CCB approves multiple transfers of interest and limits waivers, flags past unapproved transfers

The Cannabis Compliance Board on Feb. 20 approved a slate of transfer-of-interest applications and associated time-limited waivers while directing further review of possible unapproved transfers by some licensees.

Division Chief David Staley summarized investigative reports for multiple applicants, including Zion Gardens LLC, Greenleaf Enterprises and entities emerging from MJ Holdings’ receivership. Staley told the board that staff found documentation and IRS filings suggesting earlier, unapproved ownership changes in the Zion Gardens matter and presented options for board action, including conditional approvals, denial or referral to the attorney general for further review.

A Zion Gardens representative described a handwritten 3% ownership transfer dated around Dec. 14, 2020 and said no funds moved between parties for that transfer; he said later transfers were conditioned on CCB approval and accepted responsibility for delays in filing TOI paperwork. Member Durrett disclosed a relationship with a Zion Gardens representative and abstained from that item to avoid an appearance of impropriety.

The board voted to approve agenda item 4a covering the Zion Gardens requests with a condition that any NCCR 5.112 waiver expire at the next TOI agenda date and to include a recommendation that the attorney general review whether unapproved transfers warrant further action.

The board also approved Greenleaf Enterprises’ testamentary transfers (20% interests split between subtrusts for existing licensees) and accepted staff advice to limit any prospective NCCR 5.112 waiver to the entity’s next TOI agenda date. For the MJ Holdings/GreenLife matter, staff explained the sale of production license P133 was part of a receivership plan to satisfy creditors; that transfer and related internal restructuring were approved subject to the same time-limited waiver condition. Lighthouse Strategies’ transactions (sale of several production/cultivation licenses and a Las Vegas dispensary) and related conditional TOI agreements were also approved.

Board members and staff emphasized that TOI filings must be submitted and vetted in advance, and staff said written investigative summaries and the applicants’ written responses were included in the packet. Several motions were made, seconded and carried during the meeting; where board members recorded recusals, those were noted on the record. The board limited the scope of waivers and left options for future action should investigations indicate disciplinary or legal referrals are warranted.

The board’s approvals are conditional on the standard post-approval requirements and any local or administrative conditions referenced in staff reports; staff will notify the board if further developments require new action.