A Canadian firm has canceled a roughly $8.3 million purchase of a marijuana cultivation facility in Auburn from a businessman who is linked to a federal marijuana trafficking and money laundering investigation.
C21 Investments, based in Vancouver, said in a June regulatory filing that it terminated the deal with businessman Kevin Dean because of a law modifying rules for recreational marijuana in Maine. C21 officials did not return phone calls seeking comment, but the law stands to limit the size of the market.
The news also comes as federal investigators apparently are looking into Dean’s medical marijuana investments, including businesses he operated with 33-year-old Brian Bilodeau of Auburn. A grand jury in June indicted Bilodeau on two drug-trafficking felonies tied to his alleged use of Dean’s cultivation facility in Auburn for an illegal marijuana grow.
Bilodeau pleaded not guilty to the charges. The federal government has not charged Dean with any crime, and he denies involvement in any illegal activity.
Federal authorities said the charges against Bilodeau were part of an investigation of a larger trafficking ring that illegally grew marijuana “under the cover of, but in violation of, Maine’s Medical Marijuana program” and laundered the proceeds. A Bangor Daily News investigation in May found a number of financial ties not only between Dean and Bilodeau, but also with real estate companies Dean and his longtime business partner, Emile Clavet, co-owned.
In response to a lawsuit filed against Dean by Clavet, Dean’s attorneys provided the latest indication that their client is part of the federal investigation.
Clavet alleges Dean cheated him out of about $3 million as they unwound their joint ventures and sold off a marina in Port Aransas, Texas. Dean and his wife used two companies that owned the marina to invest in various marijuana enterprises, including a marijuana growing operation at the former paper mill, Auburn Cascades Fiber.
In recent court filings, Dean asked a judge to bar Clavet from discovering details about his marijuana businesses and his ties to targets of the federal investigation.
Among other questions about Dean’s marijuana businesses, an attorney for Clavet had requested from Dean all communications with Bilodeau “relating to the growing, manufacture or sale of marijuana or to any investigation by law enforcement regarding such activities.”
The request came after the court in May granted Clavet a constructive trust over about $3 million generated in the marina sale. The move reserves for Clavet a claim to that amount of property held by the defendants, should he win his case.
Dean’s attorneys acknowledged in court filings that Dean’s marijuana investments are of interest to federal investigators, but they disputed the investigation’s relevance and impact on the case.
They dismissed Clavet’s claim that the investigation gives Dean a motive to hide or dispose of assets from the marina sale, which they deemed “rank speculation and highly offensive.”
Dean’s attorneys wrote that Clavet only sought to probe the issue “to annoy, embarrass and oppress the Deans” with the ultimate goal of “mak[ing] the Deans more amenable to a resolution on Clavet’s terms.”
“[T]he federal government’s interest in Kevin Dean’s marijuana is utterly irrelevant to this case,” his attorneys wrote. “Clavet should stick to his job; the government can handle its own duties.”
Dean’s attorneys did not respond to a request for comment to clarify Dean’s status in the investigation. A spokesman for the U.S. attorney in Maine declined to comment Friday.
Justice Michaela Murphy ruled last month that the chain of transactions from the Texas marina sale to the marijuana investments makes them fair game for inquiry.
But many new records aren’t likely to see the light of day. In a routine move for an unusually heated business dispute, the court on July 25 approved a confidentiality order that will keep most new filings in the case under seal.
Maine Focus is a journalism and community engagement initiative at the Bangor Daily News. Questions? Write to email@example.com.