Multistate cannabis operator, MedMen Enterprises, will not receive the conditional-use permit it needs to begin its retail outlet in Pasadena, California. The company has been rejected on account of some material changes that include management upheaval and instability.
Even with MedMen being so well-known in the industry, the company is being penalized because of its unstable management and ownership. This is a demonstration that Pasadena won’t tolerate instability from canna-businesses operating in this sector.
But this isn’t the only time MedMen has had issues with its operations in Pasadena. In June 2019, L.A. Cannabis News reported that MedMen was facing increased scrutiny from the city due a former employee lawsuit alleging racial and sexual discrimination by the CEO.
L.A. Cannabis News also reported that on August 27, City Manager Steve Mermell wrote the following to the officials at MedMen: “It is my finding that there has been a material change in ownership and/or management in MedMen such that the evaluation and scoring of MedMen’s Application is no longer valid. As such, it is my decision that: there is a change of control, MedMen has lost the right to proceed through the cannabis permitting process, and MedMen’s Application is hereby rejected.”
A MedMen spokesman addressed Mermell’s letter to Pasadena Now: “We believe that the city has treated us unfairly and inconsistently from how they have treated other applicants, and the August 27th letter addressed to MedMen is flawed and filled with factual inaccuracies. We intend to seek relief in court.”
MedMen (MME Pasadena), Harvest Pasadena, Integral LLC, Tony Fong Atrium and Sweetflower have won the right to apply for permits that would legally allow them to sell cannabis in Pasadena. However, Harvest, Integral and Tony Fong have gotten past the initial stage in this process. Sweetflower and Atrium have been disqualified on account of procedural problems.
MedMen has now been rejected after an internal investigation showed a material change in company management and ownership. This violates the city’s process that states, “A change of ownership and/or management is not allowed and is considered material where it constitutes a change of control.”
Marijuana Business Daily reports that the letter from the city manager to MedMen’s officials highlighted that nine of the 10 MedMen owners listed in the company’s original application have changed since they applied. This includes former CEO Adam Bierman and ex-President, Andrew Modlin.
Both owners have departed from MedMen’s board in June following the resignation of their leadership positions in January. With the apparent instability within MedMen, Pasadena’s regulators have showcased they’re keen to exclude unstable canna-companies exhibiting these characteristics from operating in the city.