The City of Pasadena's cannabis permitting process has proven to be a failure and should be stopped and overhauled for three principal reasons.
First, the application process was unfairly designed in a way that favored only the wealthiest people and companies. Second, the screening process to determine the final 6 applicants appears to have been conducted improperly and contrary to the procedures adopted by the people of Pasadena. Third, the conditional use process has been mishandled and has favored certain applicants.
According to standard industry projections, the Pasadena retail cannabis market will generate more than $34 million a year in sales from Pasadena residents alone (and as much as $82 million a year if the population of adjacent communities are included in the calculations). Based on current stock market valuations, a cannabis business with $34 million in sales has a stock market value of at least $136 million and perhaps as much as $300 million. That’s a lot of incentive for “Big Cannabis” to game the system.
This incredible wealth opportunity should have been preserved for Pasadena residents and people whose lives were ruined because of very harsh and restrictive marijuana laws. Instead, the application process awarded points based on size and experience in a way that favored only the richest, most elite operators who otherwise have no connection to or interest in Pasadena. It now appears that the Pasadena cannabis market is set to be largely dominated by only three operators, two of which are multi-billion-dollar corporations. This monopoly will lead to black-market sales and the drug turf wars engaged in by street gangs. The City’s application process placed its thumb on the scale of fair dealing and pressed heavily against Pasadena resident businesses, which I find disturbing.
Additionally, the screening process to determine the six applicants who would be allowed to seek a license was flawed, if not designed to favor Big Cannabis. Pasadena’s cannabis ordinance required each application to be separately scored by three different individuals and then their scores would be totaled and averaged. Instead, three of the top six applicants appear to have been scored by just one person, a former Supervisor of Humboldt County, a place known for illegal marijuana production and distribution before California legalized cannabis. The remaining three applicants also appear to have been scored by just one person, a former State of Colorado marijuana investigator. Thus, this incredible wealth opportunity was not determined by a team of three people whose scores were totaled and averaged, as the law requires, but instead were awarded to each of the finalists by just one person, with interests beyond Pasadena.
The City Charter authorizes any Councilmember to make inquires of City staff. On October 10, 2019, I asked the Planning Department to tell me in writing if three separate people scored each screening application and if those scores totaled and averaged to derive the final score, as the law requires. To date, I have yet to receive a response to my question.
Further, I pointed out to the Planning Department and the City Manager that the contract with HDL (the firm hired to score applications) did not comply with Pasadena’s scoring requirements as outlined in the municipal code.
Finally, City staff have badly mishandled the conditional use process. City staff have unfairly and inconsistently applied the rules to the applicants and have ignored the plain meaning of the City’s cannabis ordinance.
In summary, Pasadena’s cannabis process should be stopped and restarted in a way that restores fairness and favors local ownership over mega-business corporations with no connection to Pasadena.