AFTER A LENGTHY discussion, marijuana regulators on Thursday declined to approve a license for a marijuana company that the new chair of the Cannabis Control Commission, Shannon O’Brien, was previously an owner of. Instead, citing confusion about whether the change of ownership was properly done, the commission returned the application to staff for further investigation.
“It’s very unclear, there are a lot of unanswered questions,” said Commissioner Nurys Camargo.
O’Brien, who took office as commission chair on September 1, is a former state treasurer and unsuccessful Democratic gubernatorial candidate. She was appointed to the job by Treasurer Deb Goldberg, who O’Brien got to know through her work chairing the treasurer’s task force on baby bonds.
Immediately after her swearing-in as chair, O’Brien disclosed to CommonWealth that she had consulted for two cannabis cultivation companies that sought licenses from the commission, one of which she had an ownership stake in. One venture, Charlemont Farmworks, has a provisional license and the other, Greenfield Greenery, was on the commission’s agenda for a final license on Thursday.
Although O’Brien says she severed her ties with Greenfield Greenery in December 2021, the paperwork in which the company applied for a change of ownership to remove O’Brien is still being investigated by Cannabis Control Commission staff – which generated concern and confusion among the commissioners.
O’Brien recused herself from Thursday’s discussion of Greenfield Greenery.
The core of the issue is whether paperwork was properly filed and the transaction properly completed to remove O’Brien from company ownership.
O’Brien was a partner in Greenfield Greenery, listed on its initial license application as a manager, with an equal financial interest as Leyden farmer Randy Facey. When Greenfield Greenery was approved for a provisional license in February 2021, O’Brien was one of three people listed on the application as having ownership or control of the company.
When the license was renewed in February 2022, O’Brien was no longer listed on the application. Nor was she on the application that was up for a final license on Thursday.
O’Brien has said she signed an attestation giving up equity in the business in December 2021. She told CommonWealth in September, “I thought it was done.”
But cannabis regulations say there is a “change of ownership” application companies must submit when they change a company’s owners in certain circumstances – for example, when an owner being added would have a certain amount of equity or control. Although O’Brien was taken off the application, the commission never voted on a change of ownership application. The commission’s enforcement counsel Rebecca Lopez said the determination about whether a change of ownership application is required is made on “a fact dependent basis,” and she would not comment on whether one was needed in this case.
Commission licensing director Kyle Potvin said a change of ownership application was received from Greenfield Greenery on May 22, 2022, and commission staff are carrying out their “due diligence” to process that application.
Potvin and commission attorneys stressed that there are two separate reviews done independently – the licensure process and the change of ownership process. Potvin said Greenfield Greenery’s license application met all the requirements to obtain a final license. But several commissioners questioned how they could vote on a final license while the change of ownership application was pending. There is a potential legal issue since state law prohibits a commissioner from having a stake in a marijuana company.
“How do we determine Shannon O’Brien doesn’t have ownership in this license if we ourselves haven’t seen a change of ownership?” Camargo asked.
Because the change of ownership investigation is confidential while it is ongoing, Lopez could not provide any additional information that might help commissioners understand if a change of ownership form was needed and whether the change was done properly.
The point was driven home when Commissioner Ava Callender Concepcion questioned Potvin whether he could “state for the record that our current chair, Shannon O’Brien, is not an owner and does not have a financial interest in this entity.” Potvin said because the change of ownership is still in the fact gathering review stage, “I’m not in a position to answer that question.”
Potvin also said he could not provide a time frame for when the change of ownership investigation would be completed “because that process has to play out in neutral and objective way.”
Asked after the meeting how O’Brien’s name could have been removed from ownership in the state’s licensing system without a formal application and vote, Commissioner Bruce Stebbins, who led the portion of the meeting dealing with Greenfield Greenery, said part of the due diligence that commission staff are doing is “looking at the change of ownership, where it came in, how it might have been effectuated.”
O’Brien, asked about the issue by reporters after the meeting, said she was limited in what she could say because she recused herself and the investigation is ongoing. “I will say I left the company as of December last year,” O’Brien said. O’Brien said it is up to commission staff to determine if she and the company followed proper procedures with regard to her leaving.
Ultimately, the four voting commissioners voted unanimously to return the application to the commission’s investigations and enforcement staff with the instruction that it come back to the commission once the investigation into the change of ownership is completed.
The debate comes amid growing discontent among some progressive activists about O’Brien’s selection as chair, because of her political connections and her ties to the cannabis industry.
The Boston Herald picked up the story about O’Brien’s industry ties weeks after CommonWealth reported it, and ran a front page banner that said, “What are they smoking? Pot boss O’Brien has licenses before board.”
Cannabis activist Grant Smith Ellis and others calling themselves grassroots cannabis activists held a protest at the State House Wednesday calling on O’Brien to resign, citing a lack of transparency and conflicts of interest related to her work with Grassroots Greenery.
A group of cannabis activists and farmers then gathered outside Goldberg’s office Thursday demanding meetings to discuss O’Brien. “We’re asking for an immediate investigation into the process of picking her. The criteria, the process, the timeline,” said Ominique Garner.
Garner said extending the application timeline for commission chair to attract candidates of color and then appointing O’Brien, who is white and politically connected, smacks of “nepotism.” She said the group wants to stop the “revolving door” in which people who work in the industry can quickly move on to regulate it, particularly in an era when the commission is focused on increasing racial equity in the industry.
Asked about that critique, O’Brien said she has spent much of her professional career doing outreach in urban communities and helping underserved populations, particularly through her work as CEO of the Girl Scouts of Greater Boston. “Many people who may be criticizing me don’t know me or my record,” O’Brien said.