In a stunning development, Erin Dupree steps down less than 24 hours after being tapped by Governor Tim Walz to run the state's new Office of Cannabis Management (OCM).
Minnesota's legal marijuana industry is not exactly getting off to the kind of start hoped for by the many advocates and stakeholders who worked hard to pass the North Star state's cannabis legalization measure this past summer.
As first reported by Minnesota Public Radio (MPR) News last Friday, the newly appointed director of the state's Office of Cannabis Management (OCM) abruptly resigned from the position just one day after being chosen by Governor Tim Walz (D) to run the regulatory agency in charge of establishing rules and regulations for Minnesota's legal marijuana market.
According to an MPR News-APM Reports investigation, Erin Dupree's hemp business, Loonacy Cannabis Co., which she founded in July 2022, allegedly sold products that exceeded state limits on THC potency. The investigation also discovered that she owed large sums to former business associates and employees and had amassed tens of thousands of dollars in federal tax liens.
The Apple Valley storefront for Loonacy Cannabis was already cleared out Friday in preparation for an anticipated sale following her appointment. However, the company's website and several social media posts made by Dupree show products advertised containing THC levels far above the state's limits for low-dose potency items. The site and posts also feature vape pens, prohibited under the state law governing hemp-derived products as well.
In a statement following her resignation announcement, Dupree said, "I have never knowingly sold any non-compliant product, and when I became aware of them I removed the products from inventory. Conducting lawful business has been an objective of my business career. However, it has become clear that I have become a distraction that would stand in the way of the important work that needs to be done."
"I have never knowingly sold any non-compliant product, and when I became aware of them I removed the products from inventory. Conducting lawful business has been an objective of my business career. However, it has become clear that I have become a distraction that would stand in the way of the important work that needs to be done."
- Erin Dupree, Former Director of the MN Office of Cannabis Management
The entire incident is not the kind of inauspicious beginning to the legal cannabis era Governor Walz was hoping for when he signed the bill making Minnesota the 23rd state to legalize adult-use marijuana into law this past May.
Walz's office did not make a formal comment concerning Dupree's departure. Still, his office did issue a written statement Friday evening saying that the current interim director of the office, Charlene Briner, would stay on in an acting role until a replacement is named.
"We have a responsibility to assure Minnesotans that this emerging market will be safe, lawful and well-regulated. We're making progress toward implementing this work, including beginning the hiring process for nine key leadership positions, and we will launch the rulemaking process in October," Walz said.
"We have a responsibility to assure Minnesotans that this emerging market will be safe, lawful and well-regulated. We're making progress toward implementing this work, including beginning the hiring process for nine key leadership positions, and we will launch the rulemaking process in October."
- Minnesota Governor Tim Walz (D)
Dupree's apparent flagrant disregard for selling non-compliant items alone would have been grounds enough for her removal. However, the investigation revealed that Dupree had also been found liable in multiple legal cases for monetary damages stemming from unpaid wages or for work she failed to perform.
Likewise, investigators uncovered records from the Washington County Recorder's Office revealing six liens for unpaid taxes exceeding $115,000 filed against Dupree and her cleaning business between 2014 and 2017 by the IRS and MN Department of Revenue. Of that total amount levied, Dupree still owes over $71,000.
The shocking and disturbing turn of events comes as a massive surprise and disappointment, particularly to those in the legal hemp industry. Adam Wagner, who owns a company called Twin Cities THC, is one of those stakeholders expressing outrage and questioning the process for vetting her initial candidacy.
According to Wagner, something isn't adding up. Why would Walz's office choose someone who appears to have blatantly disregarded the state law for hemp-based THC products to create the regulatory framework and enforcement standards for the legal cannabis market?
"My biggest concern with this is that it completely loses trust in who that person is in the position that they're in. And there's visual proof of it, then it puts a big wrench into who's in that seat," Wagner said.
"My biggest concern with this is that it completely loses trust in who that person is in the position that they're in. And there's visual proof of it, then it puts a big wrench into who's in that seat."
- Adam Wagner, Owner of Twin Cities THC
Another person entirely dumbfounded by Dupree's appointment is Lois Ziolkowski. Describing the woman she knew as Erin Wambach as "dishonest," Ziolkowski could not believe that Dupree had been chosen to run such an important agency, considering her shady dealings in the past.
Ziolkowski won a judgment of $2,500 over a kitchen remodeling project from Dupree in conciliation court in 2021 but has yet to receive any money. "It kind of scares me what she would do in that position. She's not trustworthy," Ziolkowski said.
The entire episode is a perplexing and politically embarrassing fiasco for Walz and the supporters of the cannabis reform movement in Minnesota. Nowadays, with advancements in technology and EVERYTHING being available via a few simple keystrokes, it is unfathomable how someone as unqualified and disreputable could sail through the vetting process to almost head one of the most critical positions in Minnesota's burgeoning marijuana industry.
Steven Brown, a representative from Nothing But Hemp, expressed his initial enthusiasm upon learning that a small business owner had assumed the Director position. However, his excitement was tempered after uncovering information regarding her compliance issues. Brown revealed that his understanding was that the Bureau of Cannabis Administration (BCA) had thoroughly vetted applicants, conducting extensive background checks, including interviews with neighbors, friends, and former colleagues. He pointed out that he was perplexed by the oversight of non-compliant products and admitted a lack of comprehension regarding tax-related matters in the situation.
"Minnesota must find the right person for the Director role to govern the cannabis industry fairly and properly. I hope the next director will be properly vetted and does not have ties to big marijuana or any low-dose hemp company. This new director needs to be non-basis and help protect Minnesota consumers from harmful products and support Minnesota cannabis businesses in safe innovations."
- Steven Brown CEO, Nothing But Hemp, LLC
Furthermore, the microscope scrutinizing the Walz administration will only be magnified more intensely moving forward as he decides on a replacement for Dupree. Cynics among those activists observing the proceedings will be very interested to see if the next director chosen has a background similar to the hemp-based one of Dupree's or if the new leader will be more closely affiliated with Big Cannabis and the multi-state operators (MSOs) so many of them fear swooping in to take over the market.
No matter who Walz chooses, one thing is sure. They will have to have a much less checkered and dubious past than the one now on full display for the first director of the OCM, who managed only to hold the position for a single day.