A Colorado logistics company is seeking the return of nearly $165,000 in cash seized by a Kansas sheriff’s department, arguing that the money is from legal marijuana sales and should not have been taken by law enforcement officers. The cash was seized from an employee of Empyreal Logistics during a traffic stop on May 18 in Dickinson County, Kansas after being collected by the employee from medical marijuana dispensaries in Missouri.
The U.S. Attorney’s office for Kansas filed a civil asset forfeiture case in the matter, claiming in court documents that the cash is subject to seizure because of alleged violations of federal laws against manufacturing and distributing drugs, according to media reports. The unidentified driver of the vehicle has not been charged with a crime, however.
Drug Enforcement Administration Special Agent Bryson Wheeler wrote in an affidavit filed in the forfeiture case that the approximately $165,620 was seized from a Ford Transit van owned by Denver-based Empyreal Logistics by Dickinson County Sheriff’s Deputy Kalen Robison during a traffic stop along I-70. Robison had also pulled the van over the day before for a minor traffic violation.
During the first traffic stop, the driver told the deputy that she was collecting money from cannabis dispensaries in Kansas City, Missouri, and transporting the cash through Kansas to a credit union in Colorado. Missouri legalized medical marijuana in 2018 through a voter-approved constitutional amendment, but Kansas is one of the few remaining states that have no provisions for legal cannabis.
The driver was released and put under surveillance by DEA agents, who observed her “stopping at and entering multiple state marijuana dispensaries” in Missouri. The day after the initial traffic stop, Robison pulled the van over again along the interstate. The reason for the second traffic stop is not included in the affidavit, according to the Topeka Capital-Journal.
During the traffic stop on May 18, law enforcement officers seized five bags of cash, which the driver claimed were from cannabis dispensaries in Missouri. A police canine unit later “alerted to the odor of marijuana coming from the currency,” the DEA agent wrote, and “marijuana is a controlled substance and illegal under both federal and Kansas state law.”
Attorneys for Empyreal Logistics argued in court documents that the seized cash should be returned to the company, disputing claims from federal prosecutors that the money was related to drug trafficking and subject to forfeiture.
“Plaintiff’s claims should be barred as the conduct which generated the Defendant property was lawful under Missouri state law and tacitly or affirmatively allowed by the action of the United States Federal Government,” the company’s lawyers wrote.
Perils of a Cash-Based Industry
The Empyreal case illustrates the difficulties faced by state-legal cannabis businesses, which are forced to operate mainly in cash because of federal drug and money-laundering laws. On its website, the firm promises to address the challenges of operating in a cash-only industry with solutions including “low-profile, eco-conscious, armored vehicles.”
“With our state-of-the-art facilities, secure currency processing, and management services, we safely and securely manage the cash assets of hundreds of enterprises across multiple industries so they can concentrate on managing their operations,” the company wrote in a press release unrelated to the asset forfeiture case. “Empyreal uses data and intelligence tools to help maximize our cash solution, with the goal of changing the way clients think of secured transport.”
Arshad Lasi, the CEO of cannabis dispensary operator the Nirvana Group, says that many of the cash-handling issues faced by the cannabis industry could be solved with passage of the SAFE Banking Act, legislation that would allow financial institutions to provide traditional banking services to state-legal marijuana businesses. Provisions of the bill were included in a military spending bill passed by the House of Representatives in September, but the Senate has not yet approved the legislation.
“Providing licensed cannabis businesses with the opportunity to bank in a traditional manner and not be limited to dealing in cash is crucial,” Lasi wrote in an email. “Banking allows companies to remain compliant, helps them avoid liabilities, among other benefits including safety and security.”
“I’m hopeful that the SAFE Banking Act will pass in the Senate, as its passage will also boost the cannabis industry’s reputation as a legitimate and major player in states’ economies,” Lasi added.
Lex Corwin, founder and CEO of California cannabis cultivator Stone Road, said that forcing legal cannabis companies to operate on a cash-only basis is “ridiculous and harmful” and called on lawmakers to pass the legislation.
“The SAFE Banking Act would give an already legal industry the legitimacy it needs and that it’s honestly due, especially since the government has no issues collecting said cannabis businesses’ money in cash,” Corwin told High Times. “Cash dealings are also a huge liability and personal safety issue––the biggest instances of injury and death are around cash pickups and dropoffs, ultimately putting people trying to play within the legal system in harm’s way.”
U.S. Magistrate Judge Kenneth Gale has set a scheduling hearing in the Empyreal asset forfeiture case for January 4. The DEA national public affairs office and a spokesperson for the U.S. Attorney’s Office for Kansas declined to comment on the case to local media, citing the pending litigation.