High Profile Developer Backs Medical Marijuana Operation
Panhandle developer Jay Odom is bankrolling a Northeast Florida operation licensed by health officials to grow, process and distribute non-euphoric marijuana products, a lawyer for Chestnut Hill Tree Farm confirmed Wednesday.
Odom was sentenced to six months in prison three years ago after pleading guilty in a 2007 scheme to funnel $23,000 in campaign contributions through employees or their family members to a presidential candidate.
Odom, who at one time was a major Republican fundraiser and a supporter of former presidential candidate Mike Huckabee, also played a prominent role in an airplane-hangar controversy that led to the exodus of former House Speaker Ray Sansom from the Legislature in 2009.
Questions about Chestnut Hill's financing arose during a hearing Wednesday involving Loop's Nursery and Greenhouses, a Jacksonville-based grower trying to get one of a handful of highly sought-after "dispensing organization" licenses awarded by state health officials. Those questions delved into Odom's financial wherewithal in backing Chestnut Hill.
Loop's lawyer Jon Moyle grilled state Office of Compassionate Use Director Christian Bax about notes Bax made last year when evaluating five applications for a license in the Northeast region.
Because Odom's name is not part of the public record, Administrative Law Judge R. Bruce McKibben asked Bax to refer to the Destin developer as "the man" during questioning by Moyle about Chestnut Hill's financials.
Bax said he was concerned about Chestnut Hill's ability to stay in business for at least two years --- something applicants were asked to prove --- if granted a dispensing organization license.
Bax, reading from his notes, said it appeared to him that "the man's net worth appears … to be inflated" at the time Bax evaluated Chestnut Hill's application.
"None of the man's" financial statements were audited or validated by third parties, Bax said, again reading from the notes he made when scoring the applications last year.
"The financial information of the man's personal financial statements is inconsistent with the company financials he provided," Bax read. "Without further explanation of the inconsistencies in company values, the man's net worth appears, from the provided documentation, to be inflated. Moreover, financial docs do not appear to show sufficient verification of liquidity to allow for a $5 million line of credit. Financials do not provide sufficient basis for organic funding of dispensing organization. Without line of credit, dispensing organization financing is highly questionable."
But John Lockwood, Chestnut Hill's lawyer, told The News Service of Florida on Wednesday that money is not an issue.
"Jay has more than enough capital to ensure that this deal is completed," Lockwood said in a telephone interview. "Money is of no concern to the operations of this business."
Odom is a lender for the grow operation, Lockwood said. It is unknown how much money Odom has lent the organization or how much he has pledged.
Odom also passed what is known as a "level 2" background screen, required by law for owners and managers of the dispensing organizations, Lockwood said.
Odom "may become an owner in the future," the lawyer said.
Under a 2014 law, the Department of Health in November awarded one dispensing-organization license in each of five regions of the state. While Bax gave Loop's the highest ranking of the five applicants seeking a license in the Northeast region, the panel's combined evaluations resulted in Chestnut Hill's license, Lockwood pointed out.
"This is something that's commonly done in competitive proceedings in state government. The bigger issue is, we're focused on moving toward fulfilling our obligations as a dispensing organization," he said. "We built a brand-new facility from the ground up and are currently cultivating cannabis pursuant to the statutory authorization."
A three-member review panel gave San Felasco Nurseries the highest overall score in the Northeast region, but health officials rejected the Gainesville-based grower's application because one of its owners or managers had failed the background screen. Chestnut Hill, which had come in second, ended up with the license instead.
The Department of Health this year awarded a second Northeast region license to San Felasco after an administrative law judge ruled that the state had wrongly rejected the grower's application.
Lawmakers first authorized the dispensing organization licenses in 2014, when they legalized cannabis that is low in euphoria-inducing tetrahydrocannabinol, or THC, and high in cannabadiol, or CBD, for patients with chronic muscle spasms or cancer. Parents of children with severe forms of epilepsy pushed for the law.
Many of the applications were highly redacted, leaving the public in the dark regarding critical information, such as ownership of the organizations, what types of products they want to sell or the financial fitness of the applicants. Some of the applications --- including San Felasco's --- are almost completely blacked out due to claims of "trade secret" exemptions.
Odom, whose name does not appear anywhere on the Chestnut Hill application that was made available to the public, drew widespread attention several years ago for his role in events that cost Sansom the House speakership.
Sansom was accused of slipping money into the 2007 state budget that was supposed to pay for an emergency operations center in Samson's Panhandle district. But prosecutors argued that the item was a thinly disguised effort to build a taxpayer-funded aircraft hangar for Odom.
Leon County prosecutor Willie Meggs agreed to drop a criminal case in 2011 after being assured that Sansom and Odom would pay $206,000 to help reimburse the state for design costs of the project. Odom, a political contributor to Sansom, paid the money.