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Mystic Holdings restructuring approved after board presses company over roughly $500,000 in unpaid taxes
Summary
The Cannabis Compliance Board approved Mystic Holdings’ plan to move licenses out of Qualcan into new subsidiaries but conditioned the approval on monitoring and referred outstanding Department of Taxation liabilities for further review by the attorney general after board members pressed the company for a concrete repayment plan.
The Cannabis Compliance Board on March 20 approved Mystic Holdings’ internal restructuring to move licenses from Qualcan into separate, subsidiary LLCs but recorded concerns about the company’s outstanding tax liabilities and referred the issue to the attorney general.
Company counsel Michael Cristalio, speaking for Mystic Holdings, summarized the transaction as an internal reorganization intended to place three licenses — a Carson dispensary (SkyPoint), a production/cultivation entity (Univision), and other retail operations — in separate LLCs to simplify accounting and operations. He told the board the company had “paid an additional $713,345.22 since December 2024,” describing that as part of an ongoing reconciliation with the Department of Taxation.
Board members pressed Mystic’s leadership for specifics. Member Drett said he wanted “a very specific plan that is set in stone” for paying past‑due taxes and suggested follow‑up reporting. Several board members recounted prior enforcement steps taken with other licensees and said fairness required consistent treatment across the industry.
Mystic’s chairman and CEO, Lorenzo Baraco, and company representatives described operational cash‑flow pressures tied to receivables and to costs tied to acquiring operations out of receivership. Baraco said the company has prioritized paying taxes and expects the outstanding balance to decline over about 90 days at the current rate of payments; he also said the reorganized LLC structure will make autopay setups and tax remittances easier going forward.
Staff noted a Department of Taxation figure of approximately $931,000 in liabilities for Mystic’s subsidiaries as of March 7 and characterized that as an increase of roughly $346,000 since the company’s prior appearance. Mystic disputed the exact instantaneous balance but acknowledged a substantial liability and described ongoing payments and reconciliations with Taxation.
The board approved the internal transfers, granted a limited waiver of NCCR 5.112 that will expire at Mystic’s next appearance, and approved a motion to refer the outstanding tax‑liability questions to the attorney general’s office for further assessment and reporting back to the CCB. The motion passed by voice vote.
The board’s action allows Mystic to proceed with the corporate restructuring, but members directed staff to continue monitoring payments and to expect a follow‑up with a specific repayment plan and reconciliation documentation as the AG and CCB coordinate next steps.
