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Although his cannabis company didn’t secure one of Pasadena’s three or four coveted cannabis permits, SweetFlower founder and chief executive Tim Dodd isn’t planning to walk away from the Crown City anytime soon.

With a sharp, two-page letter addressed to the city’s Planning Commission this week, Dodd managed to derail the permit process for two of his company’s competitors, Med Men and Varda.

The Planning Commission on Wednesday was scheduled to consider giving the competitors their respective conditional use permits — the first of several permits needed to open a recreational cannabis store — but those votes were postponed because of Dodd’s letter questioning the validity of Med Men’s application.

It prompted Planning Director David Reyes to recommend delaying the vote as he pledged to investigate SweetFlower’s claims.

But wait, there’s more.

Dodd hasn’t been asleep at the wheel during the coronavirus lockdown, waiting for city hearings to resume. No, instead he’s tripled his efforts to go over the city’s head with a court ruling — or three, if he has his way.

SweetFlower had already turned to the courts once, suing the city to overturn Pasadena’s decision to reject the company’s application for a recreational cannabis permit.

However, since early March, SweetFlower has filed two more lawsuits, each targeting one of its competitors: Integral Dena and Harvest of Pasadena. Both companies have received conditional use permits from the city, effectively guaranteeing their chosen storefront locations; SweetFlower is contesting the validity of those permits and calling on the courts to answer lingering questions about the fairness of Pasadena’s retail cannabis permits.

If any of these companies falter — whether it’s Med Men, Integral, Harvest or Varda — it would open the door for Dodd’s SweetFlower to open a cannabis store in the city, potentially worth some tens of millions of dollars, officials have estimated.

All five of these companies were selected by city officials for an opportunity to secure the necessary permits and open a retail cannabis store in Pasadena. Officials later learned there may only be legal locations for three or four of them — it’s still a contested issue — prompting the city’s sixth selected company, the Atrium Group, to bow out with an undisclosed settlement after months of legal sparring with their competitors’ lawyers.

That leaves SweetFlower as the city’s sole top six cannabis company without a clear path to securing a storefront location — unless it can eliminate one of its competitors.

Med Men and Varda

Varda was never mentioned in Dodd’s letter to the Planning Commission, but the timing of its permit hearing was caught in the crossfire as the SweetFlower executive called officials’ attention to Med Men’s proposed storefront location — an illegal one, Dodd alleged — and significant changes in leadership since the company’s screening application was submitted in January 2019.

Representatives from Med Men did not respond to a request for comment.

Med Men’s proposed storefront location, 1 W. California Blvd., is just across the street from the Arroyos Treatment Center, an addiction and mental health clinic. By city law, dispensaries can’t be within 600 feet of any businesses that treat substance abuse disorders; Dodd told officials the facility was within 120 feet of Med Men’s proposed location.

Several city residents said the same in their own letters of opposition to the storefront, most calling attention to the treatment center, even though it wasn’t mentioned anywhere in the city’s lengthy staff report.

Responding to Dodd’s letter, Reyes called for a delay on the vote, promising city staff would do a thorough review of the allegations and report back to the Planning Commission.

The city should deny the company’s permit on this allegation alone, Dodd wrote, before he called attention to the company’s executive leadership — or lack thereof.

Listing a litany of executive leaders, ranging from the company’s chief executive to general counsel, nearly all of them have left the company since January 2019, Dodd wrote.

“Of the 10 individuals noted in Med Men’s initial January 2019 application as ‘owners’ or ‘key staff,’” Dodd wrote, “only one now remains.”

In a separate letter sent this week to City Manager Steve Mermell, Dodd called attention to Med Men’s mounting financial struggles, which have seen widespread media coverage for more than a year.

Turbulent times

In the letter to Mermell, Dodd shifted away from Med Men and trained his sights on the two companies which already clinched conditional use permits: Integral and Harvest.

Just this week, Harvest announced an $80 million deal with the High Times Holding Company, which owns the eponymous cannabis publication, to sell off at least 14 planned and already-operational California dispensaries.

The company offloaded all of its currently operational cannabis dispensaries, Dodd wrote, arguing “common sense requires” city officials to view Harvest’s attempts to finalize their remaining permits as “an exercise in preparing the entity for future sale to High Times.”

Ben Kimbro, a spokesman for Harvest, told this newsgroup Thursday the company was “not selling Pasadena to them. Definitely, unequivocally no.”

Harvest has seen some legal difficulties in other states, particularly Pennsylvania and Ohio, where their cannabis permits were in jeopardy. Dodd used this as another cudgel against city officials, saying standards had changed since the application process began in January 2019.

Then, Dodd wrote, the city wanted to know about any other cannabis permits companies may hold in any other state. Now, it’s limited exclusively to California, and that’s a problem when the company in question operates almost exclusively outside the state.

When asked for a response, city spokeswoman Lisa Derderian said by email: “The voters have made clear that they wish cannabis retailing in the city.  There are a number of groups who wish to undo the city’s licensing process; they include illegal operators as well as SweetFlower who has sued the city.  While we respect their position and will respond in full when staff’s review is complete.”

Integral is in the same boat as Harvest, Dodd said, save for the legal troubles — all of its operations in other states.

In his letter, Dodd alleged Integral’s Chief Executive Armen Yenenidijan had stepped down from his post at the company, but that’s not true says Integral lawyer Richard McDonald.

In an interview Thursday, McDonald said Yemenidijan had stepped down from his role as president of Integral’s parent company, Green Thumb Industries, but he was still steering the ship at Integral.

New lawsuits

SweetFlower has now filed two lawsuits against these two competitors, Integral and Harvest, while the first of the three was filed months earlier against the city.

While the allegations aren’t necessarily new — nearly all have been reported by this newsgroup in previous coverage — it’s the first time they’re being challenged in a court of law, not just a City Council hearing.

In the suits, SweetFlower alleges an unexpected requirement for a licensed surveyor was illegal and, even if it was legal, the company argues there were different standards applied to Harvest and Integral. All of their maps were prepared in a similar way, SweetFlower says, but two of the companies were given a thumbs up while SweetFlower was kicked to the back of the line.

It’s just one of several city standards that SweetFlower alleges were bent or broken as staff moved through the permit application process, however minute they may be.

For Harvest, SweetFlower is contesting the definition of a library, arguing it’s changed for staff. Its storefront is near a private library and bookstore.

With Integral, SweetFlower is questioning how the city measured distances between the storefront and a condominium complex and implies illegal coordination between city officials and the company’s representatives.

City officials have pushed back against these allegations time and time again, arguing the process was fair through-and-through.

Still, some members of the City Council — such as Vice Mayor Tyron Hampton — have called for scrapping the entire process and restarting.

“We’ve followed a process that is fair,” City Attorney Michele Bagneris said in an interview Wednesday. “And we think, as we defend these lawsuits, that we’ll prevail and continue to process the permits.” 

She views SweetFlower filing of two new lawsuits instead of adding on to its existing suit against the city as an attempt “to get around the defects in the prior lawsuit they filed.”

There’s a statute of limitations on adding new parties to an existing lawsuit and SweetFlower had exceeded it, Bagneris explained. The city is pushing back and asking a judge to stop these suits from going forward, as is McDonald, Integral’s lawyer.

“I don’t think it has any merit,” McDonald said of SweetFlower’s new lawsuit against Integral.

Dodd did not respond when asked if this was why SweetFlower filed additional lawsuits.

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