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Judge dismisses Medford lawsuit alleging MADGE seized hemp, not pot

A federal judge has thrown out a Medford man’s lawsuit accusing two narcotics detectives and the city of Medford of seizing and destroying multiple marijuana plants without testing them, telling the man he needs to beat his still-pending criminal case before he can sue police for six figures.

Michael Edward Canoose, 64, of Medford wants to sue the city of Medford and two Medford Area Drug and Gang Enforcement task force detectives for $275,000 on allegations that Medford police Det. Chris Dode and Oregon State Police Det. Nick Neville seized and destroyed legal amounts of medical marijuana and industrial hemp during an October 2017 raid that cost Canoose thousands.

The lawsuit alleges that Canoose’s 145 hemp plants were worth $150,000, his hemp seeds were worth $100,000, his 10 medical marijuana plants were worth $12,000, his recreational marijuana was worth $8,000, and his firearms seized were worth $5,000.

The lawsuit further sought to recoup lawyer fees “resulting from Neville’s and Dode’s false statements,” which Canoose’s lawyer, James Leuenberger of Lake Oswego, estimates at $100,000.

The case has similarities to a $2.5 million lawsuit in U.S. District Court filed against Josephine and Jackson counties for a raid at a Williams warehouse earlier this year leased to Oregonized Hemp LLC, in which business owner Justin Pitts alleges police unlawfully destroyed “not less than $2 million” worth of industrial hemp.

What sets the two lawsuits apart, however, is that Pitts has not been charged with a crime, while Canoose faces felony drug charges stemming from the Oct. 19, 2017, raid at 9511 Sterling Creek Road outside Jacksonville.

On Tuesday, U.S. District Court Magistrate Judge Mark Clarke dismissed Canoose’s lawsuit because the federal court cannot consider the civil case until the closure of the state’s criminal case.

Canoose is charged in Jackson County Circuit Court with unlawfully possessing more than 60 grams of psychedelic mushrooms along with unlawfully manufacturing, delivering and possessing marijuana.

Leuenberger, also Canoose’s criminal defense lawyer, has made similar arguments since the summer of 2019 in the Jackson County case seeking to have the state throw out illegal marijuana charges against Canoose. He makes similar claims that most of the plants seized were industrial hemp, not marijuana.

The Jackson County District Attorney’s Office said Canoose never asserted to law enforcement that any of the plants were hemp, nor did detectives find evidence pointing to the plants being hemp. Further, Canoose didn’t have a license from the Oregon Department of Agriculture, as was required for growing hemp at the time of the raid.

“Even if the fact that the plants were hemp were true (and the state disputes that it is), if no such evidence pointed toward the plant being hemp at the time Detective Neville sought the search warrant, then the legitimacy of the probable cause for the warrant would be in no way affected,” the brief filed Aug. 21 by the District Attorney’s Office stated.

A MADGE search warrant served on Canoose included evidence that Canoose was the subject of a years-long FBI investigation into illicit marijuana sales from Southern Oregon over the “dark web.” The dark web is a part of the World Wide Web that is not indexed on popular search engines such as Google, and is accessible only with special software that add layers of anonymity.

FBI Office of Cybercrimes investigators accuse Canoose of selling millions of dollars worth of bulk marijuana under the name “BudCentral” from 2013 to 2017 through online criminal marketplaces that include Silk Road and AlphaBay.

In the summer of 2017, the FBI arrested a Ronald L. Wheeler III, of Elgin, Illinois, who worked with BudCentral since 2013 and cooperated with investigators. The FBI assumed Wheeler’s identity of “Trappy” from July to October of 2017. Wheeler pleaded guilty to a charge of conspiring to commit access device fraud in 2018, and is serving a 46-month prison sentence, U.S. District Court records in Atlanta show.

Wheeler allegedly told the FBI that BudCentral made tens of thousands of dollars per week, and had made millions of dollars since the FBI in 2013 shut down Silk Road, arguably the best-known dark web drug marketplace.

The FBI says they tied BudCentral to Canoose based on $541,580 in Bitcoin withdrawals in 2013 that were transferred to Canoose’s accounts in Medford and Renton, Washington, and a customer support email to the Bitcoin exchange Bitstamp in which Canoose allegedly identified himself as the account holder.

Leuenberger disputes the relevance of the FBI investigation on Canoose’s criminal case in Jackson County Circuit Court. No federal charges were ever filed in U.S. District Court against Canoose.

No trial date has yet been set in Canoose’s criminal case. The next pretrial conference is set for June 5.

Reach reporter Nick Morgan at 541-776-4471 or nmorgan@rosebudmedia.com. Follow him on Twitter @MTCrimeBeat.

A Medford man will have to resolve his marijuana charges in Jackson County Circuit Court before he can sue narcotics officers a judge ruled Tuesday in U.S. District Court in Medford.