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In a letter to Oregon lawmakers, the most powerful cannabis business guild in Oregon today rebuked La Mota, the second-largest dispensary chain in the state, whose owners are embroiled in controversy due to millions in tax liens, lawsuits alleging nonpayment of bills and—most notably—a contract with Secretary of State Shemia Fagan.
“Companies that display a flagrant disregard for state laws and fair business practices have no place in Oregon’s cannabis industry,” wrote the Cannabis Industry Alliance of Oregon. “The owners of La Mota have funded and accomplished their expansion by remaining in significant arrears with the Oregon Department of Revenue and IRS, by refusing to pay vendors for products sold in their stores, and by taking advantage of the OLCC’s unmetered issuance of licenses.”
The letter is an industry repudiation of one its most visible and powerful dispensary chains.
La Mota’s owners, Aaron Mitchell and Rosa Cazares, put themselves on the map over the past three years with donations to top Democrats totaling more than $200,000. Cazares joined the board of Emerge Oregon, a training academy for woman who plan to run for office, and spoke of someday running for governor.
The pair’s influence extended to Fagan, who has called them personal friends (they also contributed $45,000 to her campaign) and, records show, allowed Cazares significant input into shaping an audit of the Oregon Liquor and Cannabis Commission, which regulates the cannabis industry. WW first reported April 28 that Fagan worked as a handsomely paid private consultant for the couple since February.
After initially defending her decision to contract with the couple, Fagan resigned on Tuesday.
Who did not sign Thursday’s industry letter is notable—and betrays a significant rift caused by La Mota.
The other other prominent cannabis trade group in the state is the Oregon Cannabis Association. The executive director of that group is Amy Margolis. On March 3, Margolis sent a letter to WW on behalf of her clients, La Mota, Cazares and Mitchell, warning of legal action if WW published certain information about her clients that she wrote “poses a real and actual physical danger to my clients.” Margolis also represents the couple and their companies in pending litigation.
The OCA did not sign the Thursday letter to lawmakers.
La Mota is a member of the OCA; it is not a member of the guild that sent the letter.
Update, Sunday 9:30 am: Over the weekend, OCA’s board sent a letter to legislators. It contained only one line about La Mota: “We want to make it unequivocally clear that we do not condone this behavior. The board has voted to remove La Mota as a member of the OCA.” Margolis has stepped back as the executive director of the guild, and board president Hunter Neubauer says he will take the helm in Margolis’ absence.
In that letter, the industry group also asked lawmakers to amend a cannabis-related bill that’s currently sitting in the House Committee on Rules so that it includes provisions that would prevent La Mota from continuing its expansion.
House Bill 2515 should include “language that restricts the OLCC from renewing or issuing licenses to businesses that refuse to remain in reasonable good faith with the Oregon Department of Revenue” and language to “ensure vendors are paid for cannabis sold at retail stores,” the guild wrote.
In recent years Cazares, Mitchell and the companies they control have been sued by various cannabis companies that allege La Mota failed to pay them for more than $1.5 million in cannabis products sold in La Mota’s more than 30 stores across the state.
“It’s imperative, as integral as this industry is to our state, that Oregon cannabis businesses pay their taxes, meet their obligations to vendors,” the letter says, “and never again attempt to use ill-gotten funds to push personal political agendas.”
Margolis directed inquires to a La Mota email account. WW has reached out to La Mota for comment.