MIRS News: Inside the push to legalize pot, funding question

Inside The Push To Legalize Pot, Funding Questions Fly

The Michigan Cannabis Coalition is gathering thousands of petition signatures across the state to legalize marijuana. But long-time marijuana activists say they aren't sure who's spearheading the campaign.

Meanwhile, many of those activists are supporting another ballot proposal push, MI Legalize. That campaign's supporters describe their ballot committee as the more transparent option. But their committee just received a letter from the Secretary of State's Office, questioning $2,530 in anonymous contributions.

These are just two examples of the financial questions swarming this summer around the multi-tier effort to legalize marijuana in 2016. Currently, two groups are working to gather signatures for ballot proposals on the subject, and each one is facing at least some level of questions about its campaign finances and who stands to benefit financially if the campaign were successful.

The group that has raised the most money so far is the Michigan Cannabis Coalition, which formed a nonprofit organization in May and a ballot committee in March.

A handful of long-time marijuana legalization activists said in the last weeks that they aren't certain who's funding the proposal, which turns many aspects of the ultimate policy over to the Legislature to decide.

"All I can do is speculate," said Tim BECK, who's led marijuana-related campaigns in cities across the state. "I really don't know."

The Michigan Cannabis Coalition's public face is the firm, Revsix Data Systems, which does campaign data work out of Oakland County.

While firms like Revsix are usually paid by campaigns, Revsix itself has contributed $252,000 of the $273,225 the campaign has raised.

The firm's two co-founders, Dennis DARNOI and Matt MARSDEN, have given another $21,065.

The high percentage of dollars coming from the firm and its employees have led supporters of MI Legalize to allege that there are other yet-to-be-revealed forces working behind the proposal.

"How could his company put up $252,000 for this?" said Chuck REAM, who's helping with the MI Legalize effort.

Michael KOMORN, an attorney who specializes in medical marijuana law, labeled the Michigan Cannabis Coalition "puzzling" in a recent interview. And Beck said he has "absolutely" no idea who's behind that ballot committee.

In an interview, Marsden, who is the spokesperson for the Michigan Cannabis Coalition, said the allegations from the proposal's opponents are "laughable."

"Everything in our campaign finance report is very straightforward," Marsden said.

On the question of the fact that Revsix has donated the wide majority of the money so far, Marsden said in the next campaign finance report, there will be more donors listed. Some checks have already come in and are yet to be cashed, he said.

Others have questioned why the Michigan Cannabis Coalition hasn't reported any payment to Marsden, who's been doing interviews on the campaign's behalf. But Marsden said today that he's been working as volunteer.

Marsden added that Revsix is backing the proposal because it supports the coalition's ideas and believes the campaign will be successful. There's also the fact that the firm is going to obtain valuable information through the statewide petition collection process. The data could help the firm with future campaigns.

Asked who the people are behind the Michigan Cannabis Coalition, Marsden said they are people from agricultural backgrounds, real estate backgrounds and business backgrounds.

One of the individuals who will likely appear on a future Michigan Cannabis Coalition campaign finance report is Matthew HERMAN, a Grand Rapids attorney who works mostly on medical marijuana cases.

Herman is also known for spearheading a secure marijuana facility in Grand Rapids, known as the "Fort Knox of Pot." Herman, who said he sent a check to the Cannabis Coalition a "while ago" that hasn't been reported yet, said the coalition is organized by "industry leaders."

It's not the grassroots, he said. It's people both in the state and outside the state. The coalition, he said, has also been working with banking leaders.

In an interview with The Grand Rapids Business Journal in June, Herman described the coalition as "of investors who want to 'steer the legislation in a responsible and focused way.'" He identified himself as one of the investors.

From his company's perspective, Herman said the Michigan Cannabis Coalition establishes the safest, most reliable policy system going forward.

"The problem you have with the Michigan Medical Marijuana Act, I assume you're going to have with MI Legalize and their petition," Herman said. "It's a voter drafted thing . . . And there's not really any room in there for change."

The argument is that the Michigan Cannabis Coalition's proposal would allow the Legislature a better ability to make changes to the system going forward rather than the MI Legalize proposal, which is more specific and would limit the Legislature's ability to make changes that could be needed.

MI Legalize supporters say they prefer the specifics in their proposal, and they question what the Legislature will ultimately come up with and what interest groups that system would benefit.

MI Legalize supporters like the fact that the voters would get to put the final law in place.

Jim CURRAN, a lobbyist for Karoub Associates, has provided some behind-the-scenes help to the Michigan Cannabis Coalition. He argued that the Cannabis Coalition proposal is also preferable because it dedicates additional tax revenue to public safety.

Curran said the MI Legalize proposal, which would allow individuals to grow up to 12 plants on their own, wouldn't produce the revenue for the state the coalition's proposal would.

"What is the taxable event?" he said of the MI Legalize proposal. "I don't think people are going to write the Department of Treasury a check for each plant they grow at home."

As for the people behind the Michigan Cannabis Coalition proposal, Curran said the public will ultimately know who contributes to the campaign through future campaign finance reports.

"I think Revsix is fully within the law to put whatever resources that they want to," he added of the firm's large contribution.

The political data that Revsix will garner from the campaign, Curran said, will be valuable from a marketing standpoint.

Curran, who was identified as someone helping with the coalition, said he has no official role with the campaign.

On the other side of the matter, supporters of MI Legalize say the Cannabis Coalition turns too much power over to Lansing.

"So who really makes the money?" Ream asked, referencing the uncertainty of what the lawmakers would put in place.

There's also a fear that the coalition will get the needed petition signatures first and then the Legislature would approve the proposal without sending it to the ballot. That way the Legislature could have more say in the final law and the MI Legalize proposal could be rendered useless.

Some of the so-called "grassroots" activists within the MI Legalize have even alleged that former Senate Majority Leader Randy RICHARDVILLE is somehow involved in the coalition effort. Marsden previously worked under Richardville in the Senate.

In a recent interview, Richardville said he is not directly involved in the coalition's campaign.

"I may be involved with the issue," Richardville said of the overall policy matter. "But I haven't decided yet."

"If this is something that we're going to go forward with, I have concerns that we do it the right way," Richardville added.

MI Legalize has reported $173,762 in fundraising so far from for more than 200 individual contributions.

The Secretary of State's Office has already flagged five anonymous donations in the batch and a lack of required information on other contributions.

The campaign also turned its most recent campaign finance report, which was due at the end of last month, about a week after the original report was due.

Jamie LOWELL, who's on the board for MI Legalize, said there's no "great excuse" for why the report was turned in late.

"We ran into some unfortunate glitches in getting the information together," Lowell said.

MI Legalize describes itself as a "grassroots" campaign, and some sources have said that the "grassroots" aspect of the campaign have led to some problems in collecting the proper campaign finance information.

Asked about the Michigan Cannabis Coalition's finance reports, Lowell said, ""We run our campaign above board and just allow them to do whatever they feel that they need to do."