In a case challenging the fundamental fairness and government transparency of the process established by the City of Santa Ana for cannabis dispensaries. Matt Wagner is certainly dealing with a David v. Goliath story. In January of 2015 Matt, along with hundreds of other eager entrepreneurs, participated in the Measure BB Lottery at 2904 Oak Street, located in Santa Ana. After an unsuccessful bid for a medical license for his dispensary Mr. Wagner was placed on a waitlist. The list is updated annually and Mr. Wagner had exercised his right to remain on the wait list at the same address via written request every year.
In July 2017, the city of Santa Ana permitted another applicant from the Waitlist doing business under the name of, “Purple Holistic” to operate at the address Mr. Wagner had been waiting on for several years. Purple Holistic had previously qualified to apply for a medical cannabis dispensary Regulatory Safety Permit. This is where things begin to get interesting because this is completely contrary to the Municipal Code of Santa Ana. Under the Santa Ana Municipal Code, if Purple Holistic did not submit a completed application by August 4, 2017, they would have been disqualified and removed from the Waitlist, thereby also disqualified for an adult use permit in November 2017.
In November of 2017, the city of Santa Ana modified its ordinance to allow permitted medical marijuana dispensaries, and those eligible to be a medical marijuana dispensary, to apply to also become an adult use dispensary without any merit-based criteria. As an applicant on the waitlist Mr. Wagner applied for an adult-use permit and paid all requisite fees for an adult-use (commercial cannabis) business at the 2904 Oak Street address. His Phase 1 application was processed, and he was invited to submit a Phase 2 application. However, he was subsequently refused an appointment to submit his Phase 2 application based on a Settlement Agreement executed between the city of Santa Ana and Purple Hollistic.
PotPlus reached out to Mr. Wagner about his contact with Aaron Hertzberg and Chris Francy, the two men doing business as Purple Holistic. “Mr. Francy and Mr. Hertzberg first made contact with me I believe in January 2018. They called me together and attempted to purchase my waitlist spot for $50k, it went up to $70k and then $90k. These were all verbal offers made over the phone. After I declined all of them I did say that for 20% of the business, I would entertain the idea of being partners with them. They had their attorney, one of the many, draft up a written offer and it was emailed to me. I have it. I continued to decline a partnership with Mr. Francy and Mr. Hertzberg. Shortly after this happening, the City granted Mr. Francy and Mr. Hertzberg (DBA Purple Holistic) my address and told me that they were no longer accepting applications on the Oak St address because of a settlement agreement that was made between the city of Santa Ana and Purple Hollistic. Right after this is when my lawsuit started against the city of Santa Ana.”
On October 25, 2018, the city of Santa Ana produced their “Person Most Knowledgeable” for deposition. PotPlus has been told that the person produced no documents and upon the conclusion of the deposition, Mr. Wagner’s attorney exercised the plaintiff’s right for additional time to depose the witness. The city of Santa Ana would only agree to continue the deposition on November 7, 2018. The trial date is still currently set for November 20, 2018.
What does this mean for Mr. Wagner and for anyone else trying to operate within the limits of the local Municipal codes? Well, in short it means that the city of Santa Ana is showing its ability to change the rules for whoever they want, without public process. Why does Mr. Wagner, who followed the city’s rules, not get to compete under the ordinances adopted by the city of Santa Ana? To answer these questions we would also have to find out why Santa Ana is picking and choosing who receives fair treatment and who gets waivers, settlement agreements, and back alley deals promising an unfair advantage. PotPlus will continue to follow this story as it continues to unfold.