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Herbal Alternatives Dispensary Founder Pleads Guilty to $1.2 Million in Federal Tax Evasion

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The former owner of a medical cannabis dispensary in Washington, D.C., pleaded guilty on May 13 to federal tax evasion charges, according to the U.S. Attorney’s Office (USAO) for the District of Columbia.

Jennifer Brunenkant, 68, who founded Herbal Alternatives, admitted that she failed to pay federal income and employment taxes tied to the dispensary and her personal income from tax years 2017 to 2021, according to the USAO. The Internal Revenue Service (IRS) Criminal Investigation unit investigated the case.

The government will seek more than $1.2 million in restitution at Brunenkant’s sentence hearing that is scheduled for Nov. 20, 2025. U.S. District Court Judge Loren L. AliKhan will determine the final sentence.

“Brunenkant further attempted to evade paying those taxes by falsely attesting on her annual Unincorporated Business Franchise Tax Forms, filed in the District of Columbia, that she had filed her federal income tax returns—when in fact she had not,” according to a release from the USAO. “Brunenkant continued trying to avoid detection when she repeatedly told law enforcement during a July 2023 interview that she had filed her returns.”

Herbal Alternatives, which began operating when D.C.’s retail program commenced in 2013, sells cannabis to medical patients and self-certifying adults just four blocks from Lafayette Square and prides itself as the first female and native Washingtonian-owned dispensary in the district.

Although the district’s voters approved a medical cannabis legalization measure in 1998, a federal rider spearheaded by former Georgia Congressman Bob Barr blocked city officials from using federal funds to implement the program until after the rider was lifted in 2009.

Brunenkant’s plea this week comes after she was charged in a 19-count indictment on March 6 related to the IRS investigation.

According to the indictment, Brunenkant was the sole owner of Herbal Alternatives from at least 2013 to 2021, during which time the dispensary generated millions of dollars in revenue. The income that Brunenkant earned from the dispensary should have been reported on her annual IRS Form 1040, U.S. Individual Income Tax Return, according to the USAO.

According to the indictment, she failed to file an income tax return and to make payments of roughly $800,000 to the IRS over multiple years.

“The indictment further alleges that Brunenkant employed dozens of employees at Herbal Alternatives,” according to the USAO. “Under federal tax laws, Brunenkant was required to collect, account for, and pay over to the IRS on behalf of Herbal Alternatives the employment taxes imposed on its employees by the Internal Revenue Code. According to the indictment, Brunenkant failed to pay over to the IRS approximately $130,000 in such employment taxes that were owed during the charged tax years.”

While traditional U.S. companies can deduct ordinary business expenses, such as payroll, from their federal taxes, cannabis companies are subject to Section 280E of the Internal Revenue Code, a punitive tax structure for drug trafficking a Schedule I or II drug under the Controlled Substances Act. This means cannabis operators can’t deduct their ordinary business expenses from their taxable income, providing the federal government billions of tax dollars annually from an industry it does not recognize as legitimate.

Those who evade taxes and fail to pay employment taxes face a maximum prison sentence of five years for each offense in addition to financial penalties.



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Results from Swiss Cannabis Pilot Program Suggest Legalization Reduces Problematic Cannabis Use

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The first results from Switzerland’s adult-use cannabis pilot program suggest that legal cannabis access reduces problematic cannabis consumption, according to a study published last month in the journal Addiction. In the study, the researchers define “problematic consumption” if it causes or exacerbates health, social or psychological difficulties – even without dependency in the classic sense. 

Out of approximately 370 participants who participated in the study, half were able to buy legal cannabis in one of the nine participating pharmacies. The participants were offered counseling in the process. The other half, as a control group, continued to use illegally-sourced cannabis. The participants reported on their consumption and mental state via regular questionnaires. 

The participants who obtained cannabis legally reported “a significant drop” in problematic cannabis use, despite there being no significant difference between the first study groups in terms of anxiety, depression, and other symptoms in the first six months. After the first six months, the control group was able to buy cannabis through the pharmacies. Two years into the study, the 300 participants still taking part showed significant improvement in their mental state.  

“Public health-oriented recreational cannabis access may decrease cannabis use and cannabis-related harms,” the researchers concluded, “especially among those using other drugs.” 

Last February, the National Council’s Social Security and Health Committee voted 14-9 in favor of a federal law draft that would allow citizens to grow, buy, possess, and consume cannabis. The Weed Care study was launched in Basel in January 2023.  

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Legal Markets Protect Marijuana Consumers From Tainted Products (Op-Ed)

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“By taking cannabis products off street corners and placing them behind the counter, lawmakers are providing cannabis consumers with safer experiences.”

By Paul Armentano, NORML

It comes as no surprise that police in Warwick, Rhode Island recently walked back claims that exposure to “fentanyl-laced cannabis” was responsible for a local woman’s tragic overdose death. While street fentanyl can no doubt be deadly, the substance is rarely if ever present in cannabis.

Nonetheless, sensational headlines and dubious police reports claiming otherwise remain plentiful. For instance, police in Brattleboro, Vermont generated headlines in 2021 when they arrested multiple persons on charges of distributing fentanyl-tainted cannabis. Days later, however, lab tests confirmed that no fentanyl was present in any of the marijuana samples seized by law enforcement.

A similar, highly publicized scenario also unfolded in Connecticut, where officials alleged that marijuana laced with fentanyl was responsible for over three dozen overdose incidents. Forensic analyses later determined that only one of these cases actually involved the ingestion of fentanyl. That case, health officials said, was probably the result of accidental contamination.

Such sensational pronouncements, followed by far less publicized refutations, are nothing new. According to the findings of a 2023 report issued by New York State’s Office of Cannabis Management: “Misinformation related to the danger of accidental overdose due to cannabis ‘contaminated’ with fentanyl remains widespread… Anecdotal reports of fentanyl ‘contaminated’ cannabis continue to be found to be false, as of the date of this publication.”

In fact, a recent Harvard Medical School study revealed that forensic labs almost never find fentanyl in illicit cannabis seizures. “Our results show no evidence of widespread fentanyl co-occurrence with cannabis,” the study’s authors concluded.

That’s not to say that some unregulated cannabis products aren’t without their own quality control issues. For instance, a recent scientific analysis of unregulated cannabis flowers seized by police determined that 16 percent of samples “had detectable levels of mycotoxins and fungal metabolites.” Some hemp-derived cannabinoid products have been found to contain unlabeled cutting agents and potentially dangerous heavy metals—including magnesium, chromium, nickel, and mercury.

Some commercially available CBD products have also been found to contain psychoactive additives, including dextromethorphan, a common cough suppressant. In addition, these unregulated products often contain far higher or lower percentages of the active ingredients identified on their labels. As a result, consumers may be getting far more, or in other instances, far less than they bargained for.

Of course, the solution to these quality control issues isn’t to amplify sensational (and often fictitious) claims about a supposed epidemic of fentanyl-laced or otherwise tainted weed. It’s to eliminate consumers’ exposure to potentially adulterated or mislabeled products.

Under state-imposed regulations governing the adult-use and medical cannabis markets, products are made available from licensed manufacturers at state-licensed retail stores. Cannabis is cultivated, and products are manufactured, in accordance with good manufacturing practices. Products are lab tested and labeled accordingly—ensuring that consumers have access to products of verified purity and potency.

As these state-legal markets mature, they disrupt the unregulated cannabis marketplace. According to a 2023 survey, 52 percent of consumers residing in legal states said that they primarily sourced their cannabis products from brick-and-mortar establishments. By contrast, only six percent of respondents said that they primarily purchased cannabis from a “dealer.”

Further, jurisdictions that have legalized marijuana markets see declines in the use of both synthetically produced and unregulated hemp-derived cannabis products.

Will marijuana legalization bring an end to the fentanyl crisis? No. But by taking cannabis products off street corners and placing them behind the counter, lawmakers are providing cannabis consumers with safer experiences and greatly reducing their risk of being inadvertently exposed to contaminated products.

Paul Armentano is the deputy director of NORML–the National Organization for the Reform of Marijuana Laws.

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Trump’s DEA Pick Refuses To Detail Marijuana Rescheduling Stance In Response To Senator’s Questions

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President Donald Trump’s pick to lead the Drug Enforcement Administration (DEA) is declining to commit to rescheduling marijuana, or to say how he’d approach federal enforcement in states that have legalized cannabis.

In written responses to questions from two Democratic senators as part of his confirmation, the nominee for DEA administrator, Terrance Cole, largely demurred on multiple questions around marijuana policy issues, including a pending proposal to move cannabis from Schedule I to Schedule III that was initiated under the Biden administration.

Asked by Sens. Cory Booker (D-NJ) and Alex Padilla (D-CA) about his position on that proposal, Cole—who has previously voiced concerns about the dangers of marijuana and linked its use to higher suicide risk among youth—simply said that, if confirmed, he will “give the matter careful consideration after consulting with appropriate personnel within the Drug Enforcement Administration, familiarizing myself with the current status of the regulatory process, and reviewing all relevant information.”

While he gave noncommittal answers when asked about rescheduling in the written questions, Cole said during an in-person hearing before the Senate Judiciary Committee last month that examining the rescheduling proposal will be “one of my first priorities” if he’s confirmed for the role, saying it’s “time to move forward” on the stalled process—but again without clarifying what end result he would like to see.

“I’m not familiar exactly where we are, but I know the process has been delayed numerous times—and it’s time to move forward,” he told Padilla at the time. “I need to understand more where [agencies] are and look at the science behind it and listen to the experts and really understand where they are in the process.”

In the newly released written questions, Booker further asked the nominee whether he felt DEA is “bound” by the scheduling process as articulated under the Controlled Substances Act (CSA).

“As in all matters, if confirmed, I would look at the individualized facts and circumstances and follow the law and any policies of the Department,” Cole said.

The prospective DEA head then responded to several follow-up questions—such as whether the agency should abide by scheduling recommendations made by the U.S. Department of Health and Human Services (HHS) or whether drugs that have been found to be harmless and medically beneficial should be in Schedule I—by simply referencing his earlier comments.

He took a similar approach to the questions for the record (QFRs) from Padilla, who similarly pressed the nominee on the rescheduling process, which has been stalled amid legal challenges by witnesses participating in administrative hearings to finalize the proposed rule.

Cole gave identical responses to questions about his views on rescheduling and whether he believes marijuana possesses therapeutic value. He then again continued to reference those comments in response to questions about how he’d approach enforcement of federal law if cannabis was moved to Schedule III and the prospect of new federal guidance for enforcement priorities around marijuana.

“What is your view on the continued criminalization of marijuana at the federal level in states that have legalized its use? How should the DEA approach investigations or enforcement actions in those jurisdictions?” Padilla asked.

The nominee repeated: “If confirmed, I will give the matter careful consideration after consulting with appropriate personnel within the Drug Enforcement Administration and reviewing all relevant information.”

At the Judiciary Committee hearing last month, Cole also said in response to questions from Sen. Thom Tillis (R-NC) that he feels it’s appropriate to form a “working group” to look at the federal-state marijuana law disconnect in order to “stay ahead of it.”

The nominee worked at DEA for 21 years and currently serves as Virginia’s secretary of Public Safety and Homeland Security (PSHS), where part of his responsibility is to oversee the state Cannabis Control Authority (CCA).

After a visit to CCA’s office last year, Cole posted on LinkedIn: “Everybody knows my stance on marijuana after 30 plus years in law enforcement, so don’t even ask!”

Trump initially chose Hillsborough County, Florida Sheriff Chad Chronister to lead DEA, but the prospective nominee—who strongly advocated for marijuana decriminalization—withdrew from consideration in January amid scrutiny from conservative lawmakers over the sheriff’s record on COVID-related public safety enforcement actions.

As far as the marijuana rescheduling process is concerned, DEA recently notified an agency judge that the proceedings are still on hold—with no future actions currently scheduled as the matter sits before the acting administrator, Derek Maltz, who has called cannabis a “gateway drug” and linked its use to psychosis.

Meanwhile, although shutting down licensed marijuana dispensaries doesn’t “rise to the top” of his priorities, an interim U.S. attorney who recently warned a Washington, D.C. cannabis shop about potential federal law violations says his “instinct is that it shouldn’t be in the community.” He’s since rescinded his consideration for unrelated reasons, however.

Separately, last month, an activist who received a pardon for a marijuana-related conviction during Trump’s first term paid a visit to the White House, discussing future clemency options with the recently appointed “pardon czar.”

A marijuana industry-backed political action committee (PAC) has also released a series of ads over recent weeks that have attacked Biden’s cannabis policy record as well as the nation of Canada, promoting sometimes misleading claims about the last administration while making the case that Trump can deliver on reform.

Its latest ad accused former President Joe Biden and his DEA of waging a “deep state war” against medical cannabis patients—but without mentioning that the former president himself initiated the rescheduling process that marijuana companies want to see completed under Trump.

Read Cole’s full responses to senators’ marijuana questions below:

QUESTIONS FROM SENATOR CORY A. BOOKER

1. In October 2022, the Department of Justice (DOJ) requested the Department of Health and Human Services (HHS) to conduct a scientific review of how marijuana is scheduled under the Controlled Substances Act. Section 811(b) of Title 21 of the United States Code requires the Attorney General to request a scheduling recommendation from the Secretary of HHS, based on an eight-factor medical and scientific analysis, to schedule, reschedule, or deschedule a substance. After conducting this eight-factor review and gathering scientific findings, HHS submitted a recommendation to DOJ to reschedule marijuana from Schedule I to Schedule III. In May 2024, DOJ published a notice of proposed rulemaking to move cannabis from Schedule I to Schedule III under the Controlled Substances Act.

a. If confirmed, will you follow the HHS recommendation to reschedule cannabis from Schedule I to Schedule III?

RESPONSE: If confirmed, I will give the matter careful consideration after consulting with appropriate personnel within the Drug Enforcement Administration, familiarizing myself with the current status of the regulatory process, and reviewing all relevant information.

b. Is DOJ bound by the schedule process required by the Controlled Substances Act?

RESPONSE: As in all matters, if confirmed, I would look at the individualized facts and circumstances and follow the law and any policies of the Department.

c. Under what circumstances do you believe it would be appropriate for the DEA to reject HHS’s recommendation? Please provide specific examples.

RESPONSE: Please see my response to Question 1.a. above.

2. Since the enactment of the Controlled Substances Act more than 50 years ago, DEA has never overruled HHS’s recommendation to re- or de-schedule a drug from the list of controlled substances.

a. If you are confirmed, do you commit to following the scheduling process required by the Controlled Substances Act?

RESPONSE: Please see my response to Question 1.b. above.

b. Do you commit to following HHS’s scheduling recommendations?

RESPONSE: Please see my response to Question 1.a. above.

c. Should substances be scheduled according to their potential for abuse and accepted medical use, as required by the Controlled Substances Act?

RESPONSE: Please see my response to Question 1.b. above.

d. Should substances that are harmless or have medical use belong in Schedule I, which is reserved for the most dangerous substances that have no medical use?

RESPONSE: Please see my response to Question 1.b. above.

Questions for the Record from Senator Alex Padilla

1. As Administrator, you would play a critical role in ensuring the agency’s enforcement posture adapts to any new legal framework for marijuana.

a. Do you believe marijuana has currently accepted medical use in treatment in the United States? Please explain your reasoning, including what factors the DEA should consider when evaluating scientific and medical evidence.

RESPONSE: If confirmed, I will give the matter careful consideration after consulting with appropriate personnel within the Drug Enforcement Administration, familiarizing myself with the current status of the regulatory process, and reviewing all relevant information.

b. The DEA has initiated proceedings to reclassify marijuana as a Schedule III substance under the Controlled Substances Act. If confirmed, will you commit to completing the rulemaking process in a timely and good-faith manner, consistent with HHS’s scientific and medical recommendations?

RESPONSE: Please see my response to Question 1.a above.

c. What steps would you take to ensure that the DEA’s enforcement practices reflect the new classification of marijuana under Schedule III and do not undermine the agency’s credibility?

RESPONSE: Please see my response to Question 1.a above.

d. What is your view on the continued criminalization of marijuana at the federal level in states that have legalized its use? How should the DEA approach investigations or enforcement actions in those jurisdictions?

RESPONSE: If confirmed, I will give the matter careful consideration after consulting with appropriate personnel within the Drug Enforcement Administration and reviewing all relevant information.

e. How will DEA guidance to personnel change with the reclassification of marijuana to Schedule III? Will you instruct DEA agents to deprioritize enforcement actions against marijuana-related activities conducted in compliance with state law?

RESPONSE: Please see my response to Question 1.a above.

f. How do you plan to ensure that rescheduling does not create new criminal enforcement risks for individuals or businesses operating lawfully under state marijuana regimes, particularly with respect to controlled substance analogues or derivative products?

RESPONSE: Please see my response to Question 1.d above.

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