ALEXANDRIA, Va. (WRIC) — As Virginia once again stalls legalization of marijuana, a D.C. man is facing up to twenty years in prison for operating a marijuana delivery service in which he concealed black market proceeds.
According to the indictment filed against them, Connor Pennington, along with his brothers and business partners, Solomon and Hayden, ran JointVentures out of an apartment building in D.C. Initially, the three — along with office managers they hired — were also charged with conspiracy to distribute controlled substances.
It is still illegal to sell cannabis under federal law, but both D.C. and Virginia — the localities in which the business operated — have decriminalized simple possession of weed and personal cultivation. However, it is still illegal to sell marijuana in both places, and Republicans in Virginia have stalled efforts to kick-start a legal retail market in the commonwealth.
Still, federal prosecutors dropped the distribution charges against Pennington when he pleaded guilty earlier this year.
Instead, their case against him focused on his evasion of banking and business regulations.
According to a statement of facts, Pennington registered JointVentures as dealing in “e-commerce sales of smoke shop accessories.” The statement adds that the business maintained a “professional” website — which is now defunct — and a distribution system “similar to food delivery services like UberEast or DoorDash” which primarily dealt in cash.
In 2018, internal company documents revealed that cashflow topped $1.4 million, and by 2021 — when the business operated for just three quarters — proceeds were more than $2.3 million.
The offenses Pennington and others eventually pleaded guilty to were not drug charges — they were financial crimes.
Because the businesses dealt in cash, and because their product was and is still illegal under federal law, they routinely deposited small amounts of cash — in amounts less than $10,000 — in a variety of linked bank accounts.
According to an internal email from Pennington, the business had to deal in large amounts of cash to purchase marijuana and pay employees because, “we are not doing any sales to vendors in white markets and to be honest we probably won’t be doing distribution anytime soon in the legal market.”
In an earlier sentencing memorandum for another member of the so-called money-laundering conspiracy, defense attorneys wrote, “The prosecution of nonviolent marijuana distributors who sell cannabis through a storefront dispensary in a jurisdiction where recreational use marijuana is legal, appears unparalleled in the United States.”
Indeed, lawyers for the Penningtons and others charged by the government, argued that the defendants should receive probation and time-served because they were non-violent and operated as an otherwise normal business in an area where “legalized use [of] marijuana is now the community standard.”
Prosecutors disagreed, requesting a sentence of six months. In their own sentencing letter, they wrote that this was still a radical departure from sentencing guidelines, which recommended at least 46 months in prison, but wrote that some jail time was necessary to “promote respect for the law.”
Pennington will be sentenced at a hearing in May.