THERE’s GOLD IN THEM-THAR WEEDS … plus … THE CLAIRMONT CONNECTION
BY DAN VALENTI
PLANET VALENTI NEWS AND COMMENTARY
Last of Three Parts
(FORTRESS OF SOLITUDE, WEDNESDAY MARCH 8, 2017) — As THE PLANET has previously written in this series, the licensed pot business is lucrative. There’s money in them-thar plants. Such an opportunity draws all sorts of “gold rush” people: fore-flushers, legit investors, carpet baggers, opportunists, entrepreneurs, scammers, and the like. Ah, capitalism. Ah, humanity!
A license to operate a medical marijuana facility has been likened in profitability to owning an Apple Computer or Starbucks franchise. You have to work pretty hard in order NOT to make money, a reality that attracts more than its share of “public servants.” You know the type:
- Have portfolio
- Possess political connections
- Know the “right” people
- Control easy money
It’s easy to see how this type of “Player” can tilt the playing field.
How profitable is your typical Dope ‘R Us franchise? When Starbucks sells a cuppa joe, it gulps a profit margin of nearly 60%. When your friendly Dope ‘R Us associate sells you an ounce, he rings up a margin of 60-70% for the corporation. According to The Guardian.com, Apple made $4,650 in sales per square foot; Tiffany & Co. made $4,221 (2013 figures). A pot store makes about $5,000 per square foot. In 2015, Forbes called legal pot the best start-up of the year.
Khem Organics’ Projections
In trying to convince the state to grant the permit to light up, Khem Organics Inc., a facility slated for 501 Dalton Avenue involving a convolution of special interests including Andrea Nuciforo Jr., the Wojtkowski family, and former mayor Dan Bianchi, filed a “Three-Year Plan” budget projection. THE PLANET obtained a copy of the document.
— Year 1, 2017 — Projected revenue $1,620,000 … projected expenses, $1,865,000 … net loss of ($245,000).
— Year 2, 2018 — Projected revenue $1,845,144 … projected expenses $1,460,000 … net profit of $394,144.
— Year 3, 2019 — Projected revenue, $2,164,860 … projected expenses $1,750,000 … net profit of $414,860.
One has no objective way of judging these figures. At first look, THE PLANET finds them low. How accurate can they be? The budget sheet lists a start-up date as Jan. 1, 2017.
Along Came a Tip
Based on feedback and other forms of anecdotal evidence, THE PLANET knows our series on Khem Organics has been widely followed and discussed.
How did we get wind of the story? Through a tip. The street began talking about Khem, and one of The Secret Squadron overheard. On March 1, our agent reported hearing, among other wild rumors, “that Barry Clairmont has put up half the money as an investor in the new pot place on Dalton Avenue. Don’t know if you heard anything and/or can look into this. If it’s true, did he get any inside information about the business from the mayor?”
It’s curious that our “Man in Manila” should hear this just as the street began wagging about the Nuciforo-Wojtkowski-Bianchi-Khem connections.
The tip got us tracking. We contacted Clairmont and found him to be his usual up-front, forthcoming self. Here’s what THE PLANET found.
- “I am not an investor,” Clairmont said. The record bears him out. We didn’t find his name listed in the Khem documents.
- Clairmont said, however, he is “officially involved.” He said he is listed in state documents (Department of Health) as CFO of Khem Organics. “Three or four months ago, I was approached by a friend to act on behalf of a person in the business community to be treasurer of [Khem Organics].” Having a [titular] CFO was a requirement for the paperwork, he said. “I received no compensation. I’m not an advisor. This is a non-paying position. I did this as a favor to a number of people.” What people? Clairmont said he couldn’t give names without violating confidentiality. We pressed. He held. We respected that.
- He said Mayor Linda Tyer, with whom he lives, knew nothing about his involvement.
- He said the position is “a paper title,” with no duties. He allowed his name to be used “as a favor” because he hoped it would land his accounting firm new business. His company, he says, specializes in accounting for non-profit businesses.
Nothing in the record contradicted anything Clairmont told us. We find his explanations not only credible but admirable in that he did not hedge or produce false leads, something sometimes done by others to put THE PLANET off the trail.
One final note. As far as we can tell, Khem Organics, the non-profit, and KO Resources, the shell company that will exclusively reap profit, have followed all state regulations. If that remains true, we wish them every success. They have followed a capitalist model of entrepreneurship, and they will be entitled to every dime they can get.
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“Has anybody here seen the sky weeping tears for the ocean?” — The Guess Who
“OPEN THE WINDOW, AUNT MILLIE.”
LOVE TO ALL.
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State law mandates that medical marijuana dispensaries be not-for-profit entities. The only reason why Barry Clairmont did not receive compensation for his title of CFO is because Khem Organics has not received any revenue from the operation and sales of medical marijuana in Pittsfield.
Once KO produces sales and counts its revenues, the stakeholders of this not-for-profit entity will be well paid!
Doesn’t David Phelps, who runs the not-for-profit Berkshire Medical Center, get paid about $1/2-million per year?
Doesn’t non-Veteran Jack Downing, who runs the not-for-profit Soldier On, get paid in the 6-figures per year?
The list goes on and on with not-for-profit entities! The stakeholders make lucrative salaries!
Barry Clairmont is not stupid! He has his name on the charter of KO for a reason. And just like Nuciforo & his Wojtkowski relatives, Barry Clairmont likes to count his money after the dealing is done!
– Jonathan Melle
You and the Planet should open a non-profit investigation unit. And get that damn T I F. Just remember, behind any new adventure you need a good Lawyer.
CL
We already have a non-profit investigative unit. As you know, we don’t charge anyone (readers or advertisers) a cent. We eat all costs as a true public service.
93 residents of Massachusetts earn more than 1mil a year working for non-profits
Cities and towns needing a better understanding of their tax base have conducted audits of the non-profit businesses within their borders. Pittsfield sorely needs such an audit. There are millions of dollars off the tax rolls, at first glance, way too many for a community of this size. An audit would reveal who has legitimate claim to tax-free status and who doesn’t. After the audit? Action.
I have written city council members about taxing non profits. Would solve revenue problem, so far non have had the back bone to do it.
That is state and Federal law. there is no way for a local government to tax not-for-profits without systemic changes.
Systemic changes are one way to do it, and it would be exceedingly difficult. A better way would be for the governing body (city in this case) to remove the company’s non-profit status if it can. An audit would determine if the tax-free status is justified. Many times it is. In the city, many times it isn’t.
There are no confidentiality laws for a cpa not to divulge WHO their clients are, only that they cannot disclose the work they do for those clients. The shield is not as strong as say, attorney client privledge.
This kind of favor is very serious business.
Barry, if there is going to be a public stock offering give my people a jingle will ya?
thanks ahead of time.
Every school department is dealing with consolidation of buildings. Vote for people that can get this done or your taxes will double from here in 6 years.Teachers are on their way to 90 k a year over the next 3 contract cycles.
The reality is there is nothing you can do to change the system short of a takeover of city hall. These people do not just have control but they have control over any watch dog entities purportedly set up to protect taxpayers. People just need to accept that being steam rolled by the people they elect is a part of life.
People have been talking about voting in a better class of representatives forever and ever and somehow it just keeps getting worse. Can you name one area of Pittsfield government that has gotten more ethical in the last 15 years?
Barry Barry Barry. C’mon man. Are you a non-profit organization too? Good to know that you are available for pro-bono work. You’re turning out to be quite a catch for Linda.
Although this is not illegal, reminds me of Barney Frank not knowing his Boyfriend was running a Brothel out of there apartment..
Even I’m lmao on that one! Aside, yeah, Barry’s doing some pro bono work?
C’mon DV you can’t be buying this load…if it is titular then why not Lombardi or Keegan ? Answer…$$ and connections. Once again BC thinks everyone is a dummy – including you.
D v isn’t stupid either, there could be clues in his writings rather than hanging himself by not stating the facts. Read between the lines on this one Tricki.
TRICKSIE
There’s no big mystery to BC’s role in this. He told us straight out that he hopes down the road this will help win new business for his company. Not only is there “nothing wrong” with that, it’s downright admirable. Having run businesses in the Dread Private Sector for decades, and not ever once taken a handout from government, we fully support an entrepreneur hustling to stay afloat and prosper. THE PLANET’s relationship with BC had evolved over the years. We got off to a rocky start, but since then have built a relationship built on mutual trust, respect, and honor. We have said it before and we say it again: BC is one of the most honorable persons we’ve yet come across in public life. Is he throwing a perfect game? No. But who is (save for Don Larsen on Oct. 8, 1956)? This story exemplifies BC: He didn’t dodge one question. Everything he told me turned out to be supported by the record. He was straightforward. He spoke on the record. If only other public figures in the city would be the same way, the municipality would be far better off.
he didn’t dodge one question, except the one he wouldn’t answer about the favor:
This is a non-paying position. I did this as a favor to a number of people.” What people? Clairmont said he couldn’t give names without violating confidentiality. We pressed. He held. We respected that.
There is no confidentiality. Also, even if the position is titular, it means he cannot be the CPA for the drug dealers until, well, he is no longer titular.
Shakes,
In my business, any perception by clients that you might talk about them, they fire you. No one, not even you, want your money takes about in public. Even mentioning who your clients are scares them.
We have a firm policy not to divulge such information for many reasons. You don’t want to lose potential clients because you do work for a competitor. You don’t want your competition knowing who your clients are so they can solicit them. The list goes on and on.
So, no, I won’t tell anyone who asked me to sign on as the CFO.
In the Dreaded Private Sector, there is all the confidentiality the owner of the business decides. In my business, I have long had a policy not to disclose my clients. There’s no requirement for disclosure, unlike public business.
I completely understand, and I don’t really care who called in the debt. My contention was that confidentiality is not the correct way to describe the circumstances because it implies an ethical or legal obligation. Client secrecy and personal financial gain is the reasoning. Why hiding something to make more money gains the Planet’s respect, as stated above, is interesting.
Someone ought to be checking the South Street to Lenox corridor, average speed is at least 60″ Trudy, Muldoone, where ur?
City Councilor Rivers is advocating the kiosk through PCTV for at least a month now, she stated previously on her show she would like to be as good a Councilor as Lisa Tully and flipping through channels this morning before leaving the house, was on the morning show with Sturgeon.
Titantic was on last night.
Councilor Morandi says Tyler Street is experiencing exciting times. He asked Commish Teryaki if they could get some better lighting? Morandi then asked if it was L E D lighting, Teryaki said he didn’t know, while leaving the podium looked as if Morandi was crazy? When Teryaki first came here, you would have never seen the expression he gave to the C C . Councilor White said he been blown away by the work concerning the Tyler Street project. Morandi also stated people should take a view behind the old jail, something to do with the great parcel in the back. Yes, I be right down.
THE PLANET has been investigating the Tyler Street initiative. It’s not all that it seems. Our report will be upcoming.
I do not think Mr, Clairmont’s involvement is a bad thing. If there isn’t any law that is broken or that limits one’s involvement then why is this even an issue? A state senator is also involved and by right Barry is a private citizen, so why is he even being questioned? Maybe there is an angle that he may be able to obtain special knowledge or favors, but the fact that he is involved with the mayor will put any involvement under scrutiny probably more than most. He has always been a pretty up front facts and figures guy who does his homework. People who are looking for wrong doing here may have an agenda against him or the mayor and are desperately searching for a way to disparage him or the mayor.
The major problem with this City Council is they agree on Almost everything. Understanding it is good to be
Collegiate, but every issue is passed without opposition when it affects the taxpayer wallet. Example,fees, water sewer,property tax,Beaacon, Covanta free boiler,Kiosks. This Public Private Partnership is a ponzi scheme, an example, won’t use name………you get a Tax break and within a building you have other enterprises which are yours (private part) yet has potential to be a money maker. It is not connected to the tif. The problem is, that tif, which is by all means legal-enhances the property, and that’s the idea, however, even with renovations from the legal tif the renovations directly enhance the value of whatever the property owner does privately, for income, say apartments,within a structure or office space.
Barry Clairmont has always been forthright , he always spoke out and stood up against the establishment when there was cause. He was always right in my opinion. He is intelligent, and had slick Bianchi at every turn. Barry has integrity.
Agree completely, Spagirl.
Let’s see.down the road who’s involved and getting paid.We in Pittsfield are never never ever surprised.Barry is doing this as a favor.
Capital expense over 2 million will be asked to fix up that dumpy dirty Crosby school….shut it down .It will still be a dump when they are done.
I’d be glad to become the new P E D A Director and have one qualification the current DIrector doesn’t. Under Questioning from the City Council or should i say Miss Mazzeo, at least i won’t look as if i want to get out of Dodge City.
Seems the Director is lax when it comes to any advancement for a long long time. The longer the E P A off environmental restrictions and the longer PED fails to get a tenant, the logger the Director will be employed and eventually after all that is exhauseted, the money people roll in ( Wal Mart )
Corydon Thurston has been useless as PEDA director. He should be replaced, immediately, by someone who will go there and get things done.
Dan, someone who would actually get things done is never a candidate for any position in Pittsfield.
Yes Comrade Dan, Thirsty should retire to the lower forty.
Cory knows protocol and that’s it, where did this guy come from. When it comes to Brass Tax he is totally a wimp. The consent decree should have been loaded with legal monies to Pittsfield to remediate any controversy that would end up in Court. hy even have P E D A if your hands are tied. This process has prohibited the Developement of the land. Maybe reexamine ithe Consent Decreeshould be done at whatever cost.
I’m confused. Is the business discussed here a non-profit or for profit? How can they have projected net profits for years two and three, yet still be a non-profit?
According to the statement pasted below, BC did this favor in hopes of generating new business for his firm, because of their specialty in accounting for non-profits… which makes perfect sense. If all of the currently approved dispensaries are truly non-profits, he should be in high demand. (Pun intended) But will the city reap any financial benefits by having more non-profits? And I’m not talking about job creation.
If they are actually for profit companies, what financial benefits will the city recieve? And why couldn’t Khem have had one many other qualified CPAs or accounting firms sign on the dotted line?
“He said the position is “a paper title,” with no duties. He allowed his name to be used because he hopes it will land his accounting firm new business. His company, specializes in accounting for non-profit businesses.”
“Having a [titular] CFO was a requirement for the paperwork, he said. “I received no compensation. I’m not an advisor. This is a non-paying position. I did this as a favor to a number of people.”
If Mr. C agreed to do this as a favor, to fulfill an application requirement and this is a paper title only, is the application legal? It seemed that the medical dispensary applications were more tightly scrutinized and frequently denied. The recreational side seems to be a little looser.
If I want weed, why wouldn’t I just get it from my homeboy rather than going through all this bullshit? In the end, just a way to bilk investors and cause more crime.
I believe if you want weed you can grow your own now. As long as your appetite is normal.
Gerry and Tommy were outgunned.They cleaned up to Fred Gardner park 1 mile and a half in 20 years.G E pays no attention to Pittsfield and could care less.Your man Trump is about cut their taxes in half then deregulate them and get rid of the EPA.TRUMP is their guy.
Time for you to take your trumProzac
Read page 10 of the application and draw your own conclusions..be sure to read the bottom sentence as initialed by “JM” – that is all…..
http://www.mass.gov/eohhs/docs/dph/quality/medical-marijuana/applicants/k-m/mop/khem-organics-mop-1-redacted.pdf
Ok, so the application was for a medical, non-profit facility. Still don’t understand why they have net profit projections. I’m not a finance person, but maybe that money will be reinvested into the company or awarded as bonuses to maintain non-profit status? The application is from 2015, before legalization. Does anyone know if they are planning to switch to recreational?
A non-profit business can generate surplus (when outstrips expenses). The non-profit status means that at the end of the year, the expenses and income cancel out. Say you are president of a non-profit. You generate $1 million. The costs of running the business (rent, insurance, payroll, etc.) come to $200,000. Then you pay yourself $800,000. Guess what? At the end of the year, you show zero profit. In many ways, it’s a scam to legally shield income and avoid business taxes. That’s why a stringent audit of non-profit companies in Pittsfield would be in order.
Non proffit can spent money on investing it back in the business..lowering product price or spend it on salary and benefits for the CEO CFO they will be do nothing jobs with great salaries.
NBI, great points. A competing non profit for a lot of profit may use Barry’s admissions against this application. Good thing he made it clear that the mayor knew nothing, otherwise “no soup for you”!
What if he talks in his sleep?
Best of the day Hewt!
Readers should note that several for profit establishments within the city are happy to fill your prescription for medical Merlot and medical Michelob.
Only the Shadow knows Councilor. I’d be inclined not to smoke dope but probably prefer weed eating.
Aside…There are still G sittings throughout the City, when is the dude going to scrub that thing off?
Barry, you could be seeing me out there, I’ll be carrying the sign
…….Will Work for Weed N F P
What’s next Clean Prostitution Clinics.
So this is what is important to the taxpayer of Pittsfield. Pot Dispensaries,refugees, needles, Andy and the Woitkowski doing their thing, it’s all good, Tes and his buddy making some rental coin. What about the people who helped build this City, our Seniors? Seniors are barely scraping by, why should they be left out, haven’t they earned the right to stay with their homes and not be run out of town. This City is a joke and it’s people have turned their backs on Grandma and Gramps and been have traded in for negative progress and dope fiends and dirty Needle Addicts.