PennAlt Organics' proposed dispensary design / photo via PennAltOrganics.com

A company that Beaver County Pension Fund dollars were invested into has failed to win marijuana grower or dispensary licenses from the state.

PennAlt Organics is a newly formed Pittsburgh-based “life sciences company” that announced in October of last year it had received its first capital infusion of $6 million from outside investors. PennAlt’s funding was led by the iNetworks Opportunity Fund, which was financed in part with an $8 million commitment by the Beaver County Pension Fund in 2013.

A portfolio-company description provided to members of the Beaver County Pension Board by iNetworks on March 17th as part of its annual report lists PennAlt as, “an early-stage phyto-pharmaceutical company focusing on alternative and organic methods to treat chronic pain and neurological disorders.”

The mission statement on PennAlt Organics’ website is more descriptive: “Apply the highest standards in the industry to the cultivation, processing and distribution of medical marijuana while exceeding regulatory compliance mandated by Pennsylvania law.”

In their March 17th report, iNetworks said PennAlt was “in the application stage to acquire the requisite Pennsylvania licenses to commence commercial operations.”

On June 20th, the PA Health Department awarded 12 permits to marijuana grower/processors following a competitive review of applications. The Health Department similarly awarded 27 permits yesterday to medical marijuana dispensaries. Not listed in the names of companies that will be among the first to profit from medical marijuana in Pennsylvania is PennAlt Organics.

“We haven’t made a final decision, but we have plans to make a proposal in a second round for a grow license,” said PennAlt Executive Vice President John Smolic when contacted by the Beaver Countian earlier this week. Smolic was still holding out hope at the time that his company would win one of the dispensary licenses.

It is unclear exactly how much the iNetworks Opportunity Fund currently has invested into PennAlt Organics, although capital calls to the Beaver County Pension Board detail a $450,000 investment by the fund in September of 2016. A second capital call for PennAlt was issued in October of least year due to an additional $150,000 investment by iNetworks. Documentation obtained by the Beaver Countian appears to show the Beaver County Pension Fund’s contribution in those investments to be $169,731 and $49,504, for a total of $219,235 not including management and other fees.

State lawmakers passed legislation in 2016 which was signed by Governor Wolf that allows patients suffering from one of seventeen qualifying conditions to be prescribed a processed version of marijuana in ointment, oil, or pill form. The sale and distribution of the drug for any purpose remains illegal under federal law, but the federal government did not crack down on marijuana companies during the Obama administration where they had been legalized by state law. It remains unclear whether that policy will continue in the Trump administration under Attorney General Jeff Sessions.

Members of the Beaver County Pension Board got into a heated debate during their public meeting on Tuesday with iNetworks Senior Managing Director Anthony Tomasello over a fund disbursement that had been due to the county. According to the PennAlt Organics website, Tomasello also serves as that company’s Treasurer and Chief Financial Officer.

PennAlt Organics’ proposed grow facility / photo via PennAltOrganics.com
SHARE
John Paul
John Paul is the founder of the Beaver Countian. He reports full-time for the site, specializing in investigative journalism with an emphasis on public corruption.

45 COMMENTS

  1. FINRA regulations require that investment advisors/sellers/brokers ensure that investment recommendations match the risk strategy of the investor. Knowing that this was a pension fund, a start up pharmaceutical company that deals with MJ isn’t even close to an appropriate match. Furthermore, his role in the company should have been fully disclosed.

    Any taxpayer can file a complaint with FINRA as it’s your money being invested. As a federal offense, the penalties are harsh.

    I’d love to know how the county came to be introduced to this clown. Who is he related to?

     
    • Previous article claims ties to a former employee of the Queen’s circle of friends and family. Obviously she is like Amadio and knows nothink and sees no think. That lil ol granny could never run schemes like that. Too busy knitting afghans for Stonewall. As always, FOLLOW THE MONEY TRAIL OF FRIENDS AND FAMILY!

       
      • Yes Tomaselli is originally from Monaca and his sister retired from the treasurer office a while ago.

         
    • “accordingtome” is so right – this is a speculative investment, totally unsuitable for a Pension Fund. Looking at the FINRA rules, the former NASD had a “suitability rule” and the former NYSE had something called the “know your customer rule.” Suitability is one of the keys of investments, and no manager in his right mind would allow that kind of investment from a pension fun. Someone breached their fiduciary duty to the County by allowing this investment to go forward.

       
      • MarshaP: Now we can trace the Queen connection to a former employee who lobbied for family member! Back at you JP! Looks like you got another avenue to investigate. I don’t envy you. This shithole county has no bottom to it!

         
  2. Get out of that half-assed investment NOW! This group sold the county a bill of bullshit goods. All them licenses & permits and they got shut out? It’s obvious that they found some suckers for their bet and its the taxpayers of this county. They have no political juice and are going nowhere. Unload now and invest in a solid performer with much less risks. You cannot gamble on the employee pension fund. Talk to the state about f-cking up a pension plan. They killed the PSEA and SEA by assuming steady profit margins. A sin the state, when the house of cards collapses the taxpayers will foot the bill and NO political hack will ever be indicted or held accountable. These commissioners are woefully overmatched by some of the hucksters parading through the court house. The solicitors better get out the law books BEFORE the meetings and be PREPARED for anything. Stop the train if you are not absolutely sure of the destination or you sense danger. Otherwise, we’ll be going over a cliff! What is the role of the Queen and rube Rossi in following our investments and finances? As noted earlier, how do you miss a $460k check you are expected to collect? Hell, I check my bank account everyday praying for relief to stay one step ahead of the hangman. Evidently they are too busy to attend to such trivial matters. AGAIN, no accountability and no ramifications for failure to collect and deposit county monies.

     
  3. Chairman Amadio better get with good buddie Joe Spanik and Denny Nichols and get stories straight.

    Using the Bernie Madoff playbook.

    How is that life settlement investment doing, you know the one that they put 10 million in and then gave another 10 million cause was doing so bad. Then it changed its name.

     
  4. “As a Schedule I drug under the federal Controlled Substances Act of 1970, cannabis (legal term marijuana) is considered to have “no accepted medical use” and have a high potential for abuse and physical and/or psychological dependence.”

    Why would anyone invest money in marijuana ? It is still illegal ! It doesn’t matter what the goofy state of PA says. The Feds say it is illegal ! How can you invest taxpayer money into an illegal enterprise ?

    No matter what side of the marijuana debate you stand on, you have to admit that this was pretty stupid.
    Until the matter is cleared up by passing a Federal law legalizing it, these types of companies should not be publicly raising money.

    AG Jeff Sessions actually has been very clear that he wants to prosecute “medical Marijuana ” growers and sellers.

     
    • You’re full of shit! Ask those medical marijuana users in the 10 states where it is legal, who are afflicted with severe pain, Parkinson’s, neorological affliction, etc. if it is not an effective medication. Get your head out of your asses people and don’t let the propaganda from big pharmaceutical companies sell you a line of bullshit along with their $$$$ prescriptions.

       
      • Secondly, for medical MJ they process CBD not THC ( which is the euphoria inducing compound in MJ). Do some research!

         
      • Marijuana is illegal you dumb ass. It doesn’t matter if 40 states say its OK, until the federal government says its OK then its outlawed. AG Sessions could shut the whole medical marijuana show down today if he pulls the trigger on it. Do some research yourself. And don’t just read it in High Times.

         
    • But Trump said he wants to approve Medical marijuana. And Jeff will go along with that. And you need to do more research on Medical marijuana, it is not addictive. It does not make you high at all. It’s better then all the pain pill addicts overdosing all over PA (190,000) you can not overdose on Medical marijuana! I have never smoked it, nor never will but will use the Medical marijuana for pain. You need to research before posting something that makes you sound uneducated.

       
  5. A financial advisor should also ensure that the bet that relied heavily on legalized marijuana is heavily mined. it is still illegal according to the Feds and those idiots in Congress and Sessions or Trump could decide to enforce the law and seize all assets as illegal money laundering, etc. Asset seizure is a great business for governments to legally steal from dealers, etc. Especially when lots of money and drugs disappear Before they are all counted and sealed. What’s the difference if it’s 4 oz or 4 lbs. Still considered trafficking for maximum profits. All ends up in black holes in police departments. Unless you were sure this guy was “hooked up” in Harrisburg this was the dumbest idea yet except for the Comp/Ridge debacle.

     
    • Forfeitures also take place long before any determination of a defendent’s guilt or innocence by way of a trial. The amount of money that has to be spent on legal fees to attempt to get that money back oftentimes surpasses the amount forfeited and even then there is no guarantee that you will be successful in getting your property back.

       
  6. I’d like to say it surprises me, but it does not. The whole marijuana thing in this state smells of political influence. The only people who are going to make money are the politicians who are most likely the investors behind the companies getting the licenses for grow facilities or dispensaries. The state will gladly take their share in taxes so they can overspend and waste like they always do. You can only run a dispensary if you are or employ a physician or pharmacist. Please tell me how a physician or pharmacist is more qualified than any other responsible citizen? Considering most people using for medicinal purposes have been relying on less than safe alternatives and you know this is going to be regulated beyond reasonable. Another way to take opportunity from a responsible, enterprising citizen to become a small business owner.

     
      • When your yard consists of only of canabis plants, tomatoes and opium poppies then yeah…your yard will be outlawed.

         
    • Exactly. The only people getting licenses are going to be people who know someone, because that’s how this county works. If you’re not sleeping with or related to one of the politicians making the decisions, you get nothing.

       
    • Good question it’s illegal under federal law I don’t understand how public pension funds can be “invested” into it? Was it explained to the county the money would be invested in illegal activities?

       
      • I doubt there was any explanation needed since Tomasello is connected to one or some of them. They blindly followed him and probably expect something in return, although certainly not monies to go into the pension fund. How could this many people do such dirty deeds to us for so many years and still get away with it? Thank God for JohnPaul!! We’d still be in the dark getting financially raped. I have no confidence whatsoever with this current board either.

         
  7. I wonder what relatives or friends of Beaver County officials will end up in the medical marijuana business in the future?

     
    • I can already imagine Javens Joints, LLC….. Most likely using space in the 911 center compliments of the county (and a satellite office in Friendship Ridge where you can smoke a blunt while getting a shave and haircut).

       
  8. It is a bit surprising to see these investments in a pension fund. I don’t think it is an issue on the proper attitude of government toward pot, but you would expect more conservative positions (dividend payers, long track history of performance) overall due to the volatility of small cap companies. This marijuana company, and others in the group, MAY be a good investment down the line, but it is a very speculative investment to make with money that had better be there when the pensioners look to draw from the county accounts. One of the basic warnings in investing is “don’t chase yields”, especially when you are compromising the safety of money that you will need.

     
  9. Can’t pension holders sue the individual board members for their losses if there was a breach of fiduciary duties?

     
    • Well in my opinion there has been a breach or failure of fiduciary duties and violations of county code on numerous occasions and nothing has been done about it yet.

       
      • Somebody put some smelling salts under Stonewall’s nose and a boot in his lazy ass. At what point will the feds have to step in?

         
    • They can explore that IF the pension plan is unable to meet it’s obligations and can’t pay out the money. But… so far, that hasn’t been an issue. Emphasis on “so far” .

       
  10. The Beaver County Commissioners who approved this investment are the ones ultimately responsible. Although the investment company should be doing its job for the client, which by the way was just signed to go into effect by the Fed’s, the client is the one that makes the ultimate decision on risk. Don’t know when this pension fund fiasco got signed but I bet that all those involved have investments themselves so they should at least be familiar with the guidelines. The commissioners should have known that this was a high risk investment, etc. and should have been told this by the investment broker. This broker should have been told after the initial presentation of this, thank you for your presentation and we will let you know if this is approved. Then just drop it and not do this or any other high risk investment. Is this something else that the last commissioners were hiding from the public? Anyway, our commissioners should move forward to correct this and other problems. Demand our payment that this company owes us and get rid of this investment broker.

     
  11. The following confidential draft memo was uncovered today. When asked about the contents of this memo, County Chairwoman Sandie Egley said “Well, what else were we going to do? This job has been nothing but cleaning up one mess after another and I can’t wait to retire and just get high.” Commissioner Dan Camp said “Hell yeah, who wouldn’t want a big fat doobie?” Minority Commissioner Tony Amadio said “I was on vacation, I don’t know anything about it. You know, I’m in the minority around here so I don’t get much say so as to what those other two decide to do – nobody ever tells me anything.” Because of the questionable legality of the memo, I approached DA David Lozier for his input. Initially he didn’t seem to realize that marijuana was illegal but after reminding him of this he stated that he would “immediately begin an investigation into this.” The results of this investigation aren’t expected until after the last future county retiree is dead. Treasurer Connie Javens has made it clear that she is not to be approached for comment but she was seen scurrying into her office carrying what appeared to be a digital scale.

    The memo appears in its entirety and has been formatted for use here:

    TO: Pension Vested Beaver County Employees and Retirees

    FROM: County Commissioners Sandie Egley, Dan Camp and Tony Amadio

    RE: Change to monthly benefits effective immediately

    Due to some recent events it has become necessary to change the currency to be used for pension payments. Effective immediately all retirees will continue to receive a monthly payment but his payment will be changed from cash to a predetermined selection from the Cannabis of the Month Club. Your subscription to this monthly selection will be automatically renewed as appropriate until you are no longer eligible for pension payments. The Cannabis Club hand selects items made with marijuana containing enough THC to get an elephant high and automatically sends them to you each month. Please note that the county will not be responsible for any federal charges incurred by the employee for receiving each monthly package.

    To give you an example of a current selection from the Cannabis of the Month Club catalog for 2017, the July selection is fresh blueberry jam spiked with marijuana along with a tube of English Muffins. The jam is made with freshly picked succulent summer blueberries and the tube of English muffins contain eight different varieties of nook and cranny filled breads.

    Additionally, to improve morale among current county employees we are announcing a variation of service pin awards. Instead of employees who reach certain milestone anniversaries receiving a commemorative pin indicating the number of service years, employees will be receiving a special roach clip. Employees celebrating five years of active service will receive a brass clip; those with ten years of service will receive a sterling silver roach clip; employees celebrating 20 years will receive a gold plated roach clip engraved with their name along with “20 years of service;” finally, those employees who reach 25 years will be receiving a platinum plated roach clip that also includes a diamond chip. It is our hope that the inclusion of this service clip program will help to diffuse any disappointment felt due to our change in the form of pension currency.

    Please direct any questions you may have regarding this change to the human resources department.

     
    • Funny- unless you have a county pension.

      Dennis Rodman’s trip to North Korea was financed by a weed based currency- potcoin. I’m not kidding. So, this might be closer to the truth than you think.

       
    • Accordingtome: That is absolutely hilarious. As for the county employee pensions? Remember what happens when the big wheel of scam comes around. You all watched as illegal activity was common practice. Worst of all, sold your soul to politicians for security and campaigned for your benefactors for friends and family. You made a very dumb life choice, believing anything that comes from a politicians mouth. You will reap what you sow. Get a set of balls and speak up about corruption, fiduciary improprieties and payroll padding. Redemption is still possible. You owe it to us, the taxpayers raped by your blind allegiance and dead silence.

       
  12. I think these are the same people, in a different disguise, that were so helpful to the previous commissioners in the sale of Friendship Ridge. Same playbook, great for the county, lots of money to be made/saved, etc. I bet they tinted their hair, wore glasses and fooled everyone into believing it was a great deal. “Fool me once, Fool me twice” should be the new motto for the county.

     
  13. Wanna see pot? Go park behind Yolandas in monaca!

    Someone is growing back there. It was discovered only because there was no parking out front.

    I have a few pics and haven’t been back since but the plants are probably still there.

     
  14. It’s Amateur Hour once again in Beaver County. Tomasello sure fits right in with Beaver County politics. It’s my understanding that the medical marijuana business cant even place their money in large banks or credit unions since it is still recognized as being illegal by the Federal government. It’s primarily a cash money business. With that being said, how in the hell can the county expect to receive returns on what the Federal government recognizes as an illegal business??!!! The wagon wheel revolves back around to MONACA and the life long relationships from the powerbrokers who live and or were raised there. It’s like a mini Youngstown with its mob like ties.

     

LEAVE A REPLY

Please enter your comment!

Please enter your name here