A husband and wife forced to shut down their Colorado medical marijuana facility for numerous violations in 2012 have resurfaced in Massachusetts, as the managers of three companies that won preliminary state approval in January to run medical marijuana dispensaries.
Diane and John J. Czarkowski, who call themselves pioneers in the medical marijuana industry in Colorado, founded one of the first marijuana dispensary and cultivation centers licensed in Boulder, in 2009. But three years later, their license to operate a marijuana facility was revoked by the city. Officials found a variety of violations, including that the company lied to obtain a construction permit to expand its operations and stored marijuana in unauthorized areas, according to city and state court records.
Now the Czarkowskis are listed as members of the executive management teams of companies planning to open dispensaries in Dennis, Haverhill, and Quincy.
Massachusetts Department of Public Health officials have said background checks were conducted on the executive management teams of all 16 companies that were approved in January for provisional licenses to open 20 dispensaries. But it is unclear whether the Colorado license revocation turned up.
“I can’t believe they wouldn’t find this,” said Lesley Rich, a real estate attorney and president of a group that unsuccessfully applied for a dispensary license in New Bedford. “You would think they would have done the research and vetted out the people who are applying.”
Asked to comment on the applications involving the Czarkowskis, David Kibbe, a health department spokesman, said: “Applicants that fail to meet the state’s standards will not get a license to operate a dispensary in Massachusetts. No license, provisional or final, has been issued.”
The Czarkowskis’ license troubles in Colorado are the latest in a series of problems turned up among applicants who have won preliminary approval for the state’s first medical marijuana licenses. The Globe and other news organizations have reported on questions about the qualifications of key staff of several other dispensaries and documented misstatements that firms made in applications about support from local officials. The health department has since acknowledged that it did not check the veracity of companies’ claims before designating them as provisionally licensed, but says it is doing so.
Questions also have been raised about possible conflicts of interest between the agency and some winning applicants.
The uproar prompted the Boston City Council to schedule a hearing Tuesday into questions raised about the two firms that won preliminary state approval for facilities in Boston.
John Czarkowski, in a telephone interview Monday, initially said that he and his wife had sold their marijuana company, Boulder Kind Care, before its cultivation license was revoked in March 2012.
“From 2009 to 2012, we were in good standing in the city and with the state,” Czarkowski said. “We were the golden children.”
But pressed on the issue, Czarkowski acknowledged that the couple did not sell the business until two months after the Boulder revocation notice. He said Boulder officials engaged in a “witch hunt” against them for an innocent mistake made by his business partner on a construction application.
Diane and John Czarkowski are on the executive management team of Ermont Inc., which won preliminary approval for a dispensary in Quincy. John Czarkowski is also on the executive management team of two other companies that received preliminary approval: William Noyes Webster Foundation in Dennis and Healthy Pharms Inc. in Haverhill.
Ermont, in its application for a dispensary license, described Boulder Kind Care as the “leading dispensary in Colorado” and “one of the most successful cultivation centers.” But there is no mention of the company’s license revocation in any of the three dispensary companies’ applications.
Four other companies that were not approved for provisional licenses listed Diane or John Czarkowski or their consulting firm Canna Advisors as part of management. They are Coastal Compassion Inc., which was denied its request to open a dispensary in New Bedford, but was invited by the state to reapply for a license in another county; and Baystate Compassion Center Inc., Patient Alliance Wellness Center, and Holistics Specialty Care Inc.
Baystate Compassion Center, which sought to open a dispensary in Springfield and listed Diane Czarkowski as operations manager, told city officials last December that her Colorado license to operate a dispensary and cultivation facility had “never been suspended, revoked, or terminated.”
“It was voluntarily withdrawn after the business was sold in 2012,” Baystate Compassion wrote in the letter seeking support from officials.
Attorney Michael S. Schneider, who represents Baystate Compassion, said the statements to the city were “blessed” by Diane Czarkowski and company executives had no reason to doubt her. “She reviewed and approved what was written. My clients did not intentionally deceive anyone.”
Rich, one of the unsuccessful applicants in New Bedford, said it appears the Czarkowskis, who listed Diane as a member of the executive team on some applications and John on others, “tried to play games” with state health department rules that forbid any one person or company to be involved in the management of more than three dispensaries.
In response, John Czarkowski said he believed they were following the state’s rules.
Rich, whose company is Apex Compassion & Wellness Center, said he intends to raise issues surrounding the Czarkowskis in a lawsuit he plans to file Tuesday in Suffolk Superior Court challenging the awarding of licenses.
Boulder city records indicate that a partner of John Czarkowski obtained a work permit to expand their cultivation facility by claiming that a local contractor had been hired to do the construction. When the contractor complained to the city that the company had never retained him and lied about his involvement in the project, city officials launched an investigation. John Czarkowski was present when Boulder building inspectors and police inspected the facility in early February 2012, citing numerous violations.
On March 2, 2012, Boulder officials notified Czarkowski’s company that the city was revoking its license for a variety of issues, including an apparent lie on its application for a construction permit.
They “did all these court machinations to try to overturn that action and have a court order the city to give the license back,” said Kathy Haddock, a senior assistant attorney for the city of Boulder. “Each court said no.”
City officials also wrote in a report that John Czarkowki’s business partner appeared to be under the influence of marijuana — with “dry mouth, white lips, coated tongue, and sunglasses that he would not take off” — while leading them on an inspection of the facility in Feb. 2012.
A Boulder district court judge rejected Boulder Kind Care’s claim that the city exceeded its authority by revoking the company’s license. In court filings, Czarkowski and his partner said Boulder Kind Care grossed $1.7 million in revenue in 2011 and employed 28 employees. The case ended in late May 2012 when Czarkwoski withdrew his appeal.
Diane Czarkowski fell deep into debt and filed for personal bankruptcy last year, according to federal bankruptcy court records.
She was allowed to walk away from $405,000 in debts, despite one creditor’s complaint that between December 2012 and January 2013 she charged luxury items, including flights, hotel stays, skiing, and clothing purchases at Nordstrom and Neiman Marcus, even though she knew she could not pay for them. Her last purchase was made on the day she attended credit counseling, according to the complaint.