A blind trust overseeing Gov. Wes Moore’s investment holdings will have to divest many of the Democrat’s holdings in the state’s growing cannabis industry.

The acknowledgment of what is called a rebalancing comes as Moore announced the creation of the blind trust — what is believed to be the first by any Maryland governor since Republican former Gov. Robert L. Ehrlich Jr.

Gov. Wes Moore has moved more than $2.5 million of investments into a blind trust in an effort to prevent conflicts between his personal holdings and official duties. Credit: Bryan P. Sears / Maryland Matters

“This blind trust is a continued effort on behalf of Governor Moore to serve Maryland in the most transparent way possible,” Carter Elliott, a Moore spokesperson, said in a statement. “This will ensure the governor is removed from even the appearance of potential conflicts of interest that could arise as a result of his duties as governor and further demonstrates his commitment to serving the people of Maryland to the best of his ability ethically, transparently, and effectively.”

The document released Monday follows the filing of the governor’s new financial disclosure. The document covers the 2022 calendar year. It updates an earlier report for the 2021 calendar year filed by Moore a year ago as a candidate for governor.

As part of the agreement finalized last week with the Maryland State Ethics Commission, Moore has transferred more than $2.5 million in assets. The investments, mostly stocks and mutual fund holdings, will be overseen by Baltimore-based Brown Investment Advisory and Trust Company.

The details of the trust were released Monday following Moore’s filing of his annual financial disclosure with the State Ethics Commission.

The agreement, approved by the commission last week, is the first look at how Moore, who earns $184,000 annually as governor, plans to separate his official duties from his personal financial holdings valued in the millions.

Cannabis company tops the list of Moore investments

Topping the list of assets in Moore’s trust is nearly $1.2 million in stock in Green Thumb Industries. The Chicago-based cannabis company has operations in Maryland and other states.

The nearly 171,000 shares of stock comprise more than 46% of Moore’s total assets in the trust. No other holding exceeded 9%.

Baltimore-based Under Armour makes up the second largest holding. The 25,146 shares are valued at more than $203,000 and make up slightly more than 8% of the total trust.

State ethics laws prohibit an elected official from having any business holding exceeding 20% of the trust’s total value. Industry sectors are limited to 30% of the total asset value. The restrictions are meant to prevent an elected official from being able to guess how an official action would affect personal holdings.

Overseers of Moore’s trust will have to rebalance the portfolio to get the holdings in Green Thumb Industries at or below 20%. He would also be prohibited from having the cannabis industry make up more than 30% of the trust’s overall value.

Ethics regulations governing the trust give the trustee 90 days to make the adjustment.

Under the terms of the trust, Moore will get annual reports on the value of the trust for tax purposes.

He will not be privy to moves made by the advisors. The public will also not likely have access to information about what is in the trust moving forward. Reports on the assets of the trust are not required to be part of annual financial disclosures. Doing so would unblind the assets.

Information about the trust and the selling off of assets such as Green Thumb Industries, would be reported annually to the State Ethics Commission. That panel has the authority to revoke the trust if they find it does not comply with state law.

Moore expected to sign cannabis bill

Maryland is expected to begin legal sales of the drug to adults for recreational use on July 1. Licensed medical cannabis growers, processors and dispensaries automatically can enter the recreational market.

The governor has yet to sign legislation passed this year establishing the licensing, regulation and taxing for the expanding cannabis market.

The timing of the creation of the blind trust eliminates a potentially awkward ethics issue.

“We did this so that we can make sure that he’s working in the best interest of the state of Maryland,” said David Turner, a spokesperson for Moore.

“He does not own it anymore,” Turner said, speaking of the cannabis and other stocks being transferred to the trust. “He is following the letter of law set by the ethics commission.”

In the months since winning the 2022 election and being sworn in, Moore has provided few details about his plans to avoid conflicts other than to say he would follow the letter and spirit of state law.

In January, he publicly recused himself from a vote by the Board of Public Works related to a contract to extend the use of a warehouse with Under Armour.

Moore resigned from his seat on the Baltimore-based company’s board in November following the election.

Moore’s agreement differs from predecessor

The trust established by Moore hands over day-to-day oversight of a portfolio of investments to a firm that has no connection to the governor.

The agreement set up by Moore is very different from how his predecessor Gov Larry Hogan (R) handled his financial holdings.

Hogan set up a trust but it was not blind. Instead, he and the commission entered into an agreement that set rules for what he was required to disclose publicly. That agreement also set parameters for oversight by the ethics panel.

The arrangement came under repeated criticism because it left unanswered about the extent of his holdings and his knowledge of them. It allowed him to receive broad briefings on the economic performance of his holdings. The trustees included officers in the Hogan Companies, the governor’s real estate firm. The company was run by his brother Timothy Hogan.

Hogan was already into the start of his second year in office when that agreement was finalized.

In 2018, Hogan released tax returns showing he earned $2.4 million during his first four years in office.

The governor was also subject to an ethics complaints citing conflicts of interest related to highway construction and properties owned by The Hogan Companies.

Hogan repeatedly said during his two terms that his financial disclosures were in full compliance with state law and the ethics commission.

Some assets not covered

The governor’s blind trust includes just one real estate investment — 15 shares of American Tower Corp. valued at under $3,100.

Many of Moore’s real estate investments, including his family’s Baltimore home, are not included in the trust. The nearly 100-year-old mansion is on the market for $2.75 million. Administration officials said personal homes have not typically been included in such agreements.

Also not included in the trust is ownership in 21 limited liability real estate companies.

All of the companies are overseen by Alliven Group, a New Jersey-based private equity real estate investment group.

In most cases, Moore owns a 9% or less stake in the properties. He holds as much as a 24% stake in three others.

Last May, Moore sold his share of one of the LLCs. He reported to the state ethics commission that he was paid at least $100,000 for a 3%-9% share of a property valued at between $1 million and $2 million.

Administration officials said those companies are not required to be part of the trust because the assets can not be quickly sold.

In his calendar 2022 financial disclosure, Moore also reports holding a 3% stake in a Washington D.C.-based Zeal Capital Management LLC. The property is valued at $10 million or more on state disclosures.

He also reports owning a 3-9% stake in the Baltimore-based real estate investment group called Camden Partners Strategic V. The governor did not list a value of the corporation’s holdings.

Neither the DC nor Baltimore real estate investments are listed among the assets of Moore’s blind trust.

Also not included in the trust’s assets is stock owned by Moore in Massachusetts-based Butterfly Network Inc. The governor disclosed he owned 1,000 or more shares of the healthcare technology company in his 2021 and 2022 filings.

A list of healthcare stocks administered by the trust do not include Butterfly Network stocks.

A Moore spokesperson said the shares were sold on March 9, 2023. The sale price was not immediately available but would appear when the governor’s financial disclosure for the current year is filed with the ethics commission.

Four other corporations created by Moore were also not included. The companies handle a range of business activities including speaking engagements, literary works and a production company.

This article was originally published on MarylandMatters.org and is republished with permission.

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