Today, Explained - After the Green Rush

Episode Date: August 18, 2023

Adelanto, California, was broke. Could legalizing marijuana cultivation offer a fix? Reporter David Weinberg’s podcast Dreamtown details how the path to salvation was marred by scandal, debt, and corruption. This episode was produced by Avishay Artsy, edited by Matt Collette, fact-checked by Serena Solin, engineered by Patrick Boyd and Cristian Ayala, and hosted by Noel King. Transcript at vox.com/todayexplained Support Today, Explained by making a financial contribution to Vox! bit.ly/givepodcasts Learn more about your ad choices. Visit podcastchoices.com/adchoices

On Today Explained this year, we've reported on a bunch of cities that have been trying to get back on track economically. Like New York City, with all those post-pandemic empty office buildings. It's Wednesday, it's the middle of the week, and I just want to know, can you hear the sound of the office? Let me listen. I hear dead silence. Or Tulsa, Oklahoma, paying work from homers $10,000 to move there. It's so much more than 10 grand. Like, the access and the community that you get through being an active member of Tulsa

absolutely can be life-changing. Today, we have the story of Adelanto, California, the town that tried to turn its failing fortunes around by cultivating a weed economy. Everybody was against us, you know, but it was like Atalanta against the world. And we took them on and now we're winning. That's coming up. Bet MGM, authorized gaming partner of the NBA, has your back all season long. From tip-off to the final buzzer, you're always taken care of with a sportsbook born in Vegas.

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It's Today Explained. I'm Noelle King. Today's episode comes to us from David Weinberg. David is a journalist based in Los Angeles, and he's host of a podcast called Dreamtown. So for quite a while, I've been reporting on the city of Adelanto, which is a small town in the Mojave Desert, about an hour and a half northeast of Los Angeles. If you've ever heard of Adelanto, it's probably because the state's largest immigration detention facility is there. The city of Adelanto contracts with a private company called the GEO Group

to run it for Homeland Security's Immigration and Customs Enforcement. They've had a lot of issues with prisoner safety, some inmate deaths there and things like that. And so that facility tends to get a lot of media attention. There's also another prison in town. And then there's a third prison just on the outskirts of town. And for a long time, the prisons were the largest employer in the city. Atalanta is sort of like the underdog of the high desert.

It's surrounded by all these other cities, Apple Valley, Hesperia, Victorville. They're places where a lot of people who get priced out of LA and other parts of Southern California move for more affordable housing. And they've been kind of booming for a long time. And that is not true of Atalanto. One issue that I've always had with Atalanto

is we've watched the cities around us grow and develop and prosper. And so watching the cities around us grow and develop and prosper. And so watching the cities around us, Apple Valley, Hesperia, bloom, blossom, freaking blow up. And Atalanto is still the same. There's a quote from the former mayor, Kerry Thomas, who said, you can't buy a pair of shoes in Atalanto. There's no movie theater. There's no rec center. There's not much of anything. There's like a highway that goes through the middle of town. There's a shopping center with one grocery store.

And that's about it. You know, we can count, in the time I've been here, I can count four developments that have happened. That's the Sater Brothers Shopping Center. We got the Family Dollar General and the Cactus Shopping Center. That's it. So why is everybody else blowing up, but we're not? All right. So you started reporting on Adelanto in 2017. What had the city been dealing with in the years before that? They had recently laid off about a quarter of the city staff. They had a huge budget deficit. They were making steps to file for bankruptcy. And a lot of ways I thought of

them as like someone who's like pawning things to stay afloat. And there was talk of just dissolving the town entirely and just closing city hall, firing everyone and just letting it get absorbed into San Bernardino County. And it was at that moment that this guy who went by the name Bug showed up and ran for city council. And he had this sort of wild idea to make Adelanto one of the first cities in California to legalize commercial weed cultivation. When it came to my turn to speak, I just let him have it. I said, these things, you guys are failing. I said, I think it you guys are failing. I said, I think it's time

to talk about marijuana. Oh my God. I was in the school, the high school, you know, and all the teachers were there going, oh no,

not that. I got beat up real bad by the press. No city in Southern California had ever done that, made it legal to grow weed. He was sort of

an enigmatic character. He's sort of like a right-wing hippie, I guess is how I would describe him. He was a roadie for Van Halen at one point and managed rock bands and lived in a van and then moved to the high desert. And the high desert, I should say, is a very conservative place politically. And he just seemed kind of like an outlier in that way, except for the fact that he became a member of the High Desert Tea Party.

And a lot of his values did align with conservatives. He was very pro-gun. You know, he bragged to me about going grocery shopping with like a firearm on his hip, and he would like direct traffic with a rifle on his back and things like that. I stand up for what's right. My Second Amendment rights are very important.

Without the Second Amendment, believe me, you don't have any other rights. And I was intrigued by just him as a character, but I was also very curious why a place like Adelanto would be on the forefront of legalizing marijuana cultivation. This was before California had legalized recreational weed. Okay, so the area is pretty conservative. It doesn't sound like anybody has really been thinking, yeah, we should get into cultivating weed.

What actually changed? Was this guy Bug, was he just incredibly convincing? Like, how did this happen? So he ran for city council on this platform, and he got elected. He won by 24 votes. I won by the senior vote. I thought I was going to win by the younger vote.

I thought I was going to teach these kids how to go out and vote because they're voting for weed. And by golly, they still sat on their ass pretty much. So once he got elected, he was only one of a five-member council. And the other council members were not in favor of legalizing marijuana. So he had to convince them. And it wasn't just like his charm and his arguments

that led to these decisions being made. Part of it was that he had the backing of lobbyists and cannabis entrepreneurs. And so they came to his aid, and they did all sorts of things. The people from the industry that were knowledgeable came. They put on presentations. They brought a poor little girl

that was paralyzed or something and had real serious problems and on CBDs, doing much better. We brought in veterans that had limbs blown off, you know, in the war and all that. And we listened to them. We listened to the citizens. The mayor came on board

with Bugg's plan at the time, Sky Rich Kerr. And they kind of tapped into this idea that if they legalized marijuana, they could really stick it to these neighboring towns who had been prospering while Adelanto had not. And that argument persuaded the public

and the other city council members to join Bug. And a year after he got elected, they formally voted on an ordinance that legalized commercial cultivation in the city limits. Did it also legalize the sale within the city limits? No, and this was a key sticking point because other people on the council were very opposed to the idea of weed

being sold to citizens in the city. And so what Bug and Mayor Kerr at the time promised was that they would only be legalizing growing weed to be sold outside of the city. So basically these are pretty large companies that would have a giant warehouse, grow weed, and then sell it to dispensaries outside of Adelanto.

In fact, Adelanto didn't even allow dispensaries in the town at that time. What happens after we get legalization in Adelanto? Where do things move from there? Things got very crazy very quickly. The wheels are in motion. Ain't nobody getting in the way. You know, I don't care if you're the sheriff. I don't care if you're the governor. I don't care who you are. I mean, it was like the floodgates were open. You know, this was an opportunity that a lot of people were excited to take advantage of and people

with very deep pockets. And so what you had immediately was, literally, you had a line of people that showed up at city council to apply for permits to grow weed. And many of these people had briefcases full of cash. No, you wouldn't see very expensive sports cars and Rolls Royces and Bentleys driving down the street. None of that would have happened. If I would have never ran on this issue,

nothing would have ever changed in this city. All of a sudden, you just had people like Mike Tyson. You know, after I retired, I started smoking. And what a mistake that was. I should have smoked my whole career. I should have smoked when I was fighting. They had a Russian oligarch, Dmitry Bosov. They had a billionaire real estate developer named James Prevetti.

You had all these people who were very eager to do business in Atalanto. You had to walk through all of those dudes in the back of the room to get in or out of the city council chambers. And I was like, who are all these guys kind of lurking in the back of the room? Like, who are these dudes, man? Kind of had a mobby vibe to it. And that created a situation that was very ripe for a lot of ultimately corruption, which is what happened. What was our friend Bug doing at this point? Oh, Bug was so happy. He definitely got his 15 minutes of fame.

I'm going to be on primetime television in Paris, France. He was very happy to be telling everyone how he had saved the city of Adelanto, which was also his re-election pitch when he ran again for city council four years later, was basically like, I saved this town. Like, I brought weed to town. We're going to be rich. his big dream was that there was going to be a hooters in town there was going to be a bass pro shop but also that there would be all these services that the people in town had to go elsewhere to get so the city budget at the time was about 12 million dollars and they were expecting to bring about that same amount in just revenue from weed.

And so it was wild. People were just like giddy, and the mood in town was a dramatic shift from where it had been just a couple years ago when there was basically this talk of giving up as a town. Everybody was against us, you know, but it was like Atalanta against the world. And we took them on, and now we're winning. So you've got people showing up to City Hall with bags of cash. It is very evident that something special is happening in this town,

and a lot of people want to get in on it. When and how does the corruption that you mentioned start? At some point, the mayor of Atalanta came to the city manager, a guy named Gabriel Elliott, and they wanted to sell off one of the city buildings to a weed entrepreneur. And he asked the city manager to basically prepare this paperwork to sell this building for below market cost. And this did not smell right to Gabriel Elliott. He also suspected some bribes were being given to city council members in exchange

for fast-tracking weed permits and things like that. And so what we know is that shortly after that, the FBI started looking into what was going on in Adelanto. Around this same time, this very curious thing happened. There was this abandoned bar called The Jet Room in Adelanto that had been closed for a long time. And this personal injury attorney came to town and bought the building and told everyone that he was going to turn it into a law office. And this local reporter, Shea Johnson, he went down to City Hall and he asked to see

the planning documents. And they open up the plans and I see that this law office has these really elongated counters and it's got a safe room where you can lock stuff up and it's got overhead lighting. It looked a lot more

like it was going to be a marijuana dispensary, which didn't make any sense because at this time, it was illegal to have a dispensary in Abilanto. And so, you know, a lot of people started to suspect that some backroom dealings were happening. And then Shea found out that the real estate agent who brokered this deal was Bug.

He had basically sold this building. And he also would have been someone who would have had to vote on whether or not this building could become a dispensary and to vote on whether or not the city would allow dispensaries. And so there's this glaring conflict of interest that became clear. So all these things sort of just add up into like, none of this makes sense. and it looks really bad. You got a council member who brokers a real estate deal for a building that's purportedly to be a law office and then gets rezoned for marijuana.

And so it was almost like one little corruption thing popped up and then another, and then it was sort of like everywhere you looked, there seemed to be all these shady deals. After searching the Adelanto mayor's home for hours this morning, FBI agents walked out carrying boxes of potential evidence. Coming up, David's story continues with an informant,

some feds, and a sus case of amnesia. Support for Today Explained comes from Ramp. Ramp is the corporate card and spend management software designed to help you save time and put money back in your pocket. Ramp says they give finance teams unprecedented control and insight into company spend. With Ramp, you're able to issue cards to every employee with limits and restrictions and automate expense reporting so you can stop wasting time at the end of every month. And now you can get $250 when you join Ramp. You can go to ramp.com slash explained, ramp.com slash explained,

r-a-m-p.com slash explained, cards issued by Sutton Bank. Member FDIC. Terms and conditions apply. It's Today Explained. We're back with David Weinberg. In the first half of the episode, David was telling us about how the small city of Adelanto, California, tried to save itself by growing weed. They were inspired by a right-wing hippie-turned-city-councilman named Johnny Bug Woodard. But after a series of FBI raids, things had started to go badly. — This is one of the crazier parts of the story. So initially when Bug ran for office, one of the people who was most against his plan to bring weed to Adelanto was a former pastor named Jermaine Wright, who was a city council member at the time. He was morally opposed to weed.

He did not support Bug's plan. Well, I'm a retired pastor. So on the Christian side, I had a real hard time with the doctrine that I've gone through throughout my life. But he changed his mind. In part, I think he sort of read the room. He saw that public opinion was changing. He saw that basically his constituents were like, yeah, we want to get rich selling weed. And so, you know, as a politician, it's his job to represent those people's interest. And so he ultimately voted in favor for that to happen. But what we know now is that when the FBI came to town, they must have gotten a tip. Something led them to believe that Jermaine and offer him $10,000 in exchange for his vote to change the zoning on one of their properties, which was basically what had allegedly happened with the bribe. But then he turned to the informant, who he did not know was an informant, and said, look, why don't we make even more money by burning down my restaurant? And you can help

me burn down my restaurant, and we'll get an insurance payout. And so the FBI was basically like, yeah, that's a great idea. And so they basically sent in another undercover agent to pose as an electrician who Jermaine hired to help him burn down his restaurant. And then instead of burning it down, the Fed showed up and Jermaine basically confessed and agreed to wear a wire and cooperate with the FBI in their investigation of other people on the city council. And so at that point, Jermaine became an informant, but he did not know who the informant was, who he'd been talking to this whole time. And so then he went to the informant and said, I have a new idea. And we don't know why. I suspect that maybe he got a little bit afraid of having to testify against these people who he was supposed to be secretly recording.

And so what happened was is that he asked this informant to stage a fake robbery of his restaurant and to hit him over the head so hard that he would get amnesia and that he would not have to testify in court. And he actually went through with this plan. One morning, there was a 911 call that came in from his restaurant. And when the paramedics showed up, Jermaine was laying on the ground in the parking lot of his restaurant.

Next to him was the recording device that he had been wearing for the FBI. It was smashed to pieces. And he was like, they tried to get the recorder from me. You know, this, like, Oscar-winning performance. And he's, you know, he's claiming that he's been assaulted so badly that he can't remember anything. But oddly, there's, like, doesn't seem to be a scratch on him. And so, ultimately, Jermaine, as we sit here, he is currently in federal prison. He did end up doing time for all of this. Okay, so Jermaine got busted and there were real consequences. What about the others that you've been telling us about?

So the former mayor, Richard Kerr, he was sentenced to 14 months in federal prison recently. That was for taking bribes from people who wanted to open cannabis companies. So far, we haven't seen any charges raised against anyone else, just Richard Kerr, former mayor, and Jermaine Wright, a former city council member. All right, so we've got some charges. We've got some convictions. Also, obviously, we need some new people in the city council, unless I'm getting this wrong.

What actually happened to the jobs that these men were holding? Yeah, so despite the fact that the FBI raided City Hall and the mayor's home and the jet room, it took years for the feds to actually charge anyone. And so Mayor Kerr and Bug were both running for reelection four years later after they got elected. And there was a lot of people in town who were like, we don't want you to represent us. And that created an opening. And one of the people who really stepped up and decided to run against Bug in the election was a woman named Stevonna Evans.

You have to be the change you want to see. You can't just complain and hope that the people that put the system in place are going to change the system. Because they're not. She had grown up in Adelanto, and she, like a lot of people, were just tired of the corruption, tired of seeing the FBI roll into town and arrest city council members. They were also just tired of all the things that were not getting fixed. I mean, Adelanto has a lot of problems with its water quality, with its roads, and not a lot had changed, even though there were now dozens of weed companies in town run by these very wealthy people.

There was basically like this sea change that happened in the 2018 election. Stevonah won, a new mayor, Gabriel Reyes, got elected, and a new city council member, Jerry Hernandez, also got elected. So on a five-member council, you now had three brand new people who were in office. So instantly, they had a majority.

And it was a big change for Adelanto politically. For me, it was like, now the work begins, right? That's kind of where I went. Like, okay, well, we did this, and now we get to work. Now all the plans, all the things that we talked about, we actually have to implement, figure out how to implement because none of us had any experience. And so we had to figure out now how do we take all of these campaign promises, quote unquote, and bring them to life. And then when they got into office, they were able to look at the numbers and they discovered

there was a huge deficit, like millions of dollars were unaccounted for. So that kind of was depressing to know that there's $4.8 million that we have no idea where it went. Very frustrating for us as a new council, like y'all just lost $4 million and we all just cool with that. Just write it off. It's cool. What?

You know, the mayor was like, I want to sue people. Who do we fire? What happens? So it's deep. And what they found was basically chaos, I would say. Just like a total lack of organization. The city didn't even know how many weed companies were in town. When Stevana and Mayor Reyes and the new council took office, they thought there was about 40 or 50 cannabis companies in town.

And then they hired some people to actually do some due diligence on that. And what they found was there were or 50 cannabis companies in town. And then they hired some people to actually do some due diligence on that. And what they found was there were actually like 100 companies in town. Oh, how did we not know that we had 100 operators in the city? Welcome to Atalanta, right? We just do things and don't keep records of anything. And so the new council set out to like fix all these issues, to make sure that there was a clear understanding from everyone on both sides, from the city and these companies about how much taxes they should be paying, where to send the

check. All that stuff had to be worked out in that first year of them taking office. And did they do it? Did they actually succeed in cleaning some of this mess up? Yeah, they did. They did a great job. And today the city gets about 25% of its general fund from cannabis income, which is a huge deal for a place like Adelanto that might not exist as a city if it hadn't been for what they've been able to do with cannabis. So did Bug actually save the town? I mean, it worked.

In a way, that's true. I think Bug started this process that when he was in power, did not go great. But then when the new council took over, they were able to take what he had started and actually build it into something sustainable and something that could be like a real economic cornerstone of the city. Where do you think this town goes from here? Here's the tricky thing about the position that they're in. Where do you think this town goes from here? You kind of have to think about cities like people in terms of their credit. And now that they are on stable financial footing, their chances of getting the types of financing that a city needs to fix these big infrastructural problems are much better. And so I think there is a significant amount of hope considering doing this, you need to have some system in place to make sure that these sorts of shady deals aren't happening. And also, like, don't put all your eggs in one basket. I mean, right now, Adelanto is doing great and the marijuana industry is like, OK, but it's still a very unstable business.

And there are a lot of questions about what the future of the cannabis industry looks like, especially if it did become legal federally. You know, if weed was legal federally, it could wreak havoc on a lot of these towns because once you can start moving weed across state lines, you can have centralized giant farms run by huge corporations. And then that could potentially do a lot of harm to the smaller operators that exist now because things are isolated from state to state. David Weinberg, his very good podcast is called Dreamtown, the story of Adelanto. It's distributed by Crooked Media, and you can find it wherever you get your podcasts. Today's show was produced by Avishai Artsy and edited by Matthew Collette. Laura Bullard is our fact checker along with Serena Solon.

And Patrick Boyd is our engineer with an assist on this one from Christian Ayala. I'm Noelle King. It's Today Explained.