The Syndicate: Podcast Exposes Biggest Black Market Pot Bust in US History

The Syndicate: Podcast Exposes Biggest Black Market Pot Bust in US History

CANNABIS CULTURE –  Skydiving drug smugglers, a multimillion-dollar empire, massive warehouses and more — and all right under the nose of the Feds.  Sound exciting?  Chris Walker thought so, and his following of the story, that of a group now referred to as “The Syndicate” in Colorado, has led to an award-winning podcast by the same name that tells a story for the ages.

Chris Walker – Investigative Journalist, Creator and Host of The Syndicate Podcast (Photo Credit Jake Holschuh)

“I wanted to know why anyone would specifically come to a state with legal cannabis, in this case, Colorado, to set up an illicit growing and smuggling operation when it seemed that the regulated industry was thriving. Moreover, I was curious to find out just how this ragtag group of college friends and family members built one of the most sophisticated smuggling rings of the past decade,” said Walker in a recent interview with Cannabis Culture Magazine. 

While this story is full of intrigue and drama, one of the most incredible themes throughout is how the legalization of marijuana at many State levels while remaining illegal at the Federal level has actually led to the advancement and innovative adaptation of drug smuggling and the cannabis black market.  

Credit Colorado Department of Law – Mugshots of the 32 people indicted in the 2015 bust of The Syndicate

In 2015, The Syndicate was caught with thousands of pounds of marijuana being transported from Colorado, where it was legal, to Minnesota, where it definitely was not.  But why would an organization take the risk of growing weed and transporting it across state lines to areas where it was illegal?  The answer, of course, came down to money.  Naturally there was also the thrill of the adventure, but when one can potentially make hundreds more per pound on the black market than they could selling to dispensaries, it certainly becomes tempting to look beyond the rules and take the risks.  And that is exactly what The Syndicate did under the leadership of Tri Nguyen.  

Tri Nguyen’s mugshot from the Denver drug bust in 2015.

Nguyen had always had an interest in growing and selling cannabis, starting as early as the late 90s.  He saw that the weed available on the black market was usually “ditch weed,” and that there was a demand for high-quality craft cannabis.  He moved to Colorado, and using a lighting company as a front, managed to set up an entire garage into a massive grow op.  Nguyen honed his strains and processes and recruited select people with growing skills, organizational abilities, and sometimes just straight-up criminals to help make his small-time idea one of the biggest illegal growing operations that the United States has ever seen.  

As legalization came with extreme regulations, Nguyen saw an opportunity to exploit a loophole in the Caregiver Law.  According to the Caregiver Law, a caregiver could grow marijuana for the exclusive use of up to 5 patients, and each patient could be grown 24-99 plants. Some government officials worried that without limiting the number of patients a caregiver could provide to, the weed would end up making its way to the black market, which was the reason for the 5-patient limit.  Of course, this was small time business and meant very little money, so people were not exactly flocking to become caregivers.  In 2008, only 9000 Coloradans had registered for medical marijuana, and finding a caregiver was next to impossible when most had already hit their 5-patient limit.  

However, when one man, Damien Lagoy, sued the state, everything changed once again.  Lagoy showed the court how many pharmaceuticals he had to take daily just to stay alive, and how only marijuana allowed him to be able to take this amount of medication and hold it down.  He had been unable to find a caregiver, and the judge was more than sympathetic.  He overturned the 5-patient limit and allowed caregivers to help as many patients as possible once they were approved.  This led to a massive expansion of dispensaries and growing locations.  As more and more patients began to get approval for medical marijuana, the increase was too rapid to allow for proper “vetting” of patients and their caregivers.  The government simply did not have the resources to properly investigate everyone, and some growers were growing up to 99 plants per patient, so this was a massive win for medical patients, but there was definitely the opportunity for exploitation, which is definitely what Nguyen did.  

Surely with this sudden ruling it would at least take some effort to qualify as either a patient or caregiver?  Surprisingly, the answer was no.  As it turns out, it was an easy task to find a doctor who would simply take your vitals and give you a medical marijuana card for a small fee, usually less than $30.  An obvious scam, but law enforcement did nothing to control it or stop it.  At this point a patient could grow 24-99 plants for their own personal use.  Then all one had to do was go get their caregiver license for their patients, meaning with a license and medical marijuana card, a person could legally grow up to 144 plants with no issues.  To become a caregiver, a patient simply had to see a doctor with their intended caregiver, acknowledge verbally their intent and that they knew each other, and they would be approved.  It did not matter if the individuals had growing experience, how long they had lived in the state, and there were no criminal background checks done.  

Nguyen was able to take advantage of this new law by opening a large 18-room warehouse, with each of his hired caregivers being allocated their own room to grow their plants.  On paper it seemed totally legitimate, and it was all being done right in front of authorities with no suspicion.  In each of these 18 rooms, marijuana plants were grown in different stages according to a very intricate logarithm created by one of Nguyen’s sisters, and the process she developed was so effective that many of these plants would produce upwards of 3 pounds of dried, smokable cannabis per harvest/life cycle.  This was a far cry from the average 1-2 pounds that other grow operations were able to produce.  Obviously no patients were smoking this much on their own.  And the rent, utilities, and other overhead would have been high, the smell overwhelming.  So how did Nguyen get around this? 

Inside one of The Syndicate’s large grow rooms (Credit Jake Holschuh)

After the plants were harvested, the patients would receive about 2 ounces of product, and the rest would be given to Nguyen.  He would then pay the caregivers cash and request that they go pay their “rent” for their rooms in cash, usually in the form of money orders so that their names would appear on these “rental payments” in increments of $999 or less.  In other words, he was able to launder the money through this rental setup without turning any heads, and it appeared that the caregivers were just paying for their space actually owned and operated by Nguyen and his team.  Even electric bills were simply paid in cash at big box stores like K-Mart so that no suspicion would be raised.  And as for the smell, the warehouse was camouflaged by being built in an industrial zone where many other grow locations were legally operating.  It seemed like the perfect setup.  

Of course, word of Nguyen’s operations got around on the black market.  There were daring thefts and even run-ins with state police leading to confiscations, throwing suspicion onto some of his employees.  Cops did not seem to care if dispensaries and warehouses supplying cannabis were robbed.  They only cared about the movement of the product.  

Nguyen wanted to try and go legal by supplying dispensaries with his high-quality products or opening his own, but the appeal of the black market money was just too high.  To get a dispensary license at this point though was nearly impossible.  By 2014 the market was completely oversaturated, and the few licenses left went to the highest bidders who could pass strict and complex regulations.  However, he realized that he could no longer continue to rely on drug mules and vehicles packed with large rubberized duffel bags to cross state lines, especially after one daring $600,000 product theft, and the weed just kept piling up.  A plan had to be made, and fast.  He approached Peak MJ, a dispensary that seemed to have the welcoming ideals that he envisioned his product being attached to.  As it turned out, Colorado had implemented a new tracking system after recreational legalization in 2012 to try and prevent black market purchases.  The government introduced “seed-to-sale” where every plant grown by a caregiver must have a serial number and bar code so it could be tracked by regulators.  If Nguyen went legal, all of his current product would have to be destroyed and he would start from scratch.  Millions of dollars would be lost, his employees would have in income, and it would be overall extremely disruptive to the empire he had worked so hard to build.  

All of this seemed unfair to Nguyen.  He believed weed should have never been criminalized in the first place, and certainly did not deserve its federally-assigned Schedule 1 label.  Schedule 1 indicates that the drug would have a high potential for being abused and no medical value.  Marijuana definitely fit closer to Schedule 5, with abuse being rare and a high beneficial medical impact.  But thanks to the Federal government, black market sellers and growers were seen as dangerous and criminal as murderers. 

Skydiver and Syndicate Smuggler Joe Johnson

With hundreds of thousands of dollars on the line, Nguyen decided to team up with local skydiver Joe Johnson to help him move the product and pick up the money across state lines.  He was able to pack massive amounts of marijuana in Colorado, sometimes upwards of 900 pounds, and then return with the cash.  No more theft, no more covertly arranged meetups.  It seemed like the perfect plan.  Until Joe got caught.  

In 2015, Joe was caught with $374,000, a gun, and 66 pounds of marijuana.  He confessed to police everything he knew about Nguyen’s operation, overturning the largest pot smuggling drug ring in Colorado since legalization.  The Syndicate had made 12 million dollars in 4 years, and 32 people involved were indicted.  Thus came the end of The Syndicate.  

It took years for Chris Walker to uncover this story of fascinating group.  As Walker says, “Beyond giving audiences a wild, and true, tale to follow with its fair share of twists and turns, I want people to think about the big picture questions around cannabis legalization. I believe this story is absolutely an argument to legalize marijuana at the federal level (where it currently remains a Schedule 1 substance, deemed as bad as heroin or meth). The schizophrenia between state laws and federal laws around cannabis in the United States is antiquated and untenable. So long as we maintain a patchwork of state laws, with legal pot in some states but not others, and with even more complications between medical and recreational marijuana, there will be an economic incentive to traffic weed from legal markets to illicit markets where marijuana can be sold without taxes or oversight.”  

While The Syndicate certainly provides a sensational story, Walker has brought an important issue to light that we should all consider.  Was this whole thing preventable? Does it make sense to keep cannabis illegal at a federal level while legalizing it in various states, or does this simply fuel the black market to find new and innovative ways to smuggle cannabis? Wouldn’t legalizing across the board be less of a drain on our justice system, taxes, and discourage this kind of criminal activity, putting these people with a clear talent for growing in a position to contribute in a meaningful way to society?  Hopefully by asking these important questions, we can see progress continue to be made in the fight for cannabis legalization.  

To listen to Chris Walker tell the story of The Syndicate on all major podcasting platforms or at https://www.foxtopus.ink/the-syndicate 

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