Medmen gets lifeline from Business License Commission

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West Hollywood’s Business License Commission decided not to revoke MedMen’s business license, despite the cannabis outlet’s ongoing legal and management issues. MedMen had violated tax laws since December 2023 and their management agreement since February 2024.

Commissioners expressed disappointment, noting MedMen’s historical significance and previous compliance, but emphasized the importance of upholding regulations. They discussed various options: modifying the permit, suspending the license, or revoking it entirely. City Attorney Lauren Langer reviewed these options, including a probationary period where any further violations would trigger a revocation hearing.

The discussion focused on the license’s natural expiration on June 30th and its renewal considering the violations. They considered conditions like a probationary period until December 31, 2027, which would trigger a revocation hearing for any future violations. Some commissioners preferred a shorter probationary period.

A motion was made to condition the license with the requirement that any further violations would result in an immediate revocation hearing. This motion was seconded, and further discussion clarified the intent and implications. The commission also added a condition that all past due taxes and penalties be paid by June 30, 2024, maintaining the probationary period until December 31, 2027.

The meeting clarified that the violations included unpaid taxes and issues with the management agreement, investigated and documented by the code enforcement team. Even minor infractions could be considered violations under city regulations.

The role of the court-appointed receiver, Mr. Orman, who took steps to correct some issues, was highlighted. The license revocation aimed at MedMen, not the receiver. The receiver’s actions did not negate MedMen’s original violations.

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There were concerns about future compliance if MedMen regained control after the receiver’s temporary role. City regulations limit the transfer of legacy business licenses, complicating potential sales or transfers. The staff recommended revoking the license to maintain regulatory standards and accountability.

The commission clarified the differences between legacy and regular licenses, emphasizing the unique status and requirements of legacy businesses. This was the first known instance of a cannabis business failing to pay taxes and operating without proper agreements in West Hollywood. Penalties for delinquent taxes were explained, confirming MedMen had paid penalties for the months they recently settled.

The conversation turned to MedMen’s terminated management agreement with One Plant and whether MedMen had paid their regular sales tax. The finance department handles tax collection, typically sending reminders to businesses about their tax obligations.

The possibility of automatic renewal of MedMen’s license after June 30, 2024, was noted. Typically, licenses are renewed annually unless there are outstanding issues. Public comments included Richard Orman explaining his steps to rectify the violations and arguing for keeping the business open for its value to creditors and the community.

Representatives from non-legacy cannabis businesses urged the commission to enforce regulations strictly, emphasizing fairness and integrity within the city’s cannabis industry. The city attorney clarified that MedMen’s operations were legal following the termination of their improper management agreement until a final decision was made.

Orman detailed the steps taken to address violations, including terminating the improper management agreement and paying delinquent taxes. He assured the commission of his commitment to compliance and maintaining the business’s value. Orman highlighted his communication with city officials and the actions taken once violations were identified.

The commission asked about MedMen’s financial stability and plans to ensure ongoing compliance. Orman provided reassurances and detailed efforts to stabilize operations during the receivership. He emphasized the importance of maintaining the business for community benefit and the complexities involved in the receivership process.

The commission’s decision balanced regulatory compliance with supporting MedMen as a legacy business. They voted on a motion to conditionally allow MedMen to continue operating, emphasizing strict oversight and immediate action if further violations occurred. This aimed to ensure compliance while giving MedMen a chance to address past issues and maintain their legacy status.

 

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Equal Opportunity
Equal Opportunity
1 month ago

MedMen’s win is our win. I don’t have to pay my taxes and I can rest easy knowing the city will not cancel my license. If they do, another lawsuit. Thank you WeHo.

Bullwinkle
Bullwinkle
1 month ago

Did you see the look on Danny Rivas face when Jordan Cockeram asked what he would do in his personal opinion only to be rebuffed, your the commissioner stupid.

Cringe
Cringe
1 month ago
Reply to  Bullwinkle

That was uncomfortable to watch. The commissioner seemed too comfortable asking Danny what he would do. Is this what happens behind the scenes?

JF1
JF1
1 month ago

I guess city can’t afford to lose another business…even one that should no longer be operating. Shameful that the commissioners were so uneducated on things…quite embarrassing.

Last edited 1 month ago by JF1
Jim Nasium
Jim Nasium
1 month ago
Reply to  JF1

Embarrassing is an understatement.

John Arnold
John Arnold
1 month ago

The deliberations were painful to watch, with some newer commissioners appearing completely clueless and others flip-flopping around the issue.

Larry Block
1 month ago
Reply to  John Arnold

This is true. I was shocked at the lack of knowledge of bankruptcy or receivership from those sitting on a business license commission. Staff recommended to revoke the license, a rare occurance after so many violations and non-payment of taxes, and the commission balked. They showed so much weakness that non payment of taxes for 6 months is an acceptable practice in the City of West Hollywood! Some commissioners seemed unaware of the rules of a ‘legacy’ license in which the ownership must remain to the original owners.

Steve Martin
Steve Martin
1 month ago
Reply to  Larry Block

Agreed. Perhaps the staff report was perfunctory given that the recommendation was to revoke the license, which staff would only recommend in extreme circumstances. A lot of the newer commissioners have little background or history with the City so staff needs to be more informative as to the history and rationale for City policies. Obviously there is a learning curve but we need to make that process as easy as possible for Commission and Board members. That said, what a strange outcome. Had Med Men lost their license, it would have opened up a new opportunity for a new and… Read more »

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