A partner in a company hoping to get a medical marijuana license in Niles and build a $ 2 million facility has been accused of two felonies, potentially jeopardizing the company’s chances of a state license.

On April 15, Niles police obtained an arrest warrant for Michael Heskett, 50, who is accused of delivering narcotics to a minor and aggravated child sexual abuse.

Prosecutors allege that Heskett gave a 16-year-old girl cocaine and marijuana on numerous occasions and that sexually explicit photos of the girl standing next to Heskett were found on her phone.

Heskett is a partner in HDS Investments, which is two months away from completing construction at a $ 2 million facility on the corner of Lake and 13th streets to grow medical marijuana.

How Heskett’s arrest affects HDS ‘pending Class C medical growth license is unclear at this point.

HDS received preliminary approval in March 2019 for a state license from the Department of Licensing and Regulatory Affairs – a process that requires criminal and financial background checks.

The company is still awaiting a licensing qualification, which requires a building inspection.

According to Jeff Durrell, another partner in HDS, state regulators are aware of the arrest and have said the company will not affect the status of the HDS application.

“They were our first phone call after that happened and they sent someone immediately, and within four hours we were told we could move on,” Durrell said.

Durrell said the company has suspended Heskett for 30 days, but there are no plans to change its partnership status in the company.

David Harns, communications manager for Michigan’s Department of Licensing and Regulatory Affairs, said he could not comment on individual applications, citing confidentiality claims.

But if Heskett is convicted of both crimes, HDS would not be eligible to receive a state license, according to a statute in the application.

The application’s code also states that the Marijuana Regulatory Agency may consider the “integrity, moral character and reputation” of an applicant and whether an applicant has been accused or arrested for “all relevant criminal facts.”

Harlingen said any information about applicants is considered part of the evaluation process.

In 2018, the state licensing association rejected applications from Oasis Wellness Center, which had applied for a facility in Niles and other cities in Michigan, because of arrests that were not disclosed by the applicant. The licensing agency rejected a handful of other applications throughout Michigan in 2019 and 2020 because of the “integrity and moral character” of the applicants.

Niles city manager Ric Huff and Mayor Nick Shelton said the city’s requirements for a license are based on Indiana’s and that Niles would follow the state’s lead in the case of HDS.

The company currently has a preliminary license from the city, with a full license condition of a building inspection and permission from the state.

“It would be the state’s responsibility to determine that what this person is being accused of, or being convicted of, creates the conditions for a medical marijuana license,” Huff said.

Daniel VandenHeede, a city councilor, said he is not sure if Niles HDS could refuse a license if the company successfully obtains a state license, but he added that prosecutors against Heskett are inclined to oppose a license.

“Of course, people are innocent until proven guilty, and we don’t know where this case is going,” he said, “but I would be inclined to vote against a company in that situation.”

HDS bought a parcel of land from the city of Niles for $ 30,000 on the corner of Lake and 13th streets. In 2018, city officials estimate the 20,000-square-foot plant will generate $ 7,000 in real estate revenue.

A Class C growth license would allow HDS to grow 1,500 cannabis plants.

According to court documents, Heskett allegedly gave cocaine and marijuana to a 16-year-old girl at various times in his Niles residence in November and December 2019. When investigators searched the girl’s phone, they apparently found “numerous” photos of her whipping white powder and smoking pipes, cigars and e-cigarettes.

Prosecutors also found “numerous” sexually explicit photos and videos on the girl’s phone. The girl told investigators she took many of the images while she was at Heskett’s residence.

“These criminal prosecutors will defend vigorously,” said Sean Drew, Heskett’s attorney. “There may be civil actions filed by Mr. Heskett in connection with these accusations.”

Heskett’s first scheduled date is June 10.

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