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United States District Court for the Western District of Washington
August 28, 2019, Decided; August 28, 2019, Filed
Case No. 2:18-cv-01434-RAJ
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS
This matter comes before the Court on Defendant Leonid Gontmakher's Motion to Dismiss (Dkt. # 6). Defendants Cannex Capital Holdings, Inc. and Northwest Cannabis Solutions d/b/a NWCS425.com join the Motion. Dkt. # 14. Having considered the submissions of the parties, the relevant portions of the record, and the applicable law, the Court finds that oral argument is unnecessary. For the reasons stated below, Defendant's Motion is GRANTED.
The following is taken from Plaintiff's Complaint [*2] (Dkt. # 1), which is assumed to be true for the purposes of this motion to dismiss.1 Sanders v. Brown, 504 F.3d 903, 910 (9th Cir. 2007). Plaintiff Evan James Polk ("Mr. Polk" or "Plaintiff") and Defendant Leonid Gontmakher ("Mr. Gontmakher" or "Defendant") are in the cannabis business. In late 2012 or early 2013, Mr. Gontmakher approached Mr. Polk about starting a cannabis growing and processing business in Washington. Dkt. # 1 at ¶ 3.2. At the time, Washington voters had just passed Initiative 502 regulating the production, distribution, and sale of marijuana and removing related state criminal and civil penalties—codified in the Washington Uniform Controlled Substances Act as RCW § 69.50.
Under RCW § 69.50, individuals or entities intending to produce, process, or distribute cannabis must obtain either a producer/processor license or a retail license from the Liquor and Cannabis Board ("LCB"). RCW § 69.50.325. There are, of course, restrictions to who can obtain these licenses. Individuals with a criminal history are generally restricted from obtaining a license if they have 8 or more points under the LCB's point system. WAC 314-55-040. Felony convictions are assigned 12 points, while misdemeanors are assigned 4 or 5 points. WAC 314-55-040(1). During the application [*3] process, prior state or federal convictions may be considered for mitigation on an individual basis. WAC 314-55-040(3)(b).
Mr. Polk and Mr. Gontmakher initially launched their growing operation from a relative's house. Dkt. # 1 at ¶ 3.4. After the new cannabis regulations were promulgated, they decided to purchase a producer/processor license. Dkt. # 1 at ¶ 3.3. But they soon ran into a problem. Prior to starting the business with Mr. Gontmakher, Mr. Polk pled guilty to possession of marijuana with intent to dispense in Virginia (a felony), and possession of drugs in Nevada (a misdemeanor). Dkt. # 7, Exs. A—C. As such, he was prohibited from obtaining a producer or processor license under WAC 314-55-040(3)(b), absent mitigation of his criminal convictions. After Mr. Polk and Mr. Gontmakher realized that Mr. Polk could not be listed as an owner of their licensed business, Northwest Cannabis Solutions ("NWCS"), they agreed to move forward with the business anyway, orally agreeing to be "equal partners" in their cannabis growing venture. Id. at ¶ 3.5. They ultimately agreed that Mr. Polk would receive a 30% ownership interest in NWCS, Mr. Gontmakher would receive a 30% interest, and the [*4] other investors would receive a 40% interest. Id. at ¶ 3.10. Mr. Polk's "interest" would be held in the name of one of Mr. Gontmakher's relatives. Id.
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2019 U.S. Dist. LEXIS 146724 *; 2019 WL 4058970
EVAN JAMES POLK, a/k/a JAMES MOZROK, an individual, Plaintiff, v. LEONID GONTMAKHER, and JANE DOE GONTMAKHER, husband and wife, and the marital community composed thereof; CANNEX CAPITAL HOLDINGS, INC., a Canadian corporation; NORTHWEST CANNABIS SOLUTIONS, d/b/a NWCS425.COM, a Washington cannabis licensee; JOHN DOES 1-10 and JANE DOES 1-10, husbands and wives, and the martial communities composed thereof; and XYC LLCs 1-10, Defendants.
Subsequent History: Dismissed by, Without prejudice Polk v. Gontmakher, 2020 U.S. Dist. LEXIS 89872, 2020 WL 2572536 (W.D. Wash., May 21, 2020)
Dismissed by Polk v. Gontmakher, 2021 U.S. Dist. LEXIS 53569 (W.D. Wash., Mar. 22, 2021)
cannabis, license, federal law, allegations, marijuana