HALLOWELL — The Cannabis Healing Center will likely remain closed following a tense Monday public hearing, which prompted no council action to reverse last week’s vote to deny the business’s owner a license to sell marijuana in the city.

Councilors were not moved to reconsider even though owner Derek Wilson, his attorney Ed Bearor and members of the public spoke in support of the business. The downtown medical marijuana retail store licenses, limited to two, will remain with Allison Michaud, who will operate The Frost Factory at 144 Water St., and Catherine Lewis, who operates Homegrown the Offering at 109 Water St.

Lewis received the license intended for Wilson minutes after he was denied it. Her background check revealed no charges.

Wilson and Lewis were invited to Monday’s public hearing after an hourlong executive session with legal counsel by the City Council on Friday. Michaud also attended the meeting along with about 30 members of the public.

The meeting revealed some confusion with Wilson’s application. Councilors thought some portions of his application were incomplete and, because Wilson did not attend the Jan. 7 meeting, they could not make an accurate judgment as to why it was incomplete.

On Jan. 7, councilors denied a license to sell marijuana downtown to Wilson, the operator of the Cannabis Healing Center at 184 Water St. The decision left Wilson unable to sell any marijuana — medical or adult-use — from the store, which has been closed since Jan. 8.

Wilson was one of two downtown retail store applicants who won first preference for a license after a December 2018 lottery. After the lottery, a background check done on all applicants for marijuana retail stores, revealed one Class E misdemeanor disorderly conduct conviction from 25 years ago on Wilson’s record.

The conviction was not disclosed on his application, even though Wilson was prompted to do so. At the Monday hearing, Wilson explained that he did not have any memory of the incident, but he was 20 years old at the time and living in a house in Hallowell with a group of men who regularly threw parties.

He said the charge warranted a $125 fine and a $10 victim fee. He previously told the Kennebec Journal it was a $100 fine.

“It seems like I may have told someone off,” he said. “I don’t remember going to court.”

Councilor Kate Dufour, who voted to deny Wilson’s application initially, said the incomplete application prevented her from approving Wilson’s application.

“My concern is that the applicant did not disclose the violation,” Dufour said during the meeting. “It creates a friction of my understanding of his application and my understand of what is going on.”

Wilson did not attend last week’s meeting because he had appointments in Freeport and Portland. Councilor Patrick Wynne said last week they were not able to judge his “moral character” — because of his absence — in accordance with the licensing procedure. The council ultimately decided unanimously to deny the license.

Wilson doubled down on claims that he was told the Jan. 7 meeting was not essential to his business remaining open. He contends that he was told by City Manager Nate Rudy that it was non-essential. Rudy told the Kennebec Journal last week that he told Wilson he would relay his messages to the council when they were discussing approving or denying licenses.

Three residents spoke to Wilson’s good moral character. Rick Morrow said Wilson made “generous donations” to the Hallowell Food Bank, and he believed that was a good measuring stick for his moral character.

Wilson said in an interview that he is barely scraping by after his sales have been gutted by the action. He added that there has been an outpouring of support from Hallowell residents and business owners since he has closed.

“It’s been horrible; it’s putting me through hell,” Wilson said Monday before the latest meeting. “I was able to deliver to a few people and make a couple hundred bucks.”

Bearor also took aim at Wilson’s business, which has been operating legally since Jan. 2017, not being grandfathered and immunized from the lottery.

City Solicitor Amy Tchao said last week that Wilson’s store was not grandfathered from the licensing procedure because it did not receive municipal approval before opening. When the state medical marijuana law changed on Dec. 13, businesses with municipal approval prior to that date were not subject to local rule changes, according to Tchao.

Wilson said he went to City Hall and got all approvals necessary to open his store. He said someone in the City Clerk’s office took a photo copy of his state business license and said all he needed was to move into a retail store. Planning Board officials told the Kennebec Journal Wilson did not need Planning Board approval because no change of use was needed on his building.

The only written permission Wilson has from the City is for a sign, but City Solicitor Amy Tchao said that may not constitute municipal approval to run a medical marijuana storefront. An example of municipal approval may come in the form of a local business license.

Lewis, who is the president of the Medical Marijuana Caregivers of Maine Trade Association board of directors, spoke in support of Wilson at the meeting. She said he should have been grandfathered and excluded from the lottery.

“In defense of Mr. Wilson, getting his sign permit and operating through the (city) was all he was aware to do, and he was operating within the medical marijuana program guidelines,” she said.

Bearor said he was disappointed with the outcome of the council meeting.

“We were confounded by the discussion regarding a lack of existing license held by Mr. Wilson,” Bearor said. “We’ll probably, at least, investigate who has licenses and who doesn’t because that seemed to be a puzzle.

“When someone operates a business after coming to City Hall and asking what they need for licenses and leaving with the assurance that they have all they need and operate within the view of City Hall for two years, that somehow due process is violated when they are told you are no longer in business and no longer lawful, I think the city needs to assess its policies and practices in that regard.”

Former Councilor and owner of Whipper Snappers Quilt Studio Lynn Irish said during the hearing that her downtown business did not have a municipal business license.

“He was operating legally during that time until we started drafting our ordinance,” she said. “There’s this discussion of needing a city license, and there was no license when he opened.”

BUILDING OWNERSHIP

Michaud’s business is currently being set up in a building owned by Walker Investments LLC, a corporation run by Mayor Mark Walker’s four adult children.

Walker disclosed that conflict-of-interest to councilors at the Jan. 7 meeting and offered to recuse himself from the public hearing, but councilors did not object to his participation.

“I have no income interest from it,” he said. “The leasing arrangement was done at a total arm’s length. I didn’t know who they were showing it to, nor did I know what business they were going to do. I was as in the dark as anybody.”

Walker is listed as the registered agent of the corporation, according to the Secretary of State’s database. Secretary of State spokesperson Kristen Muszynski said the registered agent is the first contact for a corporation in case the state has to reach it. She said a registered agent does not have to have an income interest in the corporation they serve, though in most cases they do.

Walker said Monday that he acts as the registered agent as a favor to his children and because he is on location at the building if anything needs to be addressed quickly. He said he files the annual reports for the corporation and pays rent for his second-floor law office.

“I’m lucky to reimbursed for the filing fee,” Walker said.

Walker said he learned of Michaud’s business planning to open in the building when he saw license applications ahead of the Dec. 10 lottery. He said he did not disclose his children’s ownership of the building at that point because he had not spoken with his children about potential renters for the space, which used to be a pizzeria.

When asked about any potential connections they may have to the marijuana industry, Councilors George Lapointe, Michael Frett, Patrick Wynne, Dufour and Kara Walker said they did not have any connections they were aware of.

Councilors Maureen Aucoin and Diano Circo did not comment on any connections by press time.

TAX MONEY

It is not clear if medical marijuana stores have brought in tax money for Hallowell.

City Treasure Dawna Myrick said the Cannabis Healing Center and Cold Brook Cannabis, which has not been assessed because it was opened after the assessor’s deadline in 2018, have not paid personal property tax to the town. Both businesses rent spaces in buildings, so property tax does not come from their businesses.

Myrick was not aware of any other taxes Hallowell may collect from medical marijuana businesses.

After the meeting, Rudy said the city is hopeful that laws will change to allow revenue sharing from the marijuana industry for municipalities that opted into allowing establishments.

Licenses still need to be drafted by city staff. When Lewis asked when she would receive her license after the hearing, Rudy told Lewis that she will receive a license after they have been drafted. Licenses have not been given to marijuana businesses in Hallowell yet, despite motions passing to “issue” the licenses on Jan. 7.

Sam Shepherd — 621-5666

[email protected]

Twitter: @SamShepME


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