A Colorado logistics company is seeking the return of nearly $165,000 in cash seized by a Kansas sheriff’s department, arguing that the money is from legal marijuana sales and should not have been taken by law enforcement officers. After being collected from Missouri medical marijuana dispensaries, the cash was taken from Empyreal Logistics employee during a Dickinson County traffic stop in May 18.

The U.S. Attorney’s office for Kansas filed a civil asset forfeiture case in the matter, claiming in court documents that the cash is subject to seizure because of alleged violations of federal laws against manufacturing and distributing drugs, according to media reports. However, the unidentified driver has not been charged.

Drug Enforcement Administration Special Agent Bryson Wheeler wrote in an affidavit filed in the forfeiture case that the approximately $165,620 was seized from a Ford Transit van owned by Denver-based Empyreal Logistics by Dickinson County Sheriff’s Deputy Kalen Robison during a traffic stop along I-70. Robison pulled the vehicle over on the same day as the forfeiture case for a minor traffic offense. 

The driver claimed that she had been collecting cash from marijuana dispensaries in Kansas City and Missouri. She was also transporting it through Kansas to Colorado credit unions. Missouri approved a constitutional amendment that legalized medical cannabis in 2018. However, Kansas remains the only state without legalization. 

The driver was released and put under surveillance by DEA agents, who observed her “stopping at and entering multiple state marijuana dispensaries” in Missouri. Robison stopped the van again on the interstate the day following the first traffic stop. According to the witnesses, the reason for Robison’s second stop was not mentioned in the affidavit. Topeka Capital-Journal

Five bags of cash were seized by law enforcement officers during a traffic stop in May 18. The driver claimed they came from Missouri cannabis dispensaries. A police canine unit later “alerted to the odor of marijuana coming from the currency,” the DEA agent wrote, and “marijuana is a controlled substance and illegal under both federal and Kansas state law.”

Empyreal Logistics attorneys claimed in court papers that the cash was to be returned to Empyreal Logistics. This disputed federal prosecution claims that the money was linked to drug trafficking.

“Plaintiff’s claims should be barred as the conduct which generated the Defendant property was lawful under Missouri state law and tacitly or affirmatively allowed by the action of the United States Federal Government,” the company’s lawyers wrote.

A Cash-Based Industry: The Perils

This case by Empyreal illustrates the problems faced state-legal cannabis companies that must operate in cash due to federal money-laundering and drug laws. On its website, the firm promises to address the challenges of operating in a cash-only industry with solutions including “low-profile, eco-conscious, armored vehicles.”

“With our state-of-the-art facilities, secure currency processing, and management services, we safely and securely manage the cash assets of hundreds of enterprises across multiple industries so they can concentrate on managing their operations,” the company wrote in a press release unrelated to the asset forfeiture case. “Empyreal uses data and intelligence tools to help maximize our cash solution, with the goal of changing the way clients think of secured transport.”

Arshad Lazi, chief executive of Nirvana Group cannabis dispensary operator, said that legislation called the SAFE Banking Act would enable financial institutions to give traditional banking services for state-legal cannabis companies. The Senate is yet to approve the legislation.

“Providing licensed cannabis businesses with the opportunity to bank in a traditional manner and not be limited to dealing in cash is crucial,” Lasi wrote in an email. “Banking allows companies to remain compliant, helps them avoid liabilities, among other benefits including safety and security.”

“I’m hopeful that the SAFE Banking Act will pass in the Senate, as its passage will also boost the cannabis industry’s reputation as a legitimate and major player in states’ economies,” Lasi added.

Lex Corwin, founder and CEO of California cannabis cultivator Stone Road, said that forcing legal cannabis companies to operate on a cash-only basis is “ridiculous and harmful” and called on lawmakers to pass the legislation.

“The SAFE Banking Act would give an already legal industry the legitimacy it needs and that it’s honestly due, especially since the government has no issues collecting said cannabis businesses’ money in cash,” Corwin told Chronic News. “Cash dealings are also a huge liability and personal safety issue––the biggest instances of injury and death are around cash pickups and dropoffs, ultimately putting people trying to play within the legal system in harm’s way.” 

U.S. Magistrate Kenneth Gale scheduled a hearing in Empyreal case regarding asset forfeiture for January 4. The DEA national public affairs office and a spokesperson for the U.S. Attorney’s Office for Kansas declined to comment on the case to local media, citing the pending litigation.