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Wednesday, May 25, 2022

Company challenges marijuana proceeds confiscation in Kansas

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WICHITA, Kansas (AP) – A cash management company has asked a federal court to return nearly $166,000 in proceeds forfeited in Kansas from sales at medical marijuana stores in Missouri.

Dickinson County sheriffs seized the money in May after stopping a driver for Empyreal Logistics while it was transporting proceeds to Colorado. Medical marijuana is legal in Missouri and Colorado, which also allow recreational use. Marijuana use is illegal in Kansas.

Federal prosecutors say the money is at risk of forfeiture because it violates a federal law that prohibits the manufacture and distribution of drugs. The US Attorney’s office in Kansas has filed a civil forfeiture lawsuit in federal court seeking forfeiture of the funds.

A federal judge ruled last month that there was a probable cause for the confiscation of the money in Dickinson County because it was the product of illegal drug sales. A hearing is scheduled for January 4.

According to federal court filings, Imperial says the money was obtained through legal transactions.

A driver for Empyreal was stopped for a traffic violation in Dickinson County May 17 on Interstate 70 near Abilene. The driver, who has not been charged, told the lawmaker she was going to Kansas City, Missouri, to collect money from medical marijuana dispensaries, according to court records.

While in Kansas City, the driver was watched by agents of the Federal Drug Enforcement Agency as she entered several dispensaries, according to court records. On her way back to Denver, she was again stopped by the deputy sheriff of Dickinson County, Kansas, for an undisclosed reason.

In a federal affidavit, DEA Special Agent Bryson Wheeler wrote that approximately $165,620 was seized after a drug-sniffing dog reacted to the smell of marijuana on cash, Topeka Capital Journal mentioned.

Jean Douglas, an attorney with Denver-based Cantafio Nagel & Song, which represents the marijuana business, said the federal case is puzzling because it involves forfeiting the proceeds of legal marijuana transactions, rather than seizing the drug itself, mentioned.

“So you are prohibiting the transfer of legitimate money obtained in one state — and we are not talking about products here but the results of a legal, reportable, taxable transaction being seized by another state,” Douglas said.

Danielle Thomas, a spokeswoman for the US Attorney’s Office in Kansas, said the office does not comment on the pending lawsuit.

Imperial argued in a lawsuit that the federal government’s demands for money should be dismissed.

“There is no evidence that the currency placed was or was supposed to be offered in exchange for an illegal controlled substance in violation of the Controlled Substances Act. The company’s attorney argued…the said currency is derived from legal activity.”

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