- Advertisement -
More
    - Advertisement -
    - Advertisement -
    HomeNewsWeHo Business License Commission Gives MedMen Second Chance Despite Legal Woes

    WeHo Business License Commission Gives MedMen Second Chance Despite Legal Woes

    - Advertisement -

    On Tuesday, July 11, the West Hollywood Business License Commission convened to discuss revoking MedMen‘s medical marijuana business license (#CLM-000001) for failure to pay taxes and for entering into a new business licensing agreement with the company One Plant without the commission’s approval. The vote concluded 5 to 2, with MedMen’s cannabis license not being revoked but subject to several conditions to keep their license.

    MedMen is one of West Hollywood’s four legacy cannabis dispensaries, which are special licenses for medical dispensaries that existed before newer cannabis regulations were enacted through the legalization of marijuana.

    MedMen was found to have violated city ordinance by entering into a “management services agreement” with Captor Retail Group Inc., aka One Plant and Pharmacy Collective, without the Business License Commission’s approval, in violation of WHMC 5.70.035(b)7. A notice of violation was issued on April 23, 2024. The management agreement with One Plant was terminated on May 17. MedMen was also found in violation of WHMC 3.36.040(n) for failure to pay business taxes to the city.

    MedMen Enterprises Inc. filed for bankruptcy in Canada on April 24, and the American parent company MMCAN USA, Inc.’s assets were taken over by court receiver Richard Ormond, who was appointed by the court on May 1, taking control of dispensaries spanning over five states. Before Tuesday night’s meeting, MedMen had begun the process of correcting and paying off their taxes for December 2023 and January 2024 but still owes unpaid taxes and fines. Mr. Ormond’s responsibilities include running MMCAN USA Inc., paying back the company’s creditors, and ensuring the company operates legally. He claims that once he saw the violations, he began working on terminating agreements and fixing regulatory violations. Mr. Ormond explained it took him one week to complete the termination after being made aware of the violation, claiming he was getting 500-600 emails a day over regulatory issues across the country and did not realize the severity of the situation in West Hollywood. Upon realization, he claims to have acted quickly to begin rectifying the situation.

    The CFO resigned when the court receiver was appointed, adding to part of the difficulty and current delay. Ormond claims the company is on track to pay all current and upcoming taxes on top of the owed taxes and fees, with the overdue taxes and penalties paid by the end of June.

    Mr. Ormond thinks this location is profitable and there will be a benefit if it’s allowed to continue operating to generate revenue to pay back the creditors, unlike other MedMen dispensaries he has or is in the process of shutting down. “This is going to be a long process. There are a lot of moving parts and a lot of claimants,” according to Mr. Ormond.

    During the public comment portion, Jay Handal, one of the owners of the Woods and Holy Water, another local dispensary, urged the council to “enforce the law” on the MedMen dispensary because they are a “bad operator in the city that should not allow bad operators.” Subsequently, he recommended the council go with the staff report’s decision.

    Mr. Ormond retorted in his rebuttal that he is a court-appointed officer and is only here to take operational control to fix a complicated situation, trying to make the company compliant and remain as such. The profit generated will go into a trust paying back creditors unless, in the unlikely situation, the original owners can regain control. There are goals of changing management and ownership of the company, as the receivership plans to dissolve the parent company and transfer the assets. If the receivership transferred the assets to another company, the variance process would only allow 75% of the company to be given away, and 25% would likely remain in a creditors’ trust managed by a trustee.

    There are only five corporate employees left from before the receivership, while around 110 retail employees are still employed by MMCAN USA. Fourteen of these employees are employed at the West Hollywood MedMen dispensary. “The bad apples have left the company,” according to Robert. Before the bankruptcy, MedMen was a disorganized company that had a breakdown in communication leading to the company’s current issues, according to Jessica Carr, the Senior Alliance Manager of MedMen.

    Deliberation from the commission tended to heavily condemn MedMen’s past actions, with Commissioner Danny Hang stating, “I am looking at it from the perspective of if we do not revoke the cannabis license and it sets a bad precedent for all other cannabis dispensaries here to pay taxes, we have rules for a reason.” Then Commissioner Yusupov expanded on the discussion, saying that the bad apples are gone, and it would be more beneficial to keep MedMen open rather than have another empty storefront in West Hollywood.

    Deliberations started with a motion to adopt the staff resolution, with only Commissioners Barry and Vulin voting in favor. Commissioner Cockeram then motioned for a resolution that requires conditioning MedMen, and based on the foregoing findings, the Business License Commission hereby denies the revocation of the cannabis legacy medical business. However, since the findings for revocation can be made, the Commission instead determined to condition BLC 21-0007 that if any other violations are found to exist through December 31, 2027, the business license will be immediately brought back before the Business License Commission for a revocation hearing. This condition carries through on any business license renewal through this period. The business also must pay back taxes and any outstanding fees by June 21, 2024. The vote concluded 5-2, with Commissioners Barry and Vulin as the two dissenting votes.

    5 2 votes
    Article Rating
    - Advertisement -
    Jake Crandall
    Jake Crandall
    Jake Crandall is a gonzo journalist and photojournalist based out of Hollywood. A self-described beatnik from the Bay Area who is currently attending Santa Monica College.

    1 COMMENT

    Subscribe
    Notify of
    guest
    1 Comment: We Want to Hear from You!
    newest
    oldest most voted
    Inline Feedbacks
    View all comments
    Jim Nasium
    Jim Nasium
    Offline
    1 month ago

    What do you expect from the Business License and Pot Commission.

    RELATED ARTICLES
    - Advertisment -

    Recent Comments On WEHO TIMES

    Latest Articles

    1
    0
    Would love your thoughts, please comment.x