ICYMI (April 16 – May 8, 2023)

Deep Dive of the Week

TL;DR: Oregon Secretary of State quits amidst reporting of her ties with LaMota, a cannabis chain that is under fire for violations

What Happened:
Investigative reporting by Sophie Peel at Willamette Week unraveled one of Oregon’s largest dispensary chains – and the Oregon Secretary of State.

Where We Are:
Shemia Fagan, Oregon’s Secretary of State, resigned following the revelation that she had taken a $10,000 a month job with La Mota, a cannabis business embroiled in scandals involving unpaid taxes and political shenanigans.

Implications:
The Portland Mercury called Oregon’s cannabis industry “confusing, messy, underfunded and poorly regulated.” in 2019, and that has certainly been supported by the events of the last few weeks. I have long wondered why the Secretary of State never appropriately followed up on the 2019 audit. As Shemia Fagan worked toward another audit – it was recently revealed that LaMota architected the audit’s scope, subject, and even its name. The Secretary of State has resigned weeks before an election. The OLCC has also experienced a change of leadership with the resignation of Steve Marks following a scandal involving abuse of his access to rare liquor, among other issues.

Deep Dive:
Rumblings started about cannabis giant LaMota, a vertically-integrated cannabis business, at the beginning of the year. It started with the filing of a lawsuit by one of LaMota’s vendors, Green Treats LLC, for failure to pay for over $300,000 in product.

A couple of weeks ago, Willamette Week reporter Sophie Peel pulled back the layers of intrigue around cannabis business La Mota. An article published on March 29th detailed how LaMota had thrown lavish parties in support of gubernatorial candidate (now governor) Tina Kotek in addition to Secretary of State Shemia Fagan. The owners of La Mota, Rosa Cazares and Aaron Mitchell, are listed on 72 business filings. The article demonstrated that the owners of LaMota were entrenched in the Democratic Party in Oregon.

All was not well. The house where the party had taken place was rented, and the owner claimed that the rent went unpaid for seven months, and the house was damaged. The Oregon Department of Revenue has placed liens on Cazares, Mitchell, and LaMota totalling $1.6 million- $621,000 of it in cannabis taxes. The Oregon Department of Revenue isn’t alone – the IRS has also placed a lien on Cazares and Mitchell for $1.6 million.

During the reporting of the story, Amy Margolis, LaMota’s attorney, contacted Willamette Week, claiming the reporting was hurting her client. Amy Margolis is also the head of the Oregon Cannabis Association.

In light of the news, several political candidates who received funds from La Mota or its founders for their successful campaigns have pledged the money to charity rather than continue to be tied with the beleaguered cannabis organization. That’s not all LaMota had done for the Democratic machine in Oregon. Rosa Cazares was eventually ousted from the board of Emerge. Emerge is an organization that is dedicated to supporting Democratic women in their bid for office.

The list of campaigns that LaMota supported is staggering. And the one name that kept cropping up was “Shemia Fagan,” the Secretary of State.

It didn’t take long for the overly-cozy relationship between Shemia Fagan and LaMota to be revealed. It was revealed that Fagan had overseen a vast amount of the recent audit before recusing herself due to her conflict of interest. A timeline of her interaction with LaMota is here. It was mere days after the revelation of her $10,000 a month consulting job before she offered her resignation.

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