Second Employee From Iowa City Pipe Dreamz Store Pleads Guilty to Federal Synthetic Drug Charges

A man who worked at a head shop in Iowa City pled guilty to federal drug charges on October 8, 2015, in federal court in Cedar Rapids.

Wayne Christopher Watkins, age 40, from Peoria, Illinois, was convicted of conspiring to manufacture and distribute a synthetic drug called AB-FUBINACA.  The owner of Pipe Dreamz in Iowa City, Robert Carl Sharp, pled guilty on October 5, 2015.

In a plea agreement, Watkins admitted that Sharp was released from federal prison in 2012, and shortly thereafter began selling, and later manufacturing, smokeable synthetic cannabinoid products which are commonly known as “Spice,” “incense,” or K2.  Watkins initially worked for Sharp at a store in Peoria, Illinois, called Smoke N Ink.  Both men moved to Iowa in 2013 when Sharp opened a head shop in Iowa City called Pipe Dreamz.  Sharp would order synthetic cannabinoid chemicals and also purchase bulk quantities of dried damiana leaves, a plant material that resembles dried marijuana.  Watkins admitted Sharp would purchase synthetic cannabinoid chemicals, packaging materials, and inert plant material (typically damiana leaf), from various suppliers and then Sharp and defendant would manufacture synthetic cannabinoid products from the materials.  Watkins admitted he would dilute the synthetic cannabinoid chemical in acetone, and then spray the mixture onto the damiana leaves.  Watkins would then add some flavoring and package the substances into the various brands sold by Sharp.

Watkins and Sharp sold these products in packets that marketed the substances as incense, and contained a warning that the products were “not for human consumption,” although both men admitted they knew the products were actually intended for human consumption.  The synthetic cannabinoids in these products were actually research chemicals that have not been tested or approved as safe for human consumption, and which have unpredictable short-term effects and unknown long-term effects on users.

On May 7, 2014, Sharp’s store, his house and storage unit in Center Point, Watkins’s house in Cedar Rapids, and the Pipe Dreamz store in Iowa City were all searched by federal law enforcement.  During the searches, officers seized thousands of synthetic cannabinoid products, including the sprayed-on plant variety and a liquid form of the synthetic cannabinoids that was designed for use in e‑cigarettes.  Officers seized an active manufacturing operation in Watkins’s house, as shown in photographs admitted at an earlier hearing. watkins_exhibit_photos.pdf (30.96 MB)

Watkins claimed Sharp told him that the chemicals they were using were legal.  Despite those statements from Sharp, however, he admitted he believed there was a high probability that the substances he received and distributed were regulated by federal drug laws, but took deliberate actions to avoid learning of the true identity of the substances.

Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared.  Watkins remains in the custody of the United States Marshal pending sentencing.  Watkins faces a possible maximum sentence of 20 years’ imprisonment, a $1,000,000 fine, $100 in special assessments, and a lifetime of supervised release following any imprisonment.

The case was investigated by the Iowa City Police Department and as part of the Organized Crime Drug Enforcement Task Force (OCDETF) program of the United States Department of Justice through a cooperative effort of the Drug Enforcement Administration (DEA) Task Force consisting of the DEA, the Linn County Sheriff's Office, the Cedar Rapids Police Department, the Marion Police Department, the Iowa Division of Narcotics Enforcement, and the Sixth Judicial District Department of Correctional Services; and the Internal Revenue Service.  The case is being prosecuted by Assistant United States Attorney Dan Chatham.

Court file information available https://ecf.iand.uscourts.gov/cgi-bin/login.pl.  The case file number is 15-CR-31-1-LRR.

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