In Virginia and Washington, D.C., Federal Prosecutors Target Marijuana Delivery Services

A Washington, D.C. man faces up to twenty years in prison for running a marijuana delivery service while hiding black market revenues, while Virginia once again delays the legalization of marijuana.

The indictment states that Connor Pennington, together with his brothers Solomon and Hayden, and their business partner, operated JointVentures out of a D.C. apartment. At first, charges of conspiracy to distribute restricted narcotics were also brought against the three, along with the office managers they had employed.

D.C. and Virginia, where the company was based, have decriminalized possession of small amounts of cannabis as well as home growing, despite the fact that federal law still prohibits the sale of the drug. However, it is still against the law in both locations to sell marijuana, and Republicans in Virginia have stymied attempts to launch a legal retail market in the state.

However, when Pennington pled guilty earlier this year, federal prosecutors dismissed the distribution allegations.

The main thrust of their case against him was his alleged violation of banking and commercial laws.

Pennington reportedly incorporated JointVentures to engage in “e-commerce sales of smoke shop accessories,” according to a statement of facts. According to the statement, the company mostly dealt in cash and had a distribution system “similar to food delivery services like UberEast or DoorDash.” The company’s “professional” website has since been taken down.

According to corporate records, cash flow was over $1.4 million in 2018, and over $2.3 million in 2021, after only three-quarters of commercial operations.

Finally, Pennington and the others pled guilty to financial crimes rather than narcotics felonies.

The companies consistently transferred monetary sums of less than $10,000 into a number of interconnected bank accounts due to the fact that their product was and is unlawful under federal law.

Pennington wrote in an internal email that the company “is not making any sales to vendors in white markets and to be honest we probably won’t be doing distribution anytime soon in the legal market,” therefore all transactions for marijuana and staff wages had to be handled in cash.

An earlier sentencing memorandum for another member of the so-called money-laundering conspiracy included the following statement from defense attorneys: “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.”

Because of their lack of criminal history and the fact that they ran a lawful company in a region where “legalized usage [of] marijuana is already the societal standard,” defense attorneys for the Penningtons and the other defendants claimed that their clients should be given probation and time served.

However, prosecutors disagreed and asked for a six-month term. They acknowledged in their own sentencing letter that this was a significant reduction from the sentencing guidelines’ recommended minimum of 46 months in prison, but argued that incarceration was still required to “encourage respect for the law.”

Pennington’s sentencing hearing is scheduled for May.