Green Thumb Industries, a cannabis cultivator and dispenser in the Chicago area, is reportedly currently under federal investigation, following accusations that the company is guilty of pay-to-play violations during the time of COVID licensing.
The investigation, originally reported by The Chicago Tribune, is looking into campaign donations, as well as other means that the company used to secure licenses in Illinois and some other legal, cannabis-allowing states. As of yet, no charges have been filed, and the investigation is ongoing. Green Thumb Industries denied knowing about the investigation when questioned by The Chicago Tribune.
“Green Thumb takes compliance very seriously and operates with the highest standards of ethical business conduct,” said spokeswoman Linda Marsicano in a statement. “We are not aware of any such investigation.”
This case is the first federal inquiry into a Chicago-based cannabis company since the scramble for licenses and legal cannabis infrastructure began. Illinois is one of the states that has come under fire for the way they have handled the newly legal industry. Critics claim that the wealthy and those least impacted by the war on drugs are still the ones profiting under the legal system.
Supposed Allegations Still Unclear
Also known as GTI, Green Thumb Industries was one of the first cannabis businesses to get a recreational license in Illinois. When the recreational cannabis sales bill passed in 2019, GTI and the other companies who had an early in got a major step up on the competition. Thanks in part to this head start, the company has now brought in half a billion dollars in total revenue as of last year, and is worth a total of $5 billion in the market capitol.
The company is now responsible for a number of different grows, as well as 56 retail stores across 15 different, legal states. The bulk of those stores, nine in total, are in Illinois. The brand also produces its own product offerings, including prerolls, cannabis gummies, oils, and other materials for vaping and legally consuming.
As of now, what GTI is being accused of is still up in the air. It is not clear if it is coming under scrutiny for political giving, hiring, or something else, but there is reportedly a federal investigation targeting the company. Records reveal that GTI has been known to spread cash to a number of politicians and political action committees who helped to legalize, as many businesses do, but it’s unclear if that is what the business is under fire for.
It also isn’t clear if the company’s profitability is under fire, but GTI certainly is profitable. Their revenue doubled since 2020 as of earlier this month, and they are projecting even bigger numbers for the rest of 2021. Nevertheless, shares for the company have dropped 13% following The Tribune’s article.
Another scandal that plagued the company in the past was a controversy back in 2017, when a former business associate sued GTI claiming that some ideas had been stolen, including the name, following a handshake deal offering the plaintiff a head grower position and future profit earnings. However, there is no current proof to link this suit to the current federal one.
While it remains to be seen how this will play out, GTI remains hopeful about its future, and the future of cannabis.
“The outlook for U.S. cannabis remains strong and we are pleased to be riding the wave,” Ben Kovler, GTI’s founder and CEO, said in an earnings call with investors.
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