Nevada marijuana entrepreneur makes cameo in California indictment

By Conor Shine

Friday, Aug. 14, 2015 | 2:59 p.m.

The CEO of Nevada's largest medical marijuana operator had several interactions with a figure at the center of a growing corruption scandal in California's marijuana industry that led to a federal indictment of a prominent union organizer earlier this week. Derek Peterson, the CEO of Terra Tech Corp., is not charged with any wrongdoing.

Terra Tech has been granted Nevada state licenses to operate four dispensaries, two cultivation centers and two production facilities in Reno and Las Vegas. Peterson has not been implicated in the charges, but this week’s indictment reveals a seedier side to the fast-growing industry.

The indictment charged Dan Rush, a leader of California's legalization effort, with bribery and labor fraud. Until he was fired this week, Rush was an organizer with the United Food and Commercial Workers.

Rush is accused of taking a $600,000 loan that he never repaid from Martin Kaufman, an Oakland dispensary operator, in addition to unlawfully undermining unionization efforts at dispensaries.

Several conversations between Peterson — a partner in Kaufman’s Oakland dispensary — and Rush appear in the indictment, in which Rush allegedly promised to block unionization efforts at Nevada dispensaries operated by Kaufman and Peterson. He also advised Peterson on how to commit unfair labor practices, according to the affidavit.

Kaufman has been cooperating with federal investigators since 2013 and will not be prosecuted.

The affidavit also details an April 2014 meeting between Peterson and Marc Terbeek, an Oakland attorney who worked with Rush, in which Terbeek allegedly threatened Peterson and Kaufman if they tried to recoup the $600,000 loan. Terbeek allegedly gave Peterson a two-page memo stating that the loans were part of a deal involving "unclean hands to launder (medical marijuana) money.”