Work starts at East St. Louis pot farm, despite lawsuit

Progressive Treatment Solutions still lacks a license to do business in East St. Louis. Nor has it obtained any financial incentives from the city to defray the cost of rehabbing its facility at 737 Locust St. to make it into the metro-east’s first medical marijuana farm.

Nonetheless, work inside the former U.S. Cellular data center north of downtown and just off Illinois 3 is moving at full-tilt to get the site ready for its first crop of medical cannabis.

One afternoon a few days ago workers were hauling enormous tubes of shiny aluminum across the building’s floor. Other workmen stood atop a scaffolding to attach heavy-duty cables and wire to the ceiling. Near the entranceway, a worker sat behind the controls of a mini-excavator, which clawed out a shallow trench in the concrete floor.

How long these crews can continue their work for Progressive, though, will depend on the outcome of a lawsuit filed in Lake County, located in suburban Chicago, late last week.

The lawsuit alleges Progressive’s chief outside consultant, a Denver businessman named Kayvan Khalatbari, schemed to monopolize the state’s nascent marijuana industry by illegally obtaining controlling interests in Progressive and two other Illinois cultivation centers, in violation of regulations that govern the state’s pilot medical cannabis program.

Filed by Medponics Illinois, of Waukegan, an unsuccessful applicant for a cultivation license, the lawsuit alleges that Khalatbari and his company, Denver Relief Consulting, entered into pacts with Progressive Treatment and another cultivation licensee, Cresco Labs, “in a scheme to control and profit from more than three different cannabis cultivation centers,” according to a story from Associated Press, which interviewed Medponics attorney Kathleen McDonough.

Cresco and Progressive have been granted, between them, four cultivation permits and could be granted a fifth one.

Khalatbari, an entrepreneur who started a Denver pizza chain called Sexy Pizza, denied in an email to the News-Democrat that he violated any Illinois rules.

Khalatbari wrote that he doesn’t “wish to entertain the absurdity” of the Medponics lawsuit and other claims made against firms linked to his firm.

“It’s unfortunate that these irresponsible lawsuits persist as a distraction to this very serious process at hand, the goal of which is to be able to provide safe and consistent medical cannabis to qualifying patients in Illinois as soon as possible,” he wrote. “This misinformed public slander of my character and my ethical values will only slow that down, not stop it, and I'm confident this process and the revelation of the facts surrounding these claims will dismantle these accusations and allow me to help this state realize that goal.”

Khalatbari referred specific questions to Christine Heck, Progressive’s top executive. Heck, a doctor of podiatry near Chicago, did not return calls seeking comment.

“I don't have the authority or position to speak about PTS and their operations,” Khalatbari wrote. “I am simply an advising consultant that has given them the tools they need to make their own decisions and implement their own plan. As a consultant with zero authority to make decisions or speak to the media on their behalf, I must defer to them on this request.”

Progressive has yet to apply for a business license with East St. Louis, nor have hearings been scheduled regarding plans to use the site for a medical marijuana farm, according to Deletra Hudson, the city manager.

Meanwhile, big changes continue to roil the political climate regarding medical marijuana, both nationally and in Illinois.

Congress, for instance, late last year with its 2016 budget quietly ended its ban on medical marijuana with a provisioin that would allow the 23 states where medical pot is legal to no longer worry about federal drug agents busting retail outlets. Agents would be prohibited from doing so, according to the budget provision.

What’s more, the U.S. Senate Appropriations Committee last week advanced a $77.6 billion funding bill for military construction and veterans benefits that includes an amendment allowing Veterans Affairs doctors to recommend the use of medical marijuana for such chronic conditions as post-traumatic stress disorder.

And last week, under the leadership of Sen. Bill Haine, D-Alton, the Illinois Senate extended the Compassionate Use of Medical Cannabis Pilot Program to four years from the date the first medical cannabis dispensary gets registered by the Department of Financial and Professional Regulation.

In February, with the approval of the Governor, DFPR issued authorizations to 51 medical cannabis dispensaries. These dispensaries have until June 2 to be officially registered to operate. Therefore, the proposal championed by Haine will likely extend the MCPP an extra 18 months.

This story was originally published May 23, 2015 at 4:14 PM with the headline "Work starts at East St. Louis pot farm, despite lawsuit."