Cannabis Chronicles BlogFeaturedThe Columbian / Associated Press

Owner arrested in raid of Vancouver pot business

Under the blazing sun, uniformed and plain-clothed officers spent several hours Thursday carting off marijuana plants, money and equipment to grow the drug from a business on St. Johns Boulevard in Vancouver.

The scene may look like a mistake — the business, Grow Systems Northwest, deals with marijuana, a legal commodity in Washington state.

But while it may appear legitimate, law enforcement says it isn’t licensed as a retailer and it doesn’t operate within the confines of state medical marijuana laws. So, police say, the business is making illegal broad-daylight drug deals to the tune of at least $200,000 untaxed dollars a month.

The owner of the business, who said he was “embracing” a loophole but not breaking the law, was taken into custody on suspicion of multiple felonies.

An illegal business, police say

Grow Systems Northwest, 6502 N.E. St. Johns Road, fell under the eye of the Clark-Vancouver Regional Drug Task Force in mid-April when a Vancouver police officer responded to the business for a report of a stolen recreational vehicle.

The owner, Adam Alexander, gave the officer a tour, said Vancouver police Sgt. Pat Moore, the lead drug detective on the case. Alexander told the officer that he was selling marijuana from his house but that his business became too big so he moved it to the space on St. Johns Boulevard, Moore said.

The officer alerted the Clark-Vancouver Drug Task Force, and Moore began looking into it.

On its website, the company says it offers medical marijuana delivery and marijuana delivery. “We have been serving the Clark County area for many years now and would love to have you as one of our regulars!” the website reads.

A few weeks after Moore started the investigation, another Vancouver police officer was dispatched to Grow Systems Northwest for what was reported as a drug deal.

When the officer responded, the manager of the business told the officer that the business is a marijuana consultant business that provides advice to people trying to grow weed, Moore said. Marijuana is then given to customers on a donation basis.

The officer then contacted Alexander, Moore said.

“Alexander explained the business as a medical marijuana facility that donates marijuana to clients,” Moore said of the officer’s report. His employees, Alexander told the officer, are also “caregivers” who deliver marijuana.

“Nothing he’s doing here is legal,” Moore said.

Under the medical marijuana act, Moore said, patients are allowed to grow marijuana but are only allowed to have a 60-day supply for personal use. Patients cannot give away, distribute or sell marijuana under any circumstances, Moore said.

Caregivers, he said, are defined by state law as those who assist the patient with medical marijuana. But caregivers can only have one patient at a time, Moore said.

A collective garden, designed to provide marijuana to multiple patients, has a limit of 45 plants and can be used by no more than 10 patients, according to Washington law.

And the business doesn’t have a license to sell recreational marijuana, nor has it ever applied for a license, said Brian Smith, spokesman for Washington State Liquor Control Board.

So the operation that Alexander is running, law enforcement said, doesn’t comply with recreational or medical marijuana state laws.

“Some aspects of marijuana are legal, but it’s not just legal across the board,” said Cmdr. John Horch, who heads the drug task force. “This individual seems to be taking advantage of the law that was passed and operating without a license and selling it to anybody and also avoiding the taxes. It’s not fair to the dispensaries that went about it the right way.”

Going undercover

“What do you have on tap today?” Moore asked from the driver’s seat of his idling vehicle.

Grow Systems Northwest has a drive-through stand behind its one-story office building on the corner of St. Johns Boulevard and Northeast 65th Street. Vehicles enter the lot from 65th Street, drive behind a row of tall arborvitae to a coffee-stand style kiosk where they put in their order.

The recent undercover drug buy, accompanied by a reporter, was one of 14 that the drug task force performed at the business.

A young woman wearing a tank top and jean shorts cheerfully lists off a handful of marijuana strains.

“Ooh, Dark Star,” Moore said. “I’ll take 10 minutes of that.”

Leafing through a wad of cash, Moore pulls out five $20 bills and hands them to the employee.

The business typically accepts $10 donations for one minute of consultation time, Moore explained. But, he said, one minute translates to 1 gram of marijuana.

After a few minutes of waiting — wherein Moore was not provided any tips about growing marijuana nor asked to show his medical marijuana card — Moore was handed a small white paper bag with the company’s logo printed on the outside. Inside was 10 grams of packaged marijuana.

The label on the package says: “Providing Washington State with a Professional Consultation on Cannabis; WA State Medical Use of Cannabis Act of 1998.”

But, Moore said, calling it a donation doesn’t make it legal.

“It’s a play on words is what it is,” Moore said.

Accused of money laundering

During two different undercover buys, employees openly said that the company sees 100 to 200 customers and can make up to $10,000 in a day, Moore said.

While Alexander is paying his employees and paying taxes associated with running a business, the money he’s bringing in isn’t being subjected to the 25 percent excise taxes on wholesale and retail sales of marijuana, Moore said.

Grow Systems Northwest even posted on its Facebook page a photo of dollar bills inside a dryer. The caption reads: “Money Laundering … LOL.”

“This has just been so blatant,” Moore said. “He thinks he’s above the law.”

In one six-day span, Moore said, more than 950 cars went in and out of the drive-through area.

Customers of Grow Systems Northwest, Moore explained, likely believe the business is a legitimate one. It has a website — growsystemsnw.com — and a Facebook page.

The company registered its name with the state in November 2013 and obtained a general business license with the state on April 7 of this year.

But they have never applied for a license to sell recreational marijuana, Smith said. If they did, he added, they wouldn’t qualify because the law does clearly states that it does not allow drive-through service.

After developing probable cause, the drug task force planned to bust the business and Alexander.

“(Marijuana) is controversial, but you still have to do it legally,” Moore said. “We need to send a message to everybody else that if you do this, we’re going to come after you.”

Search warrants

On Thursday morning, officers and deputies served search warrants at three places: Grow Systems Northwest; Alexander’s house, where detectives believed he has a marijuana grow; and his father’s house next door, where they believed Alexander had a second grow.

Searching the houses, they found grows that had about 12 plants each along with more than $15,000 in cash hidden throughout the house.

At the business, officers seized numerous marijuana plants, more than 10 pounds of processed marijuana and documents such as ledgers and receipts.

Detectives interviewed Alexander at his business, and he defended what he was doing, comparing his business to that of a wine consultant.

Customers come to his Grow Systems Northwest seeking advice such as what kind of marijuana to smoke or they ask questions about how to grow marijuana, Alexander said. Then, after getting their consultation, the customers are given marijuana, he said.

While talking to detectives, Alexander was knowledgeable about the laws and told detectives that he was not breaking the law.

“Granted, I’m walking a fine line,” he said. “I really was embracing this loophole.”

Though Alexander argued with detectives for more than an hour, he walked away in handcuffs. Alexander was arrested on suspicion of three counts of manufacturing marijuana, possession of marijuana with intent to delivery, 14 counts of delivery of marijuana and several counts of money laundering.

- Emily Gillespie