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Cannabis Operator Drops Lawsuit Against City

WOW claimed the city’s selection process covertly changed rules in selection process

Published on Wednesday, February 17, 2021 | 9:43 am

A cannabis operator suing the city to invalidate its cannabis selection process dropped its lawsuit on Tuesday after an appeals court ruled that an anti-SLAPP motion against the operator could move forward.

WOW Health and Wellness filed a lawsuit after failing to move forward in the city’s cannabis selection process. The lawsuit attempted to invalidate Pasadena’s entire cannabis selection process.

A SLAPP, or strategic lawsuit against public participation, is a lawsuit intended to censor, intimidate and silence critics by burdening them with the cost of a legal defense until they abandon their criticism or opposition. 

“WOW and Harvest entered into an enforceable settlement agreement pursuant to which WOW and Harvest mutually agreed that WOW is to dismiss the entire [lawsuit] with prejudice and Harvest is to dismiss the entire appeal with prejudice with both parties bearing their own court costs and attorney’s fees,” according to court documents.

After finishing in 56th place, WOW owner and attorney Damian Martin unsuccessfully attempted to appeal the city’s decision.

The company sought to appeal the application scoring process by claiming that Measure CC, the ballot measure that allowed recreational marijuana sales in Pasadena, specified a three-person review of the application, while the city only assigned one person to review each application.

Sixty-three percent of the local voters in June 2018 approved Measure CC, which allows up to six marijuana dispensaries to operate in Pasadena. Voters also allowed the council to retain the authority to amend existing ordinances and adopt future ordinances regarding commercial cannabis business activities.

Less than a month later, Martin accused Planning Director David Reyes of covertly changing the rules of the process in a “secret, illegal, and total underhanded fashion.”

The lawsuit listed the other 121 companies that participated in the process as real parties in interest. 

Harvest of Pasadena, which finished in the top five and was selected to apply for a conditional use permit in District 3 filed an anti-SLAPP motion, asking the court to dismiss WOW’s lawsuit.  

The state’s anti-SLAPP law allows defendants to seek the dismissal of a complaint early in the lawsuit process before the discovery process begins.

The trial court denied Harvest’s motion, but the company’s lawyers filed an appeal. In late January, WOW filed a motion to dismiss Harvest’s appeal, but the court of appeals denied WOW’s motion, ruling that Harvest’s appeal could move forward.  

After the court denied WOW’s motion, WOW agreed to dismiss its lawsuit against all parties. 

In March 2020, Harvest used the anti-SLAPP statute against the Atrium Group to force the dismissal of a lawsuit Atrium filed in the U.S. District Court.

In June, the city announced that Harvest, Integral Associates Dena, Tony Fong, The Atrium Group, SweetFlower Pasadena and MME Pasadena Retail scored the highest in the city’s selection process.

SweetFlower and Atrium did not move forward in the process and MME was removed by the city after an investigation determined a material change in ownership and company management.

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