A pair of cannabis retailers, Uma Flowers and NortheastCann, have filed appeals of the denials of their special permit applications by the Saugus Board of Selectmen, seeking reversals of the decisions from judges in Massachusetts Land Court and Essex Superior Court, respectively.
Uma and NortheastCann were among the seven companies that applied for an S-2 permit from the selectmen to operate a recreational cannabis dispensary in Saugus. But, before they could make their case to the selectmen directly, companies were required to complete a request for information issued by Town Manager Scott Crabtree’s office, the responses to which were later evaluated by a committee including Crabtree and other town department heads. Those evaluations comprised the Marijuana Establishment Review Committee, or MERC, report issued by Crabtree’s office in July that served as much of the basis for the decisions ultimately made by selectmen.
The two companies are asking the courts for relief on the basis of two very different arguments. Uma, the top-rated company by the MERC and the unanimous recommendation of that committee for a special permit, alleged that a conflict of interest on the part of Selectman Anthony Cogliano, who chaired the board when the hearings were opened, was the reason for its rejection. NortheastCann, on the other hand, argued that the MERC process was flawed from the start and should not have been the basis for any decision by the board because Saugus’ zoning bylaws do not explicitly spell out the role of such a committee in the decision-making process.
At the start of the hearings, Cogliano disclosed a personal relationship with Bostica CEO Ray Falite, who he said had done work for him and his family. Bostica also sought an S-2 permit from the board, with a proposed location directly adjacent to Uma. Saugus’ zoning bylaws prohibited two recreational dispensaries in such close proximity. Uma alleged that Cogliano’s relationship with Falite should have prevented him from taking part in the hearings in the first place.
“There are obvious bias concerns raised by Mr. Cogliano’s glowing review of his admittedly inexperienced friend Raymond Falite, as well as his equally glowing and admittedly inexperienced review of Mr. Falite’s grow facility,” a copy of the complaint reads, referencing Bostica’s facility on the Lynnway. “Mr. Cogliano issued his negative vote to Uma for reasons not related to the purposes of the Zoning Act, and for alleged shortcomings in the application that did not exist and were fabricated by Mr. Cogliano, a clear indication of his failure to consider Uma’s proposal on its merits.”
For his part, Cogliano insisted that his personal relationships would not sway his decisions, and said he believed companies he disclosed relationships with were “jilted” in the report because of their connections to him.
Cogliano was the lone member of the board to vote against issuing Uma a special permit, a vote he took even after Bostica was denied a special permit. Because the board’s vice chair, Jeff Cicolini, recused himself from the hearings due to a conflict of interest resulting from the fact that the accounting firm he works for does business with one of the applicants, companies had to acquire the votes of all four board members.
The appeal contests “the denial was inconsistent with the evidence before the board” and “the denial was inconsistent with the by-laws,” and alleges that Cogliano’s negative vote was a result of simply preferring one applicant over another, a standard the Supreme Judicial Court deemed “legally untenable.”
Uma is seeking an order from the Land Court to remand the matter back to the board with instructions to approve the special permit, or an order to remand the matter back to the board with instructions disqualifying Cogliano from participating in the hearing or voting on the application. Without Cogliano’s vote though, and with Cicolini having recused himself, Uma could not possibly reach the four-vote supermajority threshold Saugus requires for the issuance of an S-2 permit.
An attorney representing the company, Gordon Glass, declined to comment on the appeal.
NortheastCann’s complaint, on the other hand, primarily faults Crabtree and the MERC for the denial of its permit application.
The company, which also names Sanctuary Medicinals, the only applicant to receive an S-2 permit, as a defendant, claims the selectmen (referred to as “the Selectboard” in the complaint”) and Crabtree were incorrect in their interpretation that Saugus had a restriction on the number of cannabis retailers they could issue permits to.
It was a widely held belief throughout the process that Saugus could issue up to three permits, given the number of liquor licenses in town and the fact that Massachusetts General Law allows municipalities to limit the number of retailers to 20% or more of the number of liquor licenses. But, no such regulation exists in the zoning bylaw.
And, the company claims that the process undertaken by the MERC is not “directly contained” within the Saugus bylaw relative to issuing a special permit for a marijuana retailer. But, as noted in the complaint, the bylaws do call for a “pre-application meeting” to be held with “the Town Manager, Department of Planning and Economic Development and relevant departments/boards.” Director of Planning and Economic Development Chris Reilly was not a member of the MERC.
NortheastCann contests that “the pre-application meeting was utilized by the town manager as unfair leverage to narrow the selection of applicants to only those that he wanted approved” and to “degrade the projects he did not want approved.”
“The town manager usurped the role of the Selectmen by the use of the MERC in this manner,” the appeal reads.
Saugus’ zoning bylaws do state the selectmen have the opportunity to “confer with the appropriate committee for review and comment” before making a decision, a chance not granted to board members. Crabtree said allowing selectmen to speak to the MERC would be illegal due to the regulations surrounding the RFI process.
The bylaw also dictates that applicants are to work with Crabtree on the required Host Community Agreement prior to filing for a special permit. In reality, the process worked in the inverse manner, with the special permit serving essentially as a permit to begin negotiations on an HCA.
The company also contests that the MERC held improper sway over board members. For their part, selectmen who supported the report’s conclusions, primarily Chair Debra Panetta and Selectman Michael Serino, said the report served the purpose of the recommendations board members get from town departments on any S-2 permit applications.
“The Selectboard’s decision making lacked a substantial factual basis,” the appeal reads. “The Town of Saugus was best served in having Plaintiff’s project approved.”
The company also alleges that Sanctuary’s project contains “numerous adverse criteria that prohibit it from being a marijuana establishment.” But, the appeal does not detail those criteria and an attorney representing NortheastCann, Nicholas Gomes, declined to comment.
The appeal seeks an annulment of the decision to deny NortheastCann’s permit and the decision to issue a permit to Sanctuary.
All five selectmen, who are named in both complaints, did not return a request for comment. Attorneys for Arrowood LLP, which is representing the town in the proceedings, also could not be reached.