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City Manager Removes Marijuana Dispensary From City Process to Open Pasadena Store

Dispensary’s application rejected after material changes in company

Published on Wednesday, September 2, 2020 | 10:56 am
 
Steve Mermell

[UPDATED] According to a document obtained by Pasadena Now, a cannabis dispensary seeking a Conditional Use Permit has been removed from the city process due to personnel changes in the company that led to a change of control of the cannabis operation.

In an Aug. 27 letter addressed to officials at MedMen (which applied as MME Pasadena), City Manager Steve Mermell wrote, “ 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change in ownership and/or management in MedMen such that the evaluation and scoring of MedMen’s Application is no longer valid. 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 hearby rejected.”

The decision came after a remote interview in July. The company submitted more material shortly after the interview.

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.”

Gotham Green acquired a beneficial ownership in the control and maintains 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.

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.

MedMen was scheduled to go before the Planning Commission in April, but that meeting was canceled after city officials began investigating claims regarding the layoffs, failed transactions and financial condition within the organization.

MedMen planned to do business, 536 S. Fair Oaks Ave. near Huntington Hospital, and less than 300 feet away from a substance abuse drug recovery center. That would violate the city’s ordinance requiring dispensaries to be at least 600 feet away from schools, recovery centers and churches.

Five companies were chosen to advance in the city’s process, two of those companies Atrium and SweetFlower have been denied Conditional Use Permits.

Integral, Harvest Pasadena and Tony Varda have received Conditional Use Permits and have advanced in the process.

On June 5, 2019, the same day that the City announced the initial selection results of the cannabis screening application process, Green Thumb Industries Inc. (“GTI”), completed a $290 million acquisition of MedMen.

“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.”

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