Atlantic City Hit With $5M Lawsuit Over Cannabis Controversy

Here's the latest on expanding legal issues related to Kashawn "Kash" McKinley, the city of Atlantic City, and the city's cannabis industry.

Kash McKinley, whom Atlantic City Mayor Marty Small called his "point man for growing the resort town’s cannabis industry", is facing federal bribery charges of soliciting and accepting bribes.

In one instance, the bribe payment McKinley is accused of asking for was that a cannabis shop owner would assault another person in exchange for McKinley’s official assistance with his business.

Now, Victor Diaz says he was the cannabis shop owner involved and that he was subjected to illegal conduct during McKinley's running of the city’s cannabis operation, and he is suing the city of Atlantic City for $5 million in damages.

In reporting by The Press of Atlantic City, Victor Diaz's attorney says his client's business, Sweet Leaf Dispensary, was forced to close because of the city's interference.

Diaz claims his rights have been violated, and he has been a victim of a racketeering conspiracy.

Even though Kash McKinley was suspended without pay after September's federal charges, his bio still appeared on the Atlantic City website on Tuesday, where he claims he was selected to handle the city's cannabis business "the right way".

“I have an opportunity to do things the right way with the cannabis industry,” he has said. “We are encouraging and providing tools and resources for locals to have a stake in ownership. I have a vision and a plan and under the mayor’s administration and I am executing it.”

 

The Charges Kash McKinley Is Facing

According to the US Attorney for the District of New Jersey in September, Kashawn McKinley solicited more than $20,000 in cash and marijuana in exchange for his official assistance to a cannabis business owner in connection with the opening of an (at that time) unnamed business and resolving fees owed by the business owner to the City of Atlantic City.

The charges state that, in one instance, McKinley received a bribe payment for his assistance in getting the cannabis business classified as a “micro” cannabis business instead of a standard cannabis business.

That distinction meant that the business paid a $2,500 annual fee to renew its mercantile license instead of the $25,000 annual fee required for standard cannabis businesses.

A Notice of Claim Was Filed Against Atlantic City

Under the New Jersey Tort Claims Act,  in order to file a claim against a New Jersey public entity such as a city to sue them, you must submit a formal Notice of Claim within 90 days of the date the incident or injury occurred.

In a notice of claim filed with the city on Oct. 1 and made public this week when the City Council agenda was posted online, Diaz's lawyer says they were subjected to illegal conduct on the part of the city’s cannabis regulation operation.

Claimants contend that they were subjected to unlawful, arbitrary, discriminatory, retaliatory, coercive, and corrupt governmental conduct arising from the misuse of municipal authority and influence within Atlantic City's cannabis regulatory process.”

"You were never a micro business, bro,” McKinley said, according to court documents. “That's why I'm trynna tell you what I'm doing is illegal. And you're not understanding that. You're not a micro business."

The claim notice asserts that Diaz was harmed by McKinley through damage to his reputation, lost business profits and opportunities, investor interest, and emotional distress.