The Maine State Legislature’s Government Oversight Committee voted unanimously on Friday to investigate a possible conflict of interest between Director John Hudak of the Office of Cannabis Policy (OCP) and a company that does business with the regulatory office following a request from Rep. David Boyer (R-Poland).

“For too long, questions have been raised about the integrity of the processes at the Office of Cannabis Policy, particularly regarding Director Hudak’s past affiliations and potential conflicts involving state-mandated partnerships. I commend the committee for taking swift action to examine these concerns,” said Rep. Boyer in a statement.

“It is imperative that all executive branch employees adhere to the highest ethical standards, and any appearance of bias or conflict undermines our trust in government,” he added.

Boyer explained the apparent conflict of interest, along with other concerns about the OCP, in a lengthy statement presented before the committee.

He outlined what he called a troubling timeline of events surrounding Hudak’s interactions with a former business partner’s company. Hudak granted an additional $350,000 contract amendment to METRC, a company contracted by the state to provide cannabis inventory control and batch tracking.

His former business partner, Lewis Koski, currently serves as an executive for METRC, and also did at the time of the contract negotiations.

Hudak and Koski co-founded Freedman & Koski Inc., which advised the state on its marijuana legalization efforts. After advising Maine on cannabis legalization policy, Koski became Chief Operating Officer and later Chief Security Officer at METRC.

In December 2022, Hudak took over as OCP director, and just months later in April 2023, he negotiated a contract amendment with METRC, bringing their contract up to $890,000.

Although the timeline does not conclusively prove that Hudak was engaged in misconduct, it raises concerns that he may have been intentionally granting a lucrative contract amendment to his former business partner. Boyer pointed out that under Maine law, officials are required to refrain from activity that could create even the appearance of a conflict of interest or impropriety.

“If public confidence in government is to be maintained and enhanced, it is not enough that public officers avoid acts of misconduct. They must also scrupulously avoid acts which may create an appearance of misconduct,” Boyer cited Maine law as mandating.

He asked the committee how Mainers can trust that Hudak negotiated the best deal for Maine taxpayers, impartially, with his former business partner on the other side of the negotiating table, and argued that he should have recused himself from all negotiations involving METRC.

The Oversight Committee agreed that the apparent conflict raises significant concerns and voted unanimously to investigate Hudak.

“This conflict of interest is stunning when you see it all written the way you have,” said Sen. Craig Hickman (D-Kennebec).

“I expect there to be a recusal by a state official from any involvement in a contract where they have a conflict or an appearance of conflict, it’s simple to address concerns, and it would appear that those simple steps were not taken,” said Sen. Jill Duson (D-Cumberland).

OCP has previous told the Maine Wire that Hudak “does not own any shares or interest in Metrc.”

According to Boyer’s testimony, Hudak’s conduct was the impetus for him to raise additional concerns about the OCP’s operations, though members of the Oversight Committee suggested that the other concerns may not fall within their purview.

“Stakeholder feedback indicates that the internal culture at the OCP may be contributing to inconsistent enforcement practices,” said Boyer.

“There have been anecdotal reports of inspectors engaging in intimidating behavior or failing to engage in a supportive manner. I have been told by multiple operators that sometimes the inspectors would request the operator speak to them without their lawyer present,” he added.

He suggested that the conduct of OCP employees and inspectors was hindering the office’s ability to ensure compliance with state marijuana laws.

In one case Boyer highlighted, a seller was told after an investigation by the OCP that he would be allowed to continue with an event. The seller proceeded to host the annual event, but after seeing it advertised, OCP intervened, ordering the seller to cancel it, and issuing him a violation.

Boyer also expressed concern that Anya Trundy, the deputy director for legislative affairs for Maine’s Department of Administrative and Financial Services (DAFS), seemingly admitted to withholding the release of an OCP report that was statutorily required to be released in February of last year.

The representative’s concerns also extended to the OCP’s relations with the hundreds of illegal, Chinese-operated sites across the state. Boyer pointed to Hudak’s own admission to the Veterans and Legal Affairs Committee that OCP has issued lucrative medicinal licenses to individuals associated with organized crime.

Hudak claimed that OCP has no grounds to deny license applications from individuals suspected of having ties to transnational organized crime, though he said the agency does have an internal system for tracking them.

“What we are talking about here is an entirely different class of operation. There have been instances where individuals have applied to our program, our medical program I should note, they [sic] have applied to our medical program, and in some cases we have no grounds to bar them,” said Hudak.

Although the committee members did not believe these issues fell within their jurisdiction, they acknowledged that Boyer’s concerns were genuine problems.