Hallowell council action closes pot shop; owner fires back
HALLOWELL — The city's longest-running medical marijuana store closed Tuesday after councilors denied its owner a local license to sell any type of marijuana because he had not disclosed a decades-old misdemeanor conviction.
Citing new city rules that include “good moral character,” the Hallowell City Council voted unanimously to deny Derek Wilson, owner of the Cannabis Healing Center, a marijuana-selling license after a background check revealed a 25-year-old disorderly conduct charge that had not been divulged on his business's application.
Late Thursday afternoon, however, the city set a special meeting of the council at 4:30 p.m. Friday. Councilors will meet in executive session to discuss the licensing process with legal counsel.
Wilson was not at Monday night's council meeting to explain the charge, although in an interview this week he said he found out about the meeting at the last minute, had prior engagements to attend and was told by the city manager that he didn't need to be there.
Councilors did award a license to a woman who has multiple criminal convictions, including one involving drugs, but who explained them in person to councilors.
Wilson, a state-licensed caregiver, has operated The Cannabis Healing Center at 184 Water St. since January 2017. In an interview, he said he was “utterly disgusted” by Monday's proceedings and he was told by City Manager Nate Rudy on Tuesday that he must close down his store.
“He said if I sold marijuana at my store, I would be arrested,” Wilson said.
At Monday's meeting, Rudy said enforcement action was imminent to make sure Wilson did not sell marijuana at his business.
Meanwhile, a Portland attorney not involved the matter said Wilson could have a shot to have the decision reversed by the courts and he also doesn't see any reason why the city hasn't yet issued a license this week following the council's action.
In an interview Tuesday, Rudy said the city was evaluating next steps.
Wilson said the charge in question was a class E misdemeanor of disorderly conduct, which resulted in a ticket, or a summons, and a $100 fine. He also said he cannot remember the circumstances that led to the charge.
Meanwhile, Wilson also fired back comments from Councilors Michael Frett and George Lapointe, who said they remembered each detail of their arrest at age 16 and every time they were given a traffic ticket, respectively.
“It's not like I'm trying hide a … class E … misdemeanor,” he said. “People can say they remember lots of things from when they were a kid; people are different.”
Wilson said he didn't attend the meeting because he had an appointment in Freeport and errands in Portland already scheduled for Monday that conflicted with the meeting. He said Rudy told him in a Sunday phone call that it would not be necessary for him to attend the council meeting — an assertion that Rudy disputes, saying he offered only to relay a message to the council.
During Monday's meeting, Mayor Mark Walker and Rudy said they expected Wilson to be at the meeting and explained that he told them that he had forgotten about the disorderly conduct charge.
“I did invite him,” Rudy said, and “specifically let him know that he would have an opportunity to address the council with an explanation of what we found.”
“I also think he believes since he had been approved by the state, that 25 years was too long,” Walker added. “I didn't encourage that thought.”
Wilson said that he told Walker that he had no recollection of the incident, not that he had forgotten about it, and that he remembered when he was reminded.
Councilors voted to issue a license, pending code enforcement checks, to Allison Michaud, who will operate the Frost Factory at 144 Water St., despite background checks returning six convictions — in the period from 1997 to 2005 — for theft, unlawful trafficking in scheduled drugs, and hindering apprehension. Councilors voted 6-1 in favor of issuing Michaud's license.
Councilor Patrick Wynne said he voted for Michaud's application and to deny Wilson's because Michaud was present at the meeting and Wilson was not.
“She was present and was able to explain her charges,” Wynne said in an interview. “I felt like I was able to judge her moral character, and I couldn't make a judgment on his.”
During the meeting, Michaud said the theft charges were shoplifting when she was struggling as a single mother, the trafficking charge was for cultivating marijuana, and the hindering apprehension charge was for telling police someone drove her car when the person did not. She did not disclose all six charges on her application when prompted, but did disclose some, while Wilson did not disclose his one charge.
Wynne said he was uncomfortable with potentially shutting down the Cannabis Healing Center based on a misdemeanor charge, but voted to deny the license because the city should be “judicious” with how it licenses marijuana establishments.
“I was uncomfortable with that, but at the same time, … it is a business where the community has decided (it should have) additional responsibility,” Wynne said. “Mr. Wilson did not demonstrate … that responsibility.”
Councilor Diano Circo agreed with Wynne and said if Wilson had contacted the council prior to the meeting, the decision could have been changed.
Rudy said the council was not responsible for the burden of proof of good moral character while issuing licenses.
“At the end of the day, the burden of proof is with him,” he said of Wilson.
Rudy said that he spoke with both Michaud and Wilson on Jan. 4 to let them know about Monday's proceedings. When asked about the last Friday's conversation, Wilson said he spoke with Rudy only on Sunday and Tuesday.
Hallowell's marijuana establishment licensing and zoning changed in November 2018. New applications for marijuana establishments do not distinguish between medical and adult-use, leaving state licensing to dictate the type of establishment an applicant would run. The council limited downtown marijuana retail stores — medical caregiver stores or adult-use stores — to two. A lottery took place in December 2018 to award first preference for these new licenses, pending final background and code enforcement checks.
The licensing ordinance was scrutinized by Councilor Kate Dufour in September 2018 for the “good moral character” clause. She asked if there were parameters to apply to the “subjective terms,” but no definitions were added to the ordinance. Rudy said in October 2018 that the term was commonplace in liquor licensing and city legal counsel advised him to keep the clause in the ordinance.
Adult-use establishments could have applied for a license under the new ordinance, but they would have been disqualified from the lottery because there is currently no way for a proprietor to get a state license. Statewide rules still are being written and would need to be approved by the Legislature before going into effect. Those rules probably will be approved at some point during the Legislature's current two-year session.
The winners of the December lottery were Wilson and Michaud. Catherine Lewis, who operates Homegrown the Offering at 109 Water St., was the only applicant not drawn in the lottery. The license destined for Wilson was issued immediately to Lewis on Monday.
“I'm glad we're going to get a license; I am sorry it was at the expense of someone else,” Lewis said Tuesday. “I think, for everyone's sake, it would have been more prudent to do background checks before the lottery, if that was going to be a deciding factor.”
Wilson has the chance to appeal the decision. Per the ordinance, any council action could be appealed in Kennebec County Superior Court.
Portland attorney Tim Zerillo, who is not involved in the Hallowell cases but specializes in criminal defense and marijuana topics, said those types of lawsuits could pose a problem for business owners.
“The law immunizes government officials acting in their capacities,” he said. “Unless you can establish a discriminatory process, it may be a difficult lawsuit.”
When asked if he would appeal, Wilson said he was “speaking with a lawyer.”
Zerillo said if he were representing Wilson, his first concern would be to get his client licensed. He said the first step would be to speak to the Hallowell City Council and ask them to reconsider. The final step would be to appeal in court, using the number of convictions for one proprietor over the other as precedent.
“(Wilson) may have a good-faith argument to get back in front of the town,” he added. “I would think that he would be able to use the other license given as precedent.”
David Boyer, legislative analyst for the Marijuana Policy Project, said his organization did not want to comment on the specifics of Hallowell's licensing procedure.
Rudy said he is discussing with the city's legal counsel how best to proceed with the licensing process. He said he spoke with Lewis on Tuesday afternoon, but did not give her a license, despite a motion to “issue” her a license passing at Monday's meeting. Rudy said Tuesday he did not issue Lewis' license because he was seeking more advice from the city's lawyer about a potential appeal from Wilson.
On Thursday, City Clerk Diane Polky said no licenses have been issued because she would have to create a new type of license. When asked when the new licenses would be ready, Polky said she did not know.
Lewis said she was told to be patient while the city figures out the next move. She said she is not going to sell medical marijuana from her establishment until she obtains the license, but she is ready to start immediately.
But Zerillo, the Portland attorney, said Lewis should be given a license based on the council's motion. City officials said Monday that Lewis passed her background check and code enforcement checks, meeting necessarily criteria to receive a license immediately.
“As long as she did what she was supposed to, I don't think you can then rip it away from her,” he said.
Zerillo said the city could face a predicament if Lewis is given a license and Wilson takes successful action to reverse the council's decision. He said the city should have waited for any appeal from Wilson to reach its conclusion before awarding the second downtown license. If Wilson reversed his license denial in court, all three applicants might have legal rights to two licenses.
“They put themselves between a rock and a hard place here,” he said. “They just assumed that their word would be final; their word is not final.”
City Solicitor Amy Tchao said 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, 2018, businesses with municipal approval prior to that date were not subject to local rule changes, according to Tchao.
According to Planning Board Chairwoman Danielle Obrey, Wilson did not get approval from the Planning Board for his business. In the downtown district, Obrey said, no approval is needed if a business is going into a building that has housed the same use. Because Wilson's retail store was going into a retail space, he did not need Planning Board approval.
Sam Shepherd — 621-5666