Medical marijuana advocacy group implodes on the cusp of victory

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This week should have been a time to celebrate for the main players in Coloradans for Medical Marijuana Regulation.

In recent months, the group has been an energetic and effective advocate for measures to codify the medical marijuana business in the state. Instead of rebelling against any and every attempt to limit the industry's activities, or backing away when legislators pushed proposals they saw as wrongheaded, CMMR representatives actively engaged in the process -- and while House Bill 1284 and Senate Bill 109 don't read like a dispensary owner's wish list, their approval by lawmakers, and Governor Bill Ritter's promise to sign them, is enormously significant for the medical marijuana movement in Colorado and beyond.

But as HB 1284 was passing through the legislature on Tuesday, CMMR's principals were at each other's throats, pointing fingers about potential wrongdoing in ways that have torn the organization in half. Some victory party.

On one side of the clash are CMMR executive director Matt Brown and Wanda James, co-owner of the Apothecary of Colorado and 8 Rivers restaurant, as well as CMMR's president -- although plenty of people interviewed by Westword didn't know she held this title, and by her own admission, she hasn't been intimately involved in the organization beyond the period of its founding.

Lined up opposite them is Josh Stanley, owner of the Peace In Medicine Center dispensary, who says he thought he was CMMR president and presents plenty of documentation to prove he was frequently referred to as such. Stanley is supported by Stacey Vilos-Fauth, part owner of another dispensary, B*Goods Apothecary, who was pretty sure she was CMMR's treasurer -- until she found out this wasn't the case. Also backing Stanley are attorney Brett Barney, CMMR public-relations consultant Michael Hoog (read a statement by him about the subject by clicking here) and numerous donors to the group who signed affidavits echoing Stanley's claims even though they wish to remain anonymous.

This reticence to have their names associated with the CMMR situation can likely be traced to the involvement of the Denver District Attorney's Office. Late last month, Brown presented a packet of information to DA personnel, spurred by his discovery that thousands of dollars in donations to CMMR never made it into the group's main bank account. Instead, he learned, the money had been placed in a newly created CMMR account to which he had no access.

Why? Brown says Stanley told him he was planning to start a new organization, and that he would be taking with him two CMMR lobbyists, Kristen Thomson and Kara Miller, who had been paid using the CMMR donations placed into that second account. (CMMR also has two other lobbyists, Fofi Mendez and Michael Beasley.)

But Stanley says he never told Brown he was going to split off to create a new group. (He concedes that he may do so in the future, but only because of the current CMMR schism.) According to him, the new bank account was put in place because lobbyists Thomson and Miller hadn't received promised compensation and were threatening to walk at an extremely crucial time for HB 1284. Moreover, he says, Vilos-Fauth established the second account with his support because of questions about CMMR's finances as a whole. By his estimate, the group is tens of thousands of dollars in debt, and he has no idea where much of the money given to the organization went.

Barney's got a guess about part of it. He says Brown took a two-month advance on his $6,000-per-month salary -- something Barney calls a violation of the organization's bylaws -- "to buy a new BMW." Brown counters that he bought "a $6,000 car" using money he'd earned in a separate consulting job, and says he hasn't been paid by CMMR since February "because other bills needed to be taken care of first."

Brown, Stanley and everyone else interviewed for this story swear they're not accusing anyone of anything. Rather, they're simply asking questions and seeking answers.

So, too, is the Denver DA's office -- but it's unclear at this point whether any laws were broken. Spokeswoman Lynn Kimbrough confirms that a complaint has been received, but she says DA's office staffers are in "the information-gathering stage." Once that phase is completed, they'll determine whether or not an investigation is warranted.

If no decision about potential criminal charges has been made, however, there's plenty of evidence indicating communication problems and severe dysfunction among the powers behind CMMR. They may still be fighting for the same cause -- both Brown and Stanley trumpet the passage of HB 1284 as a tremendous achievement -- but they're also fighting against each other.

In the beginning, Wanda James recalls, CMMR was designed to get the assorted folks interested in promoting medical marijuana regulation to work together rather than at cross purposes.

"Months and months ago," she remembers, "before we opened the dispensary -- sometime last summer -- I was approached about Colorado Patients and Providers Coalition," one of several groups that had sprung up during the medical marijuana industry's incredible growth spurt. "I was asked to help move that organization forward, and some time later, I met with Matt and Josh's team."

The duo had paired up, says Brown, thanks to his connection with attorney Warren Edson, a marijuana-law expert also acquainted with Stanley; he and Edson shared office space. Brown was working as a small business consultant, and over the past couple of years, he'd begun advising entrepreneurs interested in opening up medical marijuana operations about the best way to navigate the terrain -- an expanse with very few rules of the road at that juncture.

CPPC was Stanley's baby, and he asked Brown to come aboard last fall. But as the political infighting over medical marijuana heated up, they came to the conclusion that the coalition, which served as something of a trade association for dispensaries, growers and so on, wasn't the right vehicle to use when lobbying the legislature. That sowed the seeds for CMMR, which James did her best to put on a firm foundation.

"As we started looking at this," she says, "I told them, 'This is a political campaign you're getting ready to run, not just a minor lobbying piece. So let's bring in some players I know from working on Amendment 20," the 2000 initiative that legalized medical marijuana in Colorado.

James, a political heavy-hitter who ran Congressman Jared Polis's first campaign in 2006, soon lined up some impressive advisors, including attorney Mark Grueskin, who wrote Amendment 20, plus Rick Ridder and Joanie Braden of Ridder Braden Inc., who served as campaign consultants for the amendment. Once the trio was onboard, James says, "We decided to form CMMR, and Mark drew up the paperwork. Josh and Brett weren't really involved in this whole piece; they were working on the CPPC angle."

The incorporation documents filed with the Secretary of State's office don't designate specific positions in the hierarchy, Brown says -- but the organizational structure written by Grueskin did.

"I was made president and Matt was treasurer and secretary," James says, "and we set everything in motion. We held numerous meetings to hire lobbyists and worked on polling."

After that, James reduced her role. "I already had the restaurant, and then we opened up the dispensary, so I just didn't have time," she points out. "I did everything I could behind the scenes with any contacts and so on. But Matt was the person who was doing all the heavy lifting - the one who started working with the legislators and putting the program in play with Mark, Joanie, Rick and our lobbyists."

In January 2010, more consolidation took place, with CMMR combining forces with another group, Dispensary Owners Coalition; DOC had been the brainchild of GreenDocs, a medical marijuana consulting firm. That's how Vilos-Fauth got involved. "I had originally been part of DOC," she says, "and I was told that I was to be the treasurer for CMMR. It was a volunteer position; I wasn't receiving any compensation for it. But Matt took me down to Wells Fargo and put me on the bank account."

During that late January-early February period, Stanley says a series of meetings took place. He refers to them as "round-table discussions," during which plans were made for publicizing CMMR's mission via get-togethers with various editorial boards and organizations around the state. At these sessions, he says, "it was decided that I would be president and spokesperson for CMMR. I didn't necessarily want to be president, but I understood that was my role, and I agreed to play it."

That's not the way Brown tells it. He began using the executive director title at the suggestion of his CMMR colleagues, he maintains -- but he's firm that no such mandate was given to Stanley. "The term 'president' is something Josh began using for himself," he says. "Wanda James is and always has been listed as president of the organization, and I am the treasurer and secretary on the official paperwork that created CMMR -- and in everything publicly said about CMMR, I've been referred to as the executive director." He sees Stanley's references to the president title as "grandstanding" -- a term that earns a scoff from Stanley.

Whatever the case, Stanley was referred to as president in the Denver Post, the Colorado Statesman and KUNC, among other media outlets. Granted, the title varied at times. A Grand Junction Daily Sentinel article from February calls him a CMMR "founding member" -- a designation that brings with it other complications.

Attorney Brett Barney, a Stanley associate who worked on behalf of CMMR but didn't have a formal role, says he first saw the organization's bylaws within the past week or two, and what he read surprised him: "Matt Brown has gone around soliciting memberships for CMMR, and the bylaws say no memberships were to be created."

Indeed, memberships are off-limits for CMMR, as Brown acknowledges. "Because we are a 501(c)(4), donations to organizations like ours are tax deductible," he says. "So there's never been a benefits package, no 'here's what you get.' It's always been, 'Here's the fight, and we need money to keep the fight going...' I've always been very careful to use the word 'donations' instead of 'memberships.'"

Well, not always. For instance, the CMMR website makes several references to members, and printouts given to attendees at a recent meeting read "Intended for CMMR members only." But Brown chalks that up to "a poor choice of wording" rather than a violation of this rule.

In any event, CMMR soon went into the red despite pledges on the part of the thirteen original donors to pay around $3,000 per month each to fund the operation. One reason is that some of the would-be donors, most of them dispensaries, were financially unable to do so. But in Stanley's view, these unmet obligations don't fully explain the size of the fiscal hole in which CMMR was stuck. Around April 12, Vilos-Fauth says, she discovered that there were between $50,000 and $75,000 worth of unpaid bills.

Rather than directly confirming or refuting this figure, Brown talks about it in a general way. "We are not necessarily in debt, but we have certainly been late on bills because our fundraising hasn't matched our expenses," he says. "After two new lobbyists came on in January [Miller and Thomson, joining Mendez and Beasley], which went into effect in February, that was a $10,000 net increase in overhead at the same time fundraising dwindled. And when the GreenDocs group joined CMMR and gave up the DOC group they created, they were adamant that no future contributions would go to existing past debts of CMMR, which created a number of strained relationships. So some of the bills have been paid off, and some are still outstanding."

Adds James, "There are a lot of things that were billed but weren't going to be paid off until we got the organization going and the fundraising happening. It's a little disingenuous the way they're putting it, because everyone understands how it works in a political campaign. I mean, Mark gave us a bill, but he wasn't expecting to get paid right away. And some of that money is owed to Matt," including his salary for March and April.

To Stanley, these explanations don't add up. "Nothing about the books jibes," he says, "and I won't be satisfied until I'm able to see where these funds went -- what happened to the money I raised and that these good people donated."

Examples? Figures supplied by Brown, who says he scrupulously tracked every dollar sent to CMMR, show Stanley providing $5,800 to the cause - but Stanley says he gave a lot more than that. And another donor listed as having donated $3,300 offers copies of checks adding up to $6,100, a $2,800 difference.

When asked about this last discrepancy, Brown says the extra $2,800 wound up in the second account -- the one to which he had no access. He and James were listed as key executives on the first account but not on the second one.

The additional account came into being, says Vilos-Fauth, after she grew concerned with the way Brown was handling CMMR's money. In her words, she felt the problems represented a "pattern."

Why didn't she take up these trepidations with Brown? According to Stanley, "she tried to tell him. And he just said, 'Don't worry about it.'"

But concerns remained, and Vilos-Fauth shared them with Stanley, who she understood to be CMMR's president, and Barney. "Bridges were being burned all over town," she says, "and I didn't want any part of that. We needed to take action so that people would get paid," including lobbyists Miller and Thomson.

To address these issues, Stanley encouraged Vilos-Fauth, also a signatory on the first account, to open up a second one using recently collected donations. A document provided by attorney Saskia Dehring, who represents both Vilos-Fauth and Stanley, shows a total of $13,700 went into account number two, from which two checks for $4,000 each were cut -- one for Miller, the other for Thomson. Dehring says the remaining sum is still in the account.

Dehring is handling the banking matters on behalf of Vilos-Fauth, Stanley says, because he was never a signatory on the account. "I never wrote a check, I never took money out of the account, I never put money into the account - because I couldn't," he allows. A screen capture provided by Brown that lists Stanley and Vilos-Fauth as key executives seems to suggest otherwise, but Stanley calls it into question. All he did, he says, was support Vilos-Fauth's goal of making sure lobbyists Thomson and Miller were retained. For her part, Vilos-Fauth says it was her understanding that "all the donors were aware of the donations and where they went. It was discussed with them and they understood their money did exactly what it was meant to do, which was pay the lobbyists and the PR people." But she admits that these conversations were "after the fact."

In the interim, Brown says he'd noticed "what looked like some irregularities in our fundraising," with no record of an April donation from a dispensary that had given consistently up until that point - "so I sat down with the owner and said, 'You've been great, but there's not an April check. Is something wrong?' And I was very quickly told, 'We gave Brett Barney two checks totaling $4,500.' And I knew for a fact it hadn't hit our account."

After that, Brown sent an e-mail to supporters saying he wanted to update all donor information - and he subsequently learned of another check, this one supposedly collected by Stanley, that hadn't found its way into the CMMR account, either. So he sat down with Stanley the following week and asked what was up.

The two men's descriptions of what was discussed during this chat could hardly be more different.

"For the first hour of our meeting, Josh told me how he would be starting his own lobbying group, to lobby for, as he put it, 'the Walmart dispensaries,'" Brown says. "At the end of that, I asked, 'What happened to the checks?' And over the next sixty seconds or so, he admitted that Brett Barney advised that they create a new bank account and the money was going to two of our four lobbyists to start another group -- and he was very surprised that there was a problem with any of this."

And Stanley?

"I never told Matt Brown I was forming a separate group," he maintains. "I told him I didn't believe in the direction CMMR had taken, with the debts and the lack of transparency. But I gave no indication that I was forming a group for large dispensaries. I fight for everyone, and everyone knows that. There was never a discussion of me starting another group and taking lobbyists with me. That's absolutely incorrect."

As for the second account, Brown was able to confirm its existence the next day - Thursday, April 22, by his reckoning. Afterward, he says, "I put a fraud alert on and pulled together my evidence for the Denver Police Department fraud unit. I left a message with them, and they got back to me early the next week and referred me to the Denver DA's economic crimes unit."

He provided his data packet to the DA's office shortly thereafter, but he delayed telling CMMR supporters what was going on for fear it would prove to be a distraction from the HB 1284 battle. For that reason, the first inkling most of the group's donors had that something weird was happening came toward the tail end of an April 29 e-mail from Brown about upcoming meetings. The excerpt read:

Finally, I'd like to announce that Josh Stanley, Brett Barney and Stacy [sic] Vilos-Fauth have decided to leave CMMR to pursue a new Dispensary Advocacy group dedicated specifically to the interests of larger dispensary owners in next year's General Assembly. Assisting in this effort will be Kristin [sic] Thompson and Kara Miller, two of the lobbyists added to our team with the merger of the D.O.C. advocacy group to CMMR in late January. I appreciate all the time and effort that has been dedicated to CMMR over the past several months and I wish them the best of luck in their future endeavors.

Stanley, Barney and Vilos-Fauth all say this note was the first they'd heard about them leaving CMMR to start a new organization, and they were shocked by the assertion. Perhaps that's why so much lawyering up took place over the next few days. Stanley and Vilos-Fauth acquired the services of Dehring, while Thomson and Miller obtained representation from Anne McGihon.

Both Dehring and McGihon sent Brown letters advising him that any future communication with their clients should go through them. (The Dehring statement to Brown is accessible by clicking here. The letter McGihon sent to Brown can be accessed here.) McGihon subsequently offering a statement regarding Stanley's status with CMMR. She notes that "Mr. Brown testified as Executive Director of CMMR and Mr. Stanley testified as President of CMMR at almost every legislative hearing on Senate Bill 109 and House Bill 1284 during the 2010 Legislative Session." (To read the entire McGihon statement, click here.)

The aforementioned Brown e-mail touted a meeting on May 5, when the future of CMMR would be discussed. At that well-attended session, Brown finally gave his version of the story, passing out copies of a two-page narrative he'd created for the DA's office, the donation breakdown and the bank screen capture that so trouble Stanley and Barney, and a variety of other material. (To read the narrative, from which some names have been removed, click here.) Brown says he did so because he doesn't want to hide anything from the people who keep CMMR going.

That's Stanley's approach, too, he says -- and he brands any implication that he, Barney or Vilos-Fauth did something untoward "absolutely insane."

Regarding the state of CMMR's finances, he says, the supporters of the organization deserve to know the whole truth, and not just the perspective presented by Brown.

"Once the books are opened, I think the questions will be quelled," he believes. "Until then, it's just speculation on my part, or on anyone else's part. I want to believe that Matt Brown has done his best, and until that's proven, the only thing I can do is ask questions myself."

The conflict as a whole is "quite unfortunate," he goes on, "because we've worked so hard on this bill. We've worked tirelessly to get it passed, and we did it."

No argument about that. But pretty much everything else remains in dispute.

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