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The state agency that regulates cannabis announced today it will implement rules that require proof of tax compliance from dispensaries when they seek annual renewal of licenses.
The policy change, announced on Tuesday in a statement from from Gov. Tina Kotek’s office, comes after WW’s reporting on La Mota, the second-largest dispensary chain in the state. The chain’s founders, Rosa Cazares and Aaron Mitchell, and entities they control have been issued millions in state and federal tax liens in recent years for unpaid marijuana, employment and personal income taxes.
“This will help ensure that all businesses are operating under the same rules and not getting any competitive advantage if they haven’t paid their taxes,” Kotek said in a statement.
The OLCC already has statutory authority to penalize a licensee if it fails to pay marijuana taxes. But the agency says it only does so when the Department of Revenue provides it with a list of licensees that are delinquent and not on an approved payment plan with the state. The DOR provides such a list four times a year. Because taxpayer information is protected, however, the OLCC and DOR have repeatedly declined to answer specific questions about those reports’ contents and what the OLCC has done with the information.
Cazares and Mitchell, and the many companies they control, have been issued over $1.8 million in tax liens in recent years by the state. (They’ve been issued over $5 million in federal tax liens, too.) Most of the liens issued to the couple and the companies they control are outstanding, meaning they haven’t been paid in full. Records show a handful of the smaller state liens issued to the couple and LLCs they control were paid off near the end of April. Meanwhile, one of La Mota’s biggest competitors, Nectar, was issued a $2 million tax lien by the DOR in January.
Mitchell and Cazares were prominent campaign donors to Gov. Kotek, former Secretary of State Shemia Fagan, Senate President Rob Wagner and other top Democrats. They and a political action committee controlled by Cazares contributed more than $200,000 in recent years to top elected officials, mostly in stacks of cash, as they accrued tax liens.
Since WW broke the news April 27 that Fagan was working as a private consultant for the couple, Kotek has attempted to downplay her relationship with the couple and distance herself from Fagan’s scandal. But Kotek’s efforts to do so are diluted by a number of factors.
Yesterday, The Oregonian reported that Kotek knew about Fagan’s pot contract a week before it became public. Kotek led reporters to believe otherwise in a press conference she held the weekend after the news broke, where she said she was “dismayed about what’s been going on with the secretary of state and her relationship with her outside work.” When asked if she knew any more details about the contract, Kotek said: “I know the same thing that has been reported.” Kotek did not at any point say she was aware of the contract before WW broke the story on April 27.
Moreover, in mid-March WW presented La Mota’s troubles to Kotek and asked if she’d return their political contributions made to her campaign and whether she’d accept further donations. Kotek answered neither question. It was not until Fagan’s scandal that Kotek said she’d give $75,000 to the Oregon Food Bank—a slightly larger sum than the couple gave to her campaign.
The couple hosted at least three fundraising events for Kotek within the past year. The first was a cocktail party last spring at a Northwest mansion the couple lived in. The second was a pickleball tournament, where Mitchell and Kotek were a team and could be found laughing in pictures from the event. And the third was a black-tie gala held at Hotel deLuxe downtown on the brink of Kotek’s gubernatorial victory.