Prosecutors Push Prison for Michigan Marijuana Businessman in Bribe Case

John Dawood Dalaly pleaded guilty to the bribery charges.

This story was republished with permission from Crain’s Detroit and written by David Eggert.

A Detroit-area businessman who bribed a top state marijuana regulator in exchange for the approval of dispensary licenses should serve 30 to 37 months in prison, federal prosecutors said Thursday.

The U.S. Attorney’s Office for the Western District of Michigan made the recommendation to Judge Jane Beckering, who will sentence John Dawood Dalaly on Sept. 14. In a filing, the government credited him for complying with the cooperation provision of his plea agreement and said he should receive a two-level departure from the offense level portion of his sentencing guidelines calculation.

The 71-year-old West Bloomfield Township resident in April admitted to paying the state’s now-former medical marijuana licensing board chair Rick Johnson roughly $68,000 in cash and benefits, including two private jet flights to Canada, to help PharmaCo Inc. obtain regulatory approvals. Dalaly agreed to cooperate in an investigation that has resulted in three others — Johnson and two lobbyists — also pleading guilty as part of deals.

Prosecutors wrote that Dalaly, who co-founded “Company A” – which his lawyer has said is PharmaCo – and “Company B,” a marijuana payments venture, implicated others in the bribery scheme and provided details previously unknown to the government.

“Although other witnesses previously admitted bribing Johnson on behalf of Company C, Dalaly provided a first-hand account of the bribe payments from Company A and Company B to Johnson before Johnson admitted to law enforcement that those payments were bribes,” they said. “Bank records showed the bribes were paid to a Johnson entity, JBJ Ranch, LLC, ostensibly for ‘accounting work’ performed by Johnson’s wife. Dalaly’s admission that the payments were bribes was important evidence to help establish Johnson’s criminal intent.”

The prosecutors also said they learned for the first time from Dalaly that Johnson, a former state House speaker, provided Company A with inside information about marijuana license applicants that would not be approved by the board.

“This information could be of use to Company A, which could leverage the information to purchase dispensaries from the failed applicants,” the filing states.

Toronto-based Red White & Bloom Brands bought Southfield-based PharmaCo in 2022 after having provided financing to the company since late 2018 through an RWB subsidiary, Michicann Medical Inc. RWB was transferred 21 medical and adult-use licenses, including for dispensaries and grow operations.

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