Sacto 9-1-1
May 31, 2013
Stockton man pleads guilty to operating marijuana businesses in Sacramento

A Stockton man pleaded guilty today to operating multiple marijuana businesses and cultivation sites, including four in Sacramento.

Matthew Davies, 35, entered the plea in federal court in Sacramento before U.S. District Judge Garland E. Burrell Jr. Davies pleaded guilty to one count of conspiring to manufacture and distribute marijuana, two counts of manufacturing marijuana in connection with two separate indoor marijuana grow operations and seven counts of distribution of marijuana, according to a federal Department of Justice news release.

According to the plea agreement filed today, Davies, along with co-defendant Lynn Farrell Smith, 62, of Stockton, owned and operated various marijuana businesses. One of the two marijuana manufacturing operations was a sophisticated indoor growing facility involving thousands of plants in a warehouse on Vickie Lane in Stockton. Stockton Police officers responded to a report of a burglary in progress at warehouse and found more than a dozen workers inside trimming plants. The discovery led to a federal investigation, and a search warrant was executed at the location.

According to court documents, the investigation revealed that in addition to the marijuana growing operations, Davies and Smith owned and/or operated seven marijuana storefront businesses in Stockton and Sacramento between 2009 and 2011.

The businesses generated substantial revenues. According to federal authorities, profit and loss statements obtained during the course of the investigation showed that Pathways Family Health Cooperative in Stockton generated more than $2.2 million in marijuana sales in less than a year. It was closed in 2010 by the city of Stockton. Records also showed that the Central Valley Caregivers Cooperative, which Davies and Smith owned and operated in Stockton, generated more than $4.5 million in gross sales in 2011 before federal search warrants were executed in October of that year.

In Sacramento, the MediZen business generated $2 million in gross sales of marijuana during the same period, authorities said.

During 2011, Davies also purchased a 50 percent interest in Port City Wellness in Stockton for $200,000. It was briefly open in September and October 2011, officials said.

During 2011, Davies and Smith also managed and operated River City Wellness and R&R Wellness, renamed Sacramento Patient's Group, and purchased and operated Twelve Hour Care dispensary. These three marijuana businesses were in Sacramento.

They also briefly operated a marijuana business in Manteca before it was closed by the city of Manteca.

Davies is to be sentenced by Judge Burrell on Sept. 27. The plea agreement, if accepted by the court, calls for a sentence of five years in prison. The government also intends to seek a substantial fine, and the plea agreement reflects that Davies has already voluntarily forfeited $100,000, officials said.

Smith pleaded guilty Jan. 18 to similar felony charges relating to the manufacturing of marijuana and six counts of distributing marijuana from storefront businesses in Stockton and Sacramento, according to the news release. Another co-defendant, Robert Duncan, 30, of Stockton, pleaded guilty Sept. 21, 2012, to marijuana cultivation.

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