The Hoboken Cannabis Review Board advised that the city council revoke Harmony dispensary’s local approval due to inaction and legal problems.
First the new Hoboken Cannabis Review Board members Katie Morse, attorney Gary Weinstein, and Robert Davis were sworn in.
Culture Hoboken had previously been denied a hearing due to the imposition of a cap of six cannabis dispensaries in Hoboken. Hoboken Cannabis Board attorney Ron Mondello explained the Council is handling that now.
He explained that Hoboken Zoning Officer Ann Holzman sent a letter in August suspending Harmony dispensary’s local approval due to inactivity.
“What’s been going on with Harmony?” Mondello asked.
Attorney Chirali Patel said their local approval was issued in September 2021. Harmony dispensary made a big show of being close to opening in Jersey City two years ago, too.
Harmony Dispensary’s Shady CEO
But then litigation against Harmony dispensary and its CEO, Shaya Brodchandel, began.
He was formerly President of the NJ Cannabis Trade Association (NJCTA) the trade group of open cannabis corporations in New Jersey
Patel said Brodchandel and Harmony dispensary had shareholder disputes and were accused of embezzlement. Thus, three lawsuits were filed against the company.
“Specifically geared toward the individual I’m going to call the one bad actor, the former CEO,” Patel noted.
She explained that Brodchandel allegedly took $1 million to invest in a foreign company.
“It’s still currently a nonprofit. It never converted to the for-profit status. By court order, Shaya is no longer… part of Harmony,” Patel explained.
She noted the court-appointed custodian retained an investment banker to sell Harmony dispensary to address debt.
MSO Illicit Gardens Taking Over Harmony Dispensary
“There is a bidder. They’re Illicit Gardens, the second largest MSO (Multi-State Operator) in Missouri, vertically integrated,” Patel explained. They have a history of partnering with Social Equity brands. They’re also well capitalized.”
“Harmony has ceased to exist?” Mondello asked.
Patel said they still operate as a medical and adult use dispensary in Secaucus.
“Are we going to see Harmony re-applying, or is it another entity?” Mondello asked.
“The transition will happen depending on how the CRC (NJ Cannabis Regulatory Commission) approves it,” Patel said.
She didn’t know whether its name would be changed like others sold to MSOs.
“The ownership may change. There would have to be a whole new application. You would have to start from scratch,” Mondello said.
Patel noted Harmony dispensary didn’t pay fees for their adult use cultivation and manufacturing licenses, which the CRC revoked. They still grow and manufacture medical cannabis products.
“Should they pay those fees, those will be reinstated. Their class 5 (adult use cannabis dispensary) license is still intact,” she added.
“Harmony was the 1st application approved by the city of Hoboken. That piece of real estate has sat with butcher paper over the windows for three years,” Business Administrator Jason Freeman declared. “I have absolutely no confidence… that Harmony… is going to get this done.”
“No has communicated with this board,” he added. “It’s not only disappointing, it’s beyond the pale.”
MSO Cannabis Dispensary Manuevering
Patel spoke well of the potential buyer, Illicit Gardens.
“They are planning on having operations in New Jersey separately,” Patel said.
She explained the Harmony dispensary auction sale hearing will be in late October. However, the CRC is not meeting in November. So, the sale will likely be approved by the CRC in December. Patel said they could open by next spring.
“Are licenses and approvals even transferable?” Freeman asked.
Patel said under the medical cannabis law, they could, subject to CRC approval.
“When you refer to a new owner Illicit … is that like unlawful?” GW asked.
“They specifically tried to highlight people incarcerated by the War on Drugs,” Patel said.
They’re an example of underground legacy to legal.
“Who is paying you right now? Freeman asked.
Court Appointee Running Harmony Dispensary
“That’s the court-appointed custodian,” Patel said.
Allen Wilen is the court-appointed custodian of Harmony dispensary.
“I was able to remove Mr. Brodchandel,” Wilen explained.
He said he negotiated with Illicit.
“The company is going to take additional capital… to build out the project in Hoboken,” Wilen argued.
He claimed many creditors must be paid before a profit can be turned.
Mondello said the board would either recommend they are denied or heard again as Illicit Gardens.
Lack of Communication Causes Issues
“Do you know anybody from the East Coast Cannabis Company?” Freeman asked.
“No, I don’t,” Patel said.
“That company reached out to the city with interest in taking over the lease. It seems we’re adding another layer to this confusion,” Freeman said.
“I just spoke to the owner yesterday. He didn’t bring up anything,” Patel said.
“Has anybody approached the city council and said here’s our plan?” Mondello asked.
“Almost all communications was going to Mr. Brodchandel. We’re finding out things along the way,” Wilen replied. “I’m more than willing to appear before them.”
“It’s necessary,” Mondello noted.
Public Fearful of More Ligitation
“We need to make sure again the city doesn’t fall into litigation,” activist Manny Rivera-Soler said during the public comment period. “How soon did you communicate to the board and city? Why did it take so long?”
Patel said she was brought in on August 28th or 29th and sent a letter to the city on August 30th.
“Why did it take so long to notify the city of Hoboken?” Rivera asked. “You have not even built anything out. We don’t know who it is or who it’s going to be.”
“I was under the impression… that there was not an issue with the city,” Wilen replied.
He noted Brodchandel controlled communications, which was a problem. Wilen argued another company would take longer to open.
“We’ve already had an actor who’s not good. He cannot completely 100 percent vouch for whoever they sell it to,” Rivera said.
“It could be considered as hearsay this other person approaching the landlord,” Francis Dixon said.
He argued that could invite a lawsuit.
“This is an advisory board. They simply advise the city council,” Mondello replied.
“Do you have evidence of that proposed transaction with the landlord? So, we can make sure that’s on the up and up,” Dixon said.
“Board members don’t present evidence,” Mondello replied.
“Fair enough,” Dixon said.
He liked the rhetoric on social equity.
Political activists have seized on anti-cannabis sentiment as an issue to run against the Hoboken Democratic establishment candidates in this year’s council elections. They are behind lawsuits against the Blue Violets small business owned by a couple from neighboring Weehawken, and the shady MSO Story dispensary. Story passed the Planning Board despite massive opposition from locals concerned about traffic in their already busy corner of town.
Hoboken Cannabis Review Board Acts
“I hope that the city can consider that there was really one bad actor,” Patel argued.
“Chirali and Allen are asking you to take the prior support for Harmony and transfer it to Illicit. Illicit will have to come back before this board,” Mondello noted.
“Why are we being asked to weigh in now when everything is so unclear?” Morse asked.
Mondello said it was part of their decision appeal process.
“The zoning officer made a decision… that because of the complete lack of progress … to pull their approval,” Freeman noted. “We wouldn’t know any of this stuff but for the letter that was sent.”
“We certainly want to give the applicant due process. This is their opportunity,” Mondello said.
Freeman made a motion to vacate their approval.
Mondello noted that means the Council should revoke their approval.
The Hoboken Cannabis Board advised the Council to deny them local approval in a 5-0-1 vote, with Weinstein recused.
Weinstein noted that two Illicit Gardens board members are part of the Last Prisoner Project, which he advises. So, he recused himself.
Mondello said they could still make a pitch to the Council.
