Cannabis business applicants question evaluation scores - File appeals with City of South Lake Tahoe

SOUTH LAKE TAHOE, Calif. - Two businesses that were not selected to go further in the process of vying for one of three cannabis retail store licenses have filed appeals with the City of South Lake Tahoe. They are questioning the fairness of the selection process, and one is stating that all three applicants who had the top scores evaluation scores should be disqualified. A third applicant said he is in the process of filing an appeal.

(5:29 p.m. update - The City of SLT received a third appeal, this one from Have a Heart, at 5:09 p.m. Friday, nine minutes after the deadline. City Attorney Heather Stroud and City Clerk Sue Blankenship will make a determination about that appeal on Monday, June 17.)

The first appeal received was from MedMen and their VP of Acquisitions and Licensing Tak Sato.

"The owners of both Embarc Tahoe (Christy Wilson) and Tahoe Green (David Turner) were both members of the South Lake Tahoe City Council Cannabis Sub-Committee which was established on or around September 5, 2017," said Sato in his appeal. "While the Sub-Committee was held out to be advisory in nature, the Sub-Committee in reality possessed decision making authority and established the cannabis program in the City."

Sato stated that both Wilson and Turner had 20 months to work on their applications and not the two months everyone else who applied had due to prior knowledge of the criteria based on their committee participation.

MedMen questions the scoring on applications, as does the other person to file an appeal, Robert Fehskens and Ed Pillsbury of South Tahoe Cannabis.

"Evaluation Committee scores showed a high degree of inconsistency and unjustified differences based on factual information provided in applications," Fehskens said as the reason for his appeal.

Fehskens said in his appeal the judges, who scored blindly and individually, should have met to come up with one score to be more balanced and the ensure each judge understood the criteria.

He questioned the reviewers' number evaluation of the questions on the application. On Section 4 of the application, which outlined the applicant's local connections, South Lake Cannabis received all possible nine points from two reviewers and zero points from the other three. Both Fehskens and Pillsbury live on the South Shore, have children at Bijou Community School and South Tahoe High, and one plays Babe Ruth Baseball. Fehskens says he is a member of Tahoe Douglas Rotary and his wife is on the Tahoe Heritage Foundation Board and Barton Hospital Board.

Local businessman John Runnels said he too filed an appeal but the City says the $363 required fee to appeal was not paid by the 5:00 p.m. deadline. Runnels told South Tahoe Now he has hired former judge Steven Bailey to represent him in fighting the fact he received the lowest number of points from the evaluators out of all the applicants. He said there were errors in the tabulation of points and he shouldn't have to pay the fee since the City still had his $21,000 deposit on file.

Those with the highest scores in the evaluation process:
Embarc Tahoe - Christy Wilson*
Cannablue - Chris Zeigler
Tahoe Green - David Turner*
Redefining Organics - Oliver Starr
Perfect Union - Scott Spears

*Both Christy Wilson and David Turner were members of the Cannabis Subcommittee that developed the City's cannabis program in 2018.

The scores received by all the applicants (and proposed business locations):

Retail
Embarc Tahoe, 4035 Lake Tahoe Blvd, 97.7
Cannablue, 2179 Lake Tahoe Blvd, 91.8
Tahoe Green, 3930 Lake Tahoe Blvd, 90.7
Have A Heart, 989 3rd Street, 87.9
Medman, 2311 Lake Tahoe Blvd, 86.3
Honey Leaf, 3678 Lake Tahoe Blvd, 84.3
Stay Lifted, 941 Emerald Bay Rd, 82.8
Element 7, 2318 Lake Tahoe Blvd, 82.8
The Green Goddess, 2635 Lake Tahoe Blvd, 82.4
Diego Pellicer, 1169 Ski Run Blvd, 78
Canna Nation, 3979 Lake Tahoe Blvd, 75.8
One Plant, 3665 Tamarack, 75.3
Kind Life, 2701 Lake Tahoe Blvd, 74.4
South Tahoe Wellness, 2705 Lake Tahoe Blvd, 74.1
South Tahoe Cannabis, 947 Poplar Street, 73.5
Norcal Cannabis Co., 2701 Lake Tahoe Blvd, 67
TREZ Lake Tahoe, 765 Emerald Bay Rd, 61.3
The New Green Deal, 986 Emerald Bay Rd, 37.9

Micro-business
Redefining Organics, 1090 Industrial Ave, 89.9
Perfect Union, 2227 James Ave, 84.5

Cultivation
Redefining Organics, 1090 Industrial Ave. 87.7

On Friday, June 7, South Tahoe Now submitted a Public Records Act request for information on the cannabis business applications including the names of those involved in the proposed enterprises. We wanted to be able to look at each part of the application and the responding evaluation scores. On Tuesday, June 11, we received a copy of a letter from City Attorney Heather Stroud and the score sheets of each applicant, but not the applications.

Some of the applicants do not want their applications released, stating proprietary and confidential materials, including trade secrets and personal information. In her letter, Stroud said she did not find the bulk of each application to be confidential and are subject to disclosure under the Public Records Act. She said when individuals or businesses voluntarily enter the public sphere their privacy interests are diminished.

"In an attempt to balance the City's duties under the Public Records Act with the privacy concerns of applicants, the City will provide the applicants a period of ten days to file a request for a court order enjoining the City from releasing the application materials," Stroud stated. "If no such request for a court order is filed by June 21, then the City will proceed with releasing the application materials with any appropriate redactions."

The Cannabis sub-committee was made up of Liz Hallen, David Turner, Rosemarie Manning, Julie Wright, Jude Wood, Jane Flavin, Devin Middlebrook, Kevin McHugh, Francisco Rodriguez, Christy Wilson, Peggy Eichhorn, David Orr and Kelsey Magoon.