Leaked internal document sparks questions over CA cannabis growers group’s finances, management

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California Growers Association marijuana, Leaked internal document sparks questions over CA cannabis growers group’s finances, management

A three-page document appearing to be an end-of-the-year 2018 status report from the California Growers Association (CGA) was posted Monday morning on popular Facebook page “California – City & County Regulation Watch.”

At face value, the report was inflammatory and suggested the marijuana growers’ organization was possibly in dire straits.

The document included allegations that former executive director Hezekiah Allen had refused to share information with the board of directors, had run up $267,000 in debt for CGA and that many expenses had “fallen outside of CalGrowers financial policies.”

Response to report

The document was quickly rejected by interim CGA chairman Nathan Whittington as “in no way an accurate representation of fact,” and Allen told Marijuana Business Daily that much of the information in the report was both out of date and inaccurate.

Whittington said the report was a “confidential internal document that was for our board of directors only,” and he lamented that it was leaked publicly without the proper context.

He said CGA is carrying a debt load heading into 2019, but that the actual debt is less than $80,000.

The document as released “doesn’t accurately reflect the state of (CGA), nor the state of our engagement with (Allen),” Whittington said.

He also called Allen “an amazing force in the industry.”

“Hezekiah stepped down in September, and at that point, we immediately started auditing the organization,” Whittington said. “By the end of October, we had come up with this debt number ($267,000), and between then and December, we started addressing that.”

Whittington said the high debt figure in the document was in part a tool to help drive engagement with the dozens of CGA board members and to help raise money.

“This document has a very heavy slant to it because I needed to light a fire under people. And it did its job,” Whittington said. “I was able to get the situation under control.

“We actually have a very reasonable plan that is carrying us forward right now and is going to prove fruitful through this year.”

Allen told MJBizDaily the document was written partially by Tawnie Logan, a former CGA board chair who has since resigned from the organization.

Logan, reached early Tuesday, responded that the letter was “drafted by, reviewed by and approved by the (CGA) executive committee” – of which there were five members at the time, she said – and was current as of six weeks ago, after she and others began auditing the organization in September.

“It took us three months to get to the point where we could see what was going on,” Logan said.

“It was kind of a dark perspective, and we knew we had to get this information out to our board. It was our fiscal duty to inform our board.”

Debt a ‘huge, uphill climb’

Logan said she knew that CGA board members began working to raise money to pay down the organization’s debt once they realized how deep in the red the group was.

But her impression was that only about $50,000-$70,000 had been raised toward paying down the $267,000.

“I’ve been trying to help through the entire process,” Logan said, “but they’ve got a huge, uphill climb to get past this financial deficit.”

Allen also said it was fairly typical for CGA to be operating in the red and continuously paying off debts while simultaneously raising money.

He also said one of the reasons for the debt was a commitment made in early 2018 for 45 CGA board members to raise $5,000 apiece for the organization, for a total of $225,000.

“Yes, I spent money we didn’t have,” Allen said. “That is absolutely true. I spent money based on a commitment from the board.

“My budget that I put before (the CGA board) … is almost to a ‘T’ what I spent.”

Allen stands by his management of CGA.

“I don’t think anything we did was irresponsible,” he said. “The organization’s programs were modest and bare bones, at best. There was never a CGA private jet or anything of that nature.”

Allen further noted that he’s still a member of CGA and has even been nominated to the board of directors. That nomination is still pending a vote of other board members.

Logan, no longer a CGA member, said she’s hopeful the group can right the ship.

She’s uncertain about the organization’s future, however, in large part because it now lacks not only funding but a full-time executive director.

“California needs (CGA), or an iteration thereof,” Logan said. “At the same time, the people who have been volunteering for the past five years to preserve that have been doing it out of pocket while struggling to survive with their small businesses.

“Without focus, and without people making that commitment of time and money to the organization, it’s a great mission without the engine.”

John Schroyer can be reached at johns@mjbizdaily.com