Published : Wednesday, August 28, 2019 | 4:35 AM
Pasadena officials are currently looking into an allegation that “favorable treatment” was provided to at least one cannabis retail finalist in the City-administered process regulating the commercialization of marijuana sales, Pasadena Now has learned.
No criminal activity has been alleged, according to a City official.
Acknowledging the investigation, City spokesperson Lisa Derderian said Tuesday that “the complaint alleging favorable treatment had nothing to do with ranking or scoring of applicants. It concerned interaction with the successful applicants after the conclusion of the ranking and scoring process, and after the announcement of the successful applicants.”
“The City Attorney’s Office is looking into the matter,” said Derderian.
City Manager Steve Mermell added, “Given the significant amount of revenue that is associated with operating a cannabis business, it is no surprise that an applicant would seek to gain advantage over their competitors. We are looking into this to ensure that no cloud is cast on the process by third parties seeking to unravel it.”
City officials did not release any additional details about the allegation.
The June announcement of the six top-scoring finalists for cannabis retail shops has drawn a rash of complaints from losing or disqualified applicants. Most questioned the selection of businesses other than their own, or questioned the application process itself.
That application process then pitted the six accepted applicants against each other in a time-sensitive “land grab” for prime retail locations, with only one opportunity available for each Council District.
With the clock ticking to submit properly compliant, complex applications for the best locations, finalists vying to win a lucrative location apparently sought advantage.
One of the finalists whose application for a storefront was rejected has now filed an official complaint with the City.
The Atrium Group has filed a claim against the City for selecting The Harvest Group as the retail shop for Council District 3, alleging Pasadena’s decision to award The Harvest Group’s application for a plum Old Pasadena spot was the result of multiple errors by City staff.
In a letter to City Attorney Michele Bagneris, Planning Director David Reyes and other City officials, Atrium Chief Executive Officer Chris Berman said his team was “infuriated to learn … that the City has accepted the filing of a defective CUP [Conditional Use Permit] Application for a cannabis retail permit by Harvest.”
Berman continued, “The deficiencies in Harvest’s filing documents were both glaring and pervasive. These errors should have been immediately obvious had City staff made even the slightest effort during their review.”
Harvest Group CEO Steve White previously refused to comment on Atrium’s complaints.
Losing cannabis applicant Wow Health And Wellness, LLC, also filed an appeal with the City, pointing the finger at MME Pasadena Retail, Inc, alleging MME should have been disqualified because of legal woes it faces.