MedMen likely to lose cannabis license

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West Hollywood’s Business License Commission is set to hold a public hearing Tuesday regarding the potential revocation of Cannabis Legacy Medical Business License No. CLM-000001 held by The Farmacy Collective, operating as MedMen WeHo.

City Hall is recommending that the commission revoke MedMen’s license due to various compliance issues. This resolution comes after a series of events and legal actions involving the business’s operations and adherence to city regulations.

Historically, West Hollywood has hosted four medical cannabis dispensaries since the mid-2000s. These dispensaries were allowed to transition to adult use sales following the passage of Proposition 64 and updates to the city’s cannabis ordinance. Amendments in August 2020 led to the creation of a new Legacy Medical Business License, intended for these existing businesses, including MedMen. These licenses came with strict operational guidelines, including a prohibition on entering new management agreements without explicit city approval.

MedMen received its Cannabis Legacy Medical Business License in June 2021 under several conditions detailed in the city’s cannabis ordinance. However, in January 2024, MedMen notified the city of a temporary closure due to restructuring and financial needs. In March 2024, MedMen resumed operations and disclosed a new management agreement with Captor Retail Group, Inc., aka OnePlant, to manage various aspects of its operations, an agreement not previously approved by the city.

The city staff conducted multiple inspections and held meetings with MedMen representatives to clarify and enforce compliance with the licensing conditions. Despite warnings and citations, MedMen continued to operate under the unapproved management agreement. This led to the issuance of a Notice of Violation and subsequent administrative citations against MedMen for breaching the city’s cannabis ordinance by failing to operate independently of OnePlant.

On April 24, 2024, Richard Ormond, a representative from MedMen, was appointed as the Receiver over MedMen’s assets by the Los Angeles Superior Court, with a follow-up court hearing scheduled to confirm this appointment and to address the business’s future operations. This court action indicated escalating legal challenges facing MedMen, affecting its ability to operate in compliance with city regulations.

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Despite legal interventions, city inspections in early May 2024 confirmed ongoing violations related to the unauthorized management agreement with OnePlant. These repeated violations led to further administrative actions and the scheduling of a public hearing to consider the revocation of MedMen’s business license.

By the end of May 2024, MedMen had made efforts to terminate its agreement with OnePlant and indicated intentions to manage the business independently. However, the city’s ongoing inspections revealed that the business’s operations were still tied to external entities, raising concerns about MedMen’s capability to comply fully with city regulations and licensing conditions.

In addition to operational non-compliance, MedMen had also failed to report and pay business taxes for several months, compounding their administrative and legal troubles. This failure to fulfill financial obligations to the city, coupled with the ongoing legal and operational challenges, prompted the West Hollywood Business License Commission to move forward with the revocation hearing, underscoring the city’s commitment to stringent regulatory enforcement and compliance in its cannabis market.

The Business License Commission holds the authority to take various actions regarding business licenses, including conditioning, modifying, suspending, or revoking them. This authority applies to any business that requires a license under Chapter 5 of the West Hollywood Municipal Code (WHMC). The Commission may act if it finds violations of federal or state laws, the City’s Business License Ordinance, the City Municipal Code, or any other statutes, rules, or regulations connected to the business premises or its licensed activities.

Specific grounds for revocation include the failure of a licensee, including its employees, agents, or manager, to adhere to any conditions or restrictions set forth by their license. Additionally, violations of any rules or regulations set by the Commission related to the business’s operations can also lead to revocation. For cannabis businesses specifically, a failure to pay applicable taxes and fees to the City for a period of three months is also grounds for revocation, as stated in WHMC §5.70.070(b).

The staff report highlights the case of MedMen, a cannabis business in West Hollywood, which has committed multiple violations of the Municipal Code. Notably, MedMen entered into a new management agreement without obtaining the necessary variance, a requirement under WHMC §5.70.035(b)(7). Furthermore, MedMen has also failed to pay required business taxes, as mandated by WHMC §3.36.040(n), marking another breach of city regulations.

The City has made several efforts to rectify these violations through meetings, a Notice of Violation, and issuing administrative citations. Despite these attempts, MedMen continued its operations under a management agreement that lacked proper approval through the variance process required by the City’s cannabis ordinance. This ongoing defiance occurred despite the City’s clear communication and the outlined processes for obtaining such agreements legally.

The failure of MedMen to adhere to the city’s financial obligations—specifically the non-payment of business taxes for several months—further complicates their position. This financial delinquency includes periods both before and after the appointment of a Receiver for the business, indicating a sustained neglect of fiscal responsibilities to the city.

Based on these findings and the continued violations despite multiple interventions by the City, staff recommends that the Business License Commission consider revoking MedMen’s Cannabis Legacy Medical Business License. The recommendation is grounded on multiple sections of the WHMC that MedMen has violated, underscoring a pattern of non-compliance that affects both the legal and operational frameworks set forth by the city for licensed businesses.

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David Reid
David Reid
13 days ago

I wish the powers-that-be would go after litterbugs with this force and follow through!

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