney General John O’Connor. They are accused of facilitating illegal medical marijuana operations.
Logan Michael Jones, 56, and Eric Brandon Brown, 41, are each charged with one count of conspiracy to cultivate a controlled dangerous substance (marijuana), six counts of filing a false or forged instruments for official recording, three counts of cultivation of a controlled dangerous substance (marijuana), and one count of pattern of criminal offenses.
Brown’s attorney said the two men are no longer partners.