NILES — A partner in a company that hopes to obtain a medical marijuana license in Niles and is building a $2 million facility has been charged with two felonies, potentially jeopardizing the business’ chance of getting a state license.
On April 15, Niles police received an arrest warrant for Michael Heskett, 50, who is charged with delivery of narcotics to a minor and aggravated child sexually abusive activity.
Prosecutors allege that Heskett gave a 16-year-old girl crack cocaine and marijuana on numerous occasions and that sexually explicit pictures 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 on a $2 million facility on the corner of Lake and 13th streets to grow medical marijuana.
How Heskett’s arrest would affect HDS’ pending Class C medical growing license is unclear at this point.
HDS received preliminary approval for a state license from the Department of Licensing and Regulatory Affairs in March 2019 — a process that requires criminal and financial background checks.
The company is still awaiting a license qualification, which requires a building inspection.
According to Jeff Durrell, another partner in HDS, state regulators are aware of the arrest and have told the company that the charges will not affect the status of HDS’ application.
“They were our first phone call after it happened and they sent someone down immediately, and within four hours we were told that we could continue,” Durrell said.
Durrell said the company has suspended Heskett for 30 days, but there are no plans to change his partnership status in the business.
David Harns, communications manager for Michigan’s Department of Licensing and Regulatory Affairs, said he could not comment on individual applications, citing confidentiality provisions.
But if Heskett is convicted of either felony, HDS would be ineligible to receive a state license, according to a statute in the application.
The application’s code also states that the Marihuana Regulatory Agency can consider the “integrity, moral character, and reputation” of an applicant and whether an applicant has been charged with or arrested for “any relevant criminal offense.”
Harns said all information on applicants is considered as part of the evaluation process.
In 2018, the state’s licensing board denied applications from Oasis Wellness Center, which had applied for a facility in Niles and other towns across Michigan, because of arrests that were not disclosed by the applicant. The licensing agency denied a handful of other applications throughout Michigan in 2019 and 2020 because of the “integrity and moral character” of the applicants.
Niles city administrator 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 provisional license from the city, with a full license contingent on a building inspection and state approval.
“It’d be the state’s responsibility to determine that whatever this person is accused of, or is convicted of, violates the conditions to hold a medical marijuana license,” Huff said.
Daniel VandenHeede, a city council member, said he is unsure if Niles could deny HDS a license if the firm successfully obtains a state permit, but he added that the charges against Heskett make him inclined to oppose a permit.
“Obviously 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 estimated the 20,000-square-foot plant could bring in $7,000 in property tax revenue.
A Class C growing license would allow HDS to grow 1,500 cannabis plants.
According to court documents, Heskett allegedly gave crack cocaine and marijuana to a 16-year-old girl on numerous occasions in November and December 2019 at his Niles residence. When investigators searched the girl’s phone, they allegedly found “numerous” pictures of her snorting white powder and smoking from pipes, cigars and e-cigarettes.
Prosecutors also found “numerous” sexually explicit photos and videos on the girl’s phone. The girl told investigators that she took many of the images while at Heskett’s residence.
“These criminal charges are going to be vigorously defended,” said Sean Drew, Heskett’s attorney. “There may be civil actions filed by Mr. Heskett in relation to these allegations.”
Heskett’s first scheduled court date is June 10.