Daniel James Mladenov, 39, who set up the Vapourium in 2014, had his isolated home raided by police in December 2020.
Officers found — hidden in purpose-built chambers, secured by combination locks, behind a manhole — a well-tended crop worth an estimated $67,500.
In the Dunedin District Court yesterday, counsel Ron Mansfield, KC, described his client as "an innovator" and said he was experimenting with growing the class-C drug in anticipation of the relaxation of legislation around the time of a national referendum.
He argued Mladenov should be discharged without conviction to prevent stifling his "huge potential" and impeding his entry into the medicinal-cannabis industry.
Judge Hermann Retzlaff, though, noted the vape entrepreneur had a previous conviction for driving under the influence of drugs and he said it was important to send a message to others who might be tempted to break the law.
He was charged with cultivating cannabis along with fellow residents Gordon Patrick Burch, 54, and Samuel Bernard O’Leary, 45.
Police zeroed in on the two-storey residence, situated among disused sheds and large outbuildings on 4 hectares of land, after their Christchurch colleagues discovered Mladenov had spent more than $14,000 on growing equipment in the preceding two years.
Power-supply records at the address also showed they were using eight times the national average for a household of five in July 2019, which rocketed to 13 times the average the following year.
Officers found a manhole constructed at waist height within a wall of a hallway opposite O’Leary’s bedroom door.
The three grow rooms beyond could only be accessed by combination-code lock.
Inside one chamber, police found 18 mature cannabis plants, 1.5m in height, sitting in large mesh soil beds, each with an individual water supply, under LED lighting.
A summary of facts noted the smaller clones each had strain names — "Pineapple", "CDB hash", "Headcandy" and "Kraken" — written in marker below them.
Mladenov had provided growing instructions, spray bottles and nutrients in each chamber, the court heard.
Water came from collapsible tanks and carbon dioxide was introduced to the rooms to encourage growth — a set-up police "conservatively" estimated cost $20,000.
In Burch’s room, officers found dried product worth $7000 and 80 small glass bottles labelled "Dr Cooper’s Canna Oil", each containing 16ml of cannabis oil, worth $300 apiece.
He admitted he would use the product himself and provide it to associates, resulting in two further charges of supplying a class-B drug and possession for supply.
Mladenov admitted financing the set-up, but said the yield was for personal use, an aspect stressed by Mr Mansfield, who said there was "not one iota of evidence" the drugs were being supplied to others.
In 2022, one of his staff members told the Otago Daily Times they had developed products with the recreational cannabis referendum looming and were "dismayed" when it was voted down.
On the Seacliff Organics Instagram page, a post foreshadowed the court case and criticised the police approach as "overzealous".
Burch was sentenced to four and a-half months’ community detention for his role, while O’Leary was discharged without conviction.
His application was based on his plans to travel overseas to put his archaeology and anthropology degrees to use.
The court heard all three defendants now had medical prescriptions for cannabis.
Why did the case take nearly five years to get to sentencing?
Prosecutor Richard Smith said the file was "easily" the oldest in the Dunedin Crown office.
After charges were laid in January 2021, there were changes in legal representation and challenges to the factual basis of the charges.
Mladenov’s counsel, Ron Mansfield, KC, told the court his client had always been willing to take responsibility for the cultivation, but there were disputes over its time span and the potential yield from the crop.
Critically, there was also a legal challenge to the validity of the raid conducted by police at the old Seacliff asylum.
The search warrant was based on information from the police’s Christchurch organised crime unit and the southern asset recovery unit in what was called "Operation Fitzgerald", a broad investigation targeting a business selling hydroponic equipment.
Mladenov was a big buyer, but defence lawyers argued it was not enough to establish reasonable grounds to suspect an offence was being committed.
When the District Court ruled the evidence was admissible, Mladenov and Burch took the case to the Court of Appeal, claiming police breached their "duty of candour" and provided incomplete and erroneous information in their application for the warrant.
The court, however, refused to hear the appeal, stating any errors by police were simply "careless" and there was no realistic prospect of the defendants’ success.
The trio pleaded guilty shortly after the ruling was released in November 2024, but there remained disputes over the summary of facts that would be placed before the judge for sentencing — to the point where it was finalised only days before this week’s hearing.
