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Pot shop opens amid fraud claims

Former Jackson County Commissioner Doug Breidenthal, under investigation for allegedly taking cash payments for marijuana consulting while in office, has opened a west Medford cannabis store even though it remains entangled in a civil suit claiming he misappropriated funds from investors.

Breidenthal was standing behind a counter with marijuana jars around him and serving a customer Friday when representatives from the Mail Tribune entered, but he stepped into the back of the store.

Mike Welch, owner of two cannabis stores, including Wicked Flowers in Medford, said he is the interim general manager appointed by Jackson County Circuit Judge Ron Grensky while the legal issues between Breidenthal and investors are worked out. 

"I was asked if I would do it for them, and the judge didn't seem to have a problem with it," he said. 

Welch, who has been in the cannabis business for 20 years and owns Puff's Smoke Shop in Ashland, said he and his staff are getting paid, but Breidenthal is not.

"I make a little money, and the employees are happy," he said. 

Money from the operation also pays for the lease on the building as well as utilities, but the profits are not being dispersed to those involved in the legal action, Welch said. 

"The money is put in a separate account," he said. 

The store, at 2131 W. Main St., opened about two weeks ago. A new sign in the parking lot was installed this week, and a sandwich-board sign in the front advertises cannabis at $3 a gram. 

Welch said the low price reflects the abundant supply of marijuana in the valley right now.

Breidenthal, who criticized marijuana-related activities as a county commissioner, tried to open American Cannabis in February, but Greg Allen and two other investors in the store filed a lawsuit against him alleging he misappropriated funds. 

When Breidenthal applied for a license for the marijuana business Nov. 9, 2016, he didn’t list other investors, including $150,000 from Lawrence and Mary Nelson of Arizona he received that same day. The money was received through another Breidenthal business called Capital Pacific Advisors.

Breidenthal is under investigation by the Oregon Government Ethics Commission for questions about a special account set up through the Association of Oregon Counties and because of videos showing Breidenthal allegedly taking cash payments for marijuana consulting while still a county commissioner.

Ethics Commission investigator Michael Thornicroft said he uncovered “substantial objective evidence” that Breidenthal violated ethics laws between August and December 2016, when he allegedly received $45,000 in cash payments from Greg Allen for marijuana consulting and to help open a marijuana business in Medford.

In a statement Breidenthal gave to the Ethics Commission, he said he had contacted the Ethics Commission to avoid any possibility of a conflict of interest in his marijuana business.

“A check of Commission records did not reveal any written advice was given to Mr. Breidenthal,” an Ethics Commission review states.

Lawyers for Breidenthal and for Greg Allen could not be reached for comment Friday.

— Reach reporter Damian Mann at 541-776-4476 or dmann@mailtribune.com. Follow him on www.twitter.com/reporterdm.

The American Cannabis Co. is open for business on West Main Street in Medford. [Mail Tribune / Jamie Lusch]