Lawyers for two cannabis companies that finished in the top six of the city’s approval process have sent letters to the City Council asking that the cannabis ordinance not be amended.
The City Council is scheduled to hold a public hearing on
Monday to discuss proposed changes that would shorten the distance between dispensaries from 1,000 feet to 450 feet and allow more than one dispensary per council district, provided the dispensary finished in the top six of the city’s selection process.
“To change the rules now to allow competitors within 450 feet of these secured locations is unfair, subject to legal challenge, and contrary to the intent of Measure CC which was designed to avoid concentration by requiring dispensaries to be spread throughout the City,” said attorney Richard McDonald, who represents Integral, one of the cannabis companies that made it through the city’s approval process and successfully acquired the necessary permits to sell cannabis in Pasadena.
MedMen (MME Pasadena), Harvest Pasadena, Integral LLC, Tony Fong (Varda), Atrium, and Sweetflower won the right to apply for the necessary permits to legally sell cannabis in Pasadena in 2019.
According to McDonald, Varda and Harvest also oppose the changes.
So far, only Integral and Tony Fong received commercial cannabis permits and have opened for business. Harvest received a conditional use permit, but so far has not opened shop.
Sweetflower was eliminated for not including required documents in its application, and Atrium was removed after Harvest successfully applied to do business in District 3. Both companies unsuccessfully attempted to sue the city. MedMen was disqualified following a city investigation.
The six companies successfully wended their way through the city’s process which was set up after voters overwhelmingly approved Measure CC.
The measure, which allows up to six dispensaries to operate in Pasadena, passed with 63 percent of the vote in 2018. The ordinance also allowed the council to retain the authority to amend existing ordinances and adopt future ordinances regarding commercial cannabis business activities.
The council placed the measure on the ballot after initially voting down an ordinance that would have allowed for the sale of cannabis, but did an about-face when cannabis supporters began making efforts to get a measure on the ballot that could have allowed an unlimited number of dispensaries to operate in Pasadena.
But based on distance locations in the city’s ordinance and available locations, city officials later estimated only three dispensaries would probably open.
“This proposed amendment is inequitable to the people of Pasadena and to all licensed and pending cannabis retailers in the city,” according to lawyers with the L.A.-based firm Glaser,
Weil, Fink, Howard, Avchen & Shapiro.
“Moreover, the proposed amendment would be especially prejudicial to MedMen and to other similarly situated cannabis license applicants because it would change the rules which supplied the basis upon which applications were submitted, real estate was obtained, and conditional use permits were pursued, to now allow direct competition against approved licensees within their respective Council Districts,” the firm wrote.
Ironically, MedMen is suing the city and wants the entire process stopped.
City Manager Steve Mermell kicked the company out of the process after determining the dispensary had undergone a material change of ownership.
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.”
This is the second time the proposed changes have come before the City Council.
In 2019, the council shot down an effort to amend the cannabis ordinance when it tabled a motion that would have changed the law to allow up to three dispensaries to operate in each of the city’s council districts.
At that meeting, the mayor and council were asked to revisit the discussion on the city’s cannabis regulations once three cannabis retailers are operational so that staff could evaluate the impacts on the city and the cannabis market, but three cannabis retailers have never been legally operating in the city.
During that hearing, several council members expressed concern that changing the ordinance would go against the will of the voters and 41 people sent correspondence opposing the change.
“First, this is the second time this proposal is being made. The first was on November 25, 2019, when the City Council unanimously expressed serious concerns and opposition, as well as requested additional analyses evaluating the impacts on the city and the cannabis market after three cannabis retailers were
‘operational,’” McDonald wrote.
“Prior to that, on November 13, 2019, the Planning Commission voted 6-1 that there be ‘no change’ to the existing regulations at all. Nothing has changed since then. No additional analyses have been done, no additional options have been considered, and no evaluation of the impacts has been conducted as requested,” he wrote.
“Three cannabis retailers also have not become operational. To consider this amendment without any compelling reason or evidence that the amendment is necessary is unjustified, unwarranted, unnecessary and at best premature,” he wrote.