Foreign hemp pitch masked Chinese-funded marijuana farms, labor abuse and pollution

Federal prosecutors say Chinese investors were deceived into believing they were funding legal hemp farms when they were in fact bankrolling one of the largest marijuana enterprises in New Mexico history. Investigators said front companies were set up in California to charge investors $20,000 to $50,000 for counterfeit cultivation licenses, while also demanding shares of the harvest.

The scheme brought in outside interests that poisoned land, wildlife, and people along the San Juan River through the use of illegal pesticides and unpermitted irrigation, according to prosecutors.

“Exploiting workers, desecrating land and poisoning rivers for profit is not business, it is criminal, and it will be met with justice,” said U.S. Attorney Ryan Ellison. The FBI led the investigation, supported by multiple federal, state, and county partners. Acting Navajo Nation Attorney General Colin Bradley said the case resulted in the shutting down of large marijuana farms operated on and near Navajo land.

Former politician

Former Navajo politician and hemp advocate Dineh Benally pleaded guilty to 15 federal counts that spanned drug trafficking, manufacture and distribution of more than 1,000 kilograms of marijuana, firearms possession, employment and harboring of undocumented workers, smuggling undeclared Chinese pesticides, environmental crimes under the Clean Water Act, and concealment of records. He faces a mandatory minimum of 15 years in prison, up to life, fines of up to $10 million or twice the illicit gains, and daily environmental penalties of $5,000 to $50,000.

Before the federal plea, Benally had already been cited in multiple state and county cases. In 2023, 15 Chinese immigrant workers filed a civil lawsuit alleging forced labor, saying they were recruited from California with false promises, stripped of phones and car keys, and forced to work long hours without pay on marijuana farms.

Colorful past

Earlier, in 2018, Benally ran for Navajo Nation President on a platform centered on industrial hemp, promoting it as a path to health, jobs, and infrastructure investment. He previously served as Vice-Presidential candidate and as President of the Navajo Nation Farm Board, where he championed hemp development.

According to court filings, from 2018 to 2020 Benally and associates started more than 30 farms covering 400 acres, with over 1,100 greenhouses on Navajo land. Workers included local Navajo and Chinese nationals, some undocumented, who were misled into believing they were growing hemp. An illegal sandbag dam and channel fill polluted the San Juan River to irrigate crops, leading to Clean Water Act violations. Authorities eventually seized 260,000 marijuana plants and 60,000 pounds of processed product.

January raid

The second phase unfolded from 2022 through early 2025, when Benally obtained a state license for a farm near Estancia. Inspectors documented pest infestations and uncontrolled conditions, revoking the license in December 2023 and imposing a $1 million fine. Despite a cease-and-desist order, operations continued, including tampering with a utility meter. A January 2025 raid uncovered 8,500 pounds of marijuana, cash, firearms, methamphetamine, pesticides, and protective gear.