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Cannabis Dispensary Says Company Will Sue the City

MedMen set to seek relief in court after City Manager rejects application

Published on Thursday, September 3, 2020 | 1:22 pm

In a comment to Pasadena Now, a MedMen spokesperson said the cannabis dispensary has been treated unfairly and will file a lawsuit against the city.

“We believe the city has treated us unfairly and inconsistently from how they have treated other applicants, and the August 27th letter addressed to MedMen is flawed and filled with factual inaccuracies. We intend to seek relief in court,” a MedMen spokesperson said Thursday, one day after Pasadena Now reported the company’s application had been rejected.

MedMen (MME Pasadena), Harvest Pasadena, Integral LLC, Tony Fong, Atrium, and Sweetflower won the right to apply for the necessary permits to legally sell cannabis in Pasadena. So far, only Harvest, Integral, and Tony Fong have advanced in the process. Atrium and Sweetflower were disqualified on procedural issues.

But late last month, Mermell rejected MedMen’s application after an internal investigation revealed a material change in ownership and company management.

According to the city’s process, “A change of ownership and/or management is not allowed and is considered material where it constitutes a change of control.”

“It is my finding that there has been a material change in ownership and/or management in MedMen such that the evaluation and scoring of MedMen’s Application are no longer valid,” Mermell wrote in that Aug. 27 letter. “As such, it is my decision that: there is a change of control, MedMen has lost the right to proceed through the cannabis permitting process, and MedMen’s Application is hereby rejected.”

According to Mermell, nine out of 10 applicants listed as owners on MedMen’s applications in the city’s process have changed since the company was chosen to move forward in the process, including Adam Bierman, who served as the company’s chief executive officer, Chief Operating Officer Ben Cook and MedMen President Andrew Modlin.

Gotham Green acquired 31.9 percent of the company’s voting power and 575,434,313 shares, which makes it the second-largest shareholder in the company.

“The city concludes that Gotham Green, with 31.9 percent of the total voting power and as the second-largest shareholder, has the ability to control management and the direction of MedMen,” according to Mermell’s letter.

The application process placed high importance in previous experience and demonstrated knowledge of the cannabis industry, which Biernan Cook and Modlin possess.

In his letter, Mermell said the new leaders in the company do not have a cannabis background.

“Notably, MedMen provided little to no evidence of cannabis experience of its current management team and Board of Directors, who appear to have primarily retail and food and beverage experience at retailers such as Frederick’s of Hollywood, David’s Bridal, Guess, Coffee Bean & Tea Leaf, and Whole Foods,” Mermell wrote. “No evidence was provided that any of the current management team have comparable cannabis permit experience, such as that provided by Bierman, Modlin and Cook.”

When asked to comment on Thursday city officials referred Pasadena Now back to the letter sent to MedMen officials.

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