So who’s funding the campaign to put on the November ballot a measure that would void much of the City of West Hollywood’s cannabis licensing process?
According to “Close the Loopholes,” the group that is organizing the campaign, its major donors to date are MedMen West Hollywood, the United Food and Commercial Workers Local 770, and Alex Kardos, partner and founder of Where Eagles Fly LLC, which qualified for a cannabis consumption lounge license from the City of West Hollywood in 2018. The required posting of the top donors on the Close the Loopholes website doesn’t disclose the amount of those donations. However state law requires that any donors of $50,000 or more must be disclosed.
On its website, Close the Loopholes “the commonsense Close the Loopholes initiative combines medical cannabis licenses with adult-use licenses to create one license at the local level and align with state law. It also allows edible-only consumption lounges to offer consumption of all types of cannabis products and removes local roadblocks that prevent licensees from serving our community.”
The changes the group is asking the City Council to make in its cannabis ordinance would mean the four original medical cannabis dispensaries would be able to obtain permanent licenses to sell recreational cannabis.
None of those four, which include MedMen, Alternative Herbal Health Services, Los Angeles Patients and Caregivers Group, and Zen Healing Collective, qualified for a permanent recreational sales license after a detailed assessment by an independent committee of more 300 applications for licenses in eight categories. The City Council granted temporary recreational sales licenses to the four original medical license holders that are set to expire on Jan. 1, 2021.
If the City Council declines to implement the changes Close the Loopholes is requesting, the proposal could go on the Nov. 3 general election ballot if the group gets the signatures of at least 10% of the city’s 28,159 registered voters on its petition.
The petition also will ask that the city’s cannabis ordinance be amended to combine the two types of cannabis consumption lounge licenses granted by the city into one license. The city has granted eight licenses to businesses that offer edible cannabis products and eight to businesses that permit smoking and vaping of cannabis on-site.
Owners of the original medical cannabis dispensaries have said their businesses will not be profitable if they cannot also sell recreational cannabis.
MedMen is the only one of the four original medical cannabis retailers whose financials are made public. That is because its stock is traded on the Canadian Stock Exchange, where cannabis sales are legal on a national basis. It has struggled financially in recent months. On Wednesday it reported a loss in the second quarter of its fiscal year of $74.78 million, 18% higher than its loss of $63.2 million in the same period in 2019. The company has struggled to pay vendors, issuing stock to some of them in lieu of cash payments, and it has announced major layoffs.
MedMen filed a petition in L.A. Superior Court on Sept. 4 to void the city’s process for vetting applications for permanent recreational cannabis licenses.