Passed Over Cannabis Applicants Prepare To Do Legal Battle With City

Published : Thursday, July 25, 2019 | 5:26 AM

[Updated]  It was probably more a matter of “when” than “if” one or more spurned cannabis license applicants would sue the City of Pasadena over the process by which they were not picked, and that “when” might be soon.

Damian Martin, an attorney, cannabis consultant, and an owner of rejected applicant WOW Health and Wellness, said he’s preparing a letter of intent to sue for the Pasadena City Council’s purview.

“We are doing the lawsuit,” he told Pasadena Now. “It’s just a matter of time.”

One of WOW’s complaints is the claim that, following the rejection it wanted to appeal, Pasadena’s Planning Department posted a “no appeals” rule on the City’s cannabis web page.

Put another way, WOW owners say a “no appeals” provision was made public only after WOW was told there was such a policy. Martin thinks that’s fishy.

He said the Pasadena Municipal Code provides that all Planning Department decisions have the right to an appeal.

In a July 15 email to City Attorney Michele Bagneris and other City departments, Martin suggested the City Council would be wise to permit the appeal, thereby allowing it to short-circuit “the 11 or so forthcoming lawsuits,” because complainants would have to exhaust the administrative process before they could file.

“I’ll do a letter to the City Council telling them that we’re going to sue,” said Martin. “I’ll attach the complaint to the letter and, if we don’t hear any positive grounds for acceptance of our appeal, we’ll file a lawsuit.”

The ultimate goal, he said, “is that the city implement this process in accordance with the law,” said Martin, referring to appeals.

What WOW would appeal was the application scoring process. Martin’s argument is that Measure CC specified a three-person review of the application, while the City only assigned one person to review each application.

The applications do, in fact, only bear one name from consultant HDL at the top.

“Upfront they tell you you’re going to have three people score your application,” he explained. “They charge you $13,000 and then they only have one person score your application and essentially make $6,000. The rest of that money that was allocated to having this three-person committee established goes right into the City’s pocket.”

Martin did not sound optimistic about avoiding litigation.

“I’ve gotten into more than a few tussles with cities at this point,” he said. “City councils are reluctant to overturn staff even when they’re egregiously wrong. So I don’t have a lot of faith.”

WOW finished a modest 56th place out of 122 license applicants. Brick & Rose came in seventh place, one point out of the running. It has been making noises about the application of winner Harvest of Pasadena and the advantages it alleges the City has extended that particular company.

City Manager Steve Mermell has responded to a number of Brick & Rose missive’s with statements of support for the process, which he indicated he believes to have been detailed and stringent.

Harvest says it did a “great job” on the application and that’s why it is preparing a shop in Old Pasadena.

Those kind of responses have led Brick & Rose to also prepare a lawsuit, according to spokesman Larry Mondragon.

“Unless we see something change,” he pledged. “I really want to see the City recognize that they haven’t followed the rules and to apply them fairly and consistently. If they would simply do that through an appeals hearing or before the city council.”

Of course, hearings have votes and outcomes.

If the City were to make such an admission, it might follow that some winner, or others, might have to be disqualified and some of the runner-ups rendered eligible to file for the conditional use permit that eludes them now.

Planning Director David Reyes said in a July 18, 2019, Status Report that the public online posting of information about the cannabis permitting process has been done as quickly as the City could but conceded that even after retaining additional staffing there is at times a “short delay” in getting material posted.

“Unfortunately, not posting material fast enough” has created problems, Reyes said, which apparently now includes the claims that the “no appeals” policy was concealed or concocted after the fact.

“There is a strong economic incentive to challenge other applicants and the process,” he said.

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