Sweet Leaf dispensary owner Victor Diaz wants $5 million from Atlantic City after its top cannabis official, Kashawn “Kash” McKinley, demanded bribes.
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“We believe that Mr. Diaz was the victim of improper and illegal conduct by the city and its representatives,” Diaz’s attorney Kevin Starkey told BreakingAC. “Their actions interfered with his business, Sweet Leaf, and ultimately forced him to close the dispensary, causing substantial damages. We intend to pursue all available legal remedies to recover damages for our client.”
Since they were forced to close, it was especially burdensome for them. While Google does not list them as closed, the listed phone number was not answered.
A lawyer for Diaz has filed a tort claim with Atlantic City. Now Atlantic City has 6 months to resolve the issue before a formal lawsuit can be filed in court.
The dispensary’s name is spelled differently in different places. On Yelp it’s “Sweet Leaf’s”. However, the NJ Cannabis Regulatory Commission (NJCRC) approved a minor transfer of ownership in spring 2024 for “Sweet Leaves LLC” that resulted in Diaz owning 63.5 percent. On Google and Joint Commerce, it is “Sweet Leaf.”
Sweet Leaf was both a medical as well as an adult-use cannabis dispensary.
McKinley handled constituent services as well as cannabis policy as Atlantic City Cannabis Review Board Chair for Atlantic City Mayor Marty Small Jr.
Atlantic City Cannabis Corruption Tort Claim
The tort claim justifies the $5 million by saying “the foregoing amount includes lost business profits, loss of enterprise value, damage to goodwill, lost economic opportunities, reputational damages, emotional distress damages, attorneys’ fees where recoverable, consequential damages, and additional damages presently under investigation. Claimants reserve the right to amend this damage estimate as further information becomes available.”
The tort claim says, “Claimants contend that they were subjected to unlawful, arbitrary, discriminatory, retaliatory, coercive, and corrupt governmental conduct arising from the misuse of municipal authority and influence within Atlantic City’s cannabis regulatory process.”
“Claimants further contend that Atlantic City, its Cannabis Review Board, and responsible public officials and employees may have participated in, directed, authorized, approved, ratified, concealed, ignored, and/or failed to prevent unlawful conduct despite having the authority and responsibility to do so.”
Sweet Leaf Dispensary Tort Claim Versus Atlantic City
McKinley isn’t the only one in trouble. The claim also names as defendants the City of Atlantic City, Atlantic City Cannabis Review Board, and the Atlantic City Department of Licensing and Inspections.
Plus “Any department, board, agency, authority, office, committee, instrumentality, servant, employee, representative, consultant, or contractor of Atlantic City involved in cannabis licensing, permitting, inspections, fee assessments, fee collection, tax administration, compliance, enforcement, or related governmental functions” and “John Doe Public Entities 1-100.”
They specifically want to go after present and former members of the Atlantic City Cannabis Review Board.
Notably, “Claimants demand that Atlantic City immediately preserve all documents and electronically stored information relating to:”
- “Sweet Leaf’s Dispensary LLC;
- Victor Diaz;
- Cannabis Review Board proceedings;
- Cannabis licensing applications;
- Cannabis classifications;
- Cannabis fee assessments;
- Cannabis tax disputes;
- Emails;
- Text messages;
- Signal communications;
- WhatsApp communications;
- Telephone records;
- Financial records;
- Inspection reports;
- Meeting minutes;
- Audio recordings;
- Video recordings;
- Security footage;
- Metadata;
- Electronic devices utilized by individuals involved in cannabis licensing matters.”
The Atlantic City Council agenda for October 28th notes there is a claim for money that the city will pay, signed by the mayor, for “Victor Diaz and Sweet Leaf’s dispensary.”
Atlantic City Cannabis Corruption Allegations
McKinley was said by the US Attorney for New Jersey to have sought the bribe from them and threatened them.
Federal court documents describe McKinley demanding more than $20,000 in cash and cannabis in exchange for his assistance to a cannabis business owner.
McKinley also wanted Diaz to assault someone for him.
The US Attorney’s Office says McKinley received a bribe for his assistance in getting the cannabis business classified as a “micro” cannabis business instead of a standard cannabis business.
So, they only paid a $2,500 annual fee to renew their dispensary license with Atlantic City instead of the $25,000 annual fee required for standard cannabis businesses.
