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Thursday, February 29, 2024
Courthouse News Service
Thursday, February 29, 2024 | Back issues
Courthouse News Service Courthouse News Service

Medical Marijuana Mogul Gets Eight Years

SAN DIEGO (CN) - A San Diegan was sentenced Thursday to eight years in prison for creating two medical marijuana dispensaries as a front for a multimillion-dollar drug dealing operation, the U.S. attorney said.

Joshua John Hester pleaded guilty a year ago to eight felony charges, including conspiring to distribute more than a ton of marijuana and conspiring to launder money, the U.S. Attorney's Office said in a statement announcing his sentencing.

He was sentenced to 100 months in federal prison and sent straight to jail.

Hester, 31, admitted in his plea agreement that he made millions of dollars from retail sales of pot at two dispensaries in which he was the silent owner, the Downtown Kush Lounge in San Diego and the Green Kross Collective in Mission Beach.

The investigation was the first time federal officials used wiretaps to investigate marijuana dispensaries, the U.S. Attorney's Office said.

Federal officials and several states are engaged in a long-drawn battle over medical marijuana, which is legal in 18 states and the District of Columbia. Though some states allow it to treat pain for cancer patients, glaucoma and other diseases and symptoms, the federal government prosecutes it under federal laws.

The D.C. Circuit just upheld a Drug Enforcement Administration ruling against medical marijuana, finding that there is "no currently accepted medical use for marijuana in the United States."

The U.S. Attorney's Office in San Diego said Thursday that since October 2011, it and the DEA have issued cease-and-desist letters to "253 marijuana dispensaries operating in the district. There has been a 95 percent self-closure rate in response to the letters, with less than 12 dispensaries remaining open."

Prosecutors insisted that Hester was not operating real medical marijuana dispensaries.

"Joshua Hester is the poster boy for the types of marijuana dispensary operations that the federal government is criminally targeting," U.S. Attorney Laura Duffy said in the statement. "He wasn't overseeing a nonprofit collective that served sick people. He was a convicted drug trafficker making millions of dollars selling high-quality marijuana to recreational users and exploiting state laws that were meant to help the seriously ill."

President Obama said recently that prosecuting medical marijuana users would not be a major concern of his administration. Hester, apparently, went to extraordinary lengths to conceal his part in the pot stores.

He owned 37 acres on Palomar Mountain, "but placed the property in another name to conceal his ownership," the U.S. Attorney's Officer said. "And he acknowledged that he intended to grow marijuana at that location. As part of his plea agreement, Hester agreed to forfeit over $575,000 in assets, including cash, vehicles, and jewelry."

The Green Kross Collective had 1,732 members, and the Downtown Kush Lounge had 811, prosecutors said.

They added: "In a related development, the court on January 14, 2013, ordered Hester's realtor on the Rancho Santa Fe and Palomar Mountain properties, Marco Luis, to pay restitution in the amounts of $329,767 to CitiGroup and $615,935 to JP Morgan. Luis pleaded guilty in August to money laundering charges in connection with those properties and was sentenced to 48 months in prison."

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