Target 12 on WPRI.com

Pot biz threatens suit if RI delays adding more medical marijuana dispensaries

Target 12

PROVIDENCE, R.I. (WPRI) — A newly established medical marijuana company with high-level political connections has threatened to sue if the state does not immediately begin licensing new dispensaries, the Target 12 Investigators have learned.

The demand was contained in an Oct. 7 letter sent by Stephen Izzi, a lawyer for Green Reservoir Inc., and obtained by Target 12. The letter included a draft Superior Court complaint the company said it was prepared to file if the Raimondo administration continues to hold off on licensing new dispensaries.

It was not immediately clear Thursday evening whether a suit had been filed.

Green Reservoir was incorporated the same day the letter was sent, according to records filed with the secretary of state’s office, and has caught the attention of political observers. Its corporate directors include a longtime State House player on cannabis issues and a former Democratic candidate for state representative.

The back-and-forth over Green Reservoir sheds light on what’s been happening behind the scenes as Gov. Gina Raimondo and House Speaker Nicholas Mattiello have been battling over cannabis regulations.

In June, House leaders added a provision to the budget that would give lawmakers an effective veto over new cannabis rules. Common Cause Rhode Island called the move unconstitutional, and Raimondo filed suit Tuesday to block it — even though Mattiello had already abruptly reversed course days earlier, promising to repeal the provision in January.

“Something stinks about what’s happening here, and it’s not the marijuana,” John Marion, executive director of Common Cause, said Thursday night in response to Target 12’s report.

With lawmakers seeking to “maintain power” over the crucial regulations for medical marijuana, Marion said, “The latest developments show the amount of money that is at stake and why it is important that the administration be allowed to develop regulations without political interference.”

Letters show rising impatience

Izzi’s message marked a sharp change in tone for Green Reservoir compared with a previous letter that had been sent by Mark Ryan, a powerful State House lobbyist with close ties to House leaders. (Ryan has not yet responded to messages.)

Since February, Ryan has been getting paid $9,000 a month as the lobbyist for an enterprise called Growth Industries of New England — an alternative name created earlier this year for Kelsey Green LLC, which has held a state marijuana cultivator license since 2017. The Oct. 7 letter said the two companies, Green Reservoir and Kelsey Green, “will be combining.”

On Sept. 5, Ryan sought information about when the Department of Business Regulation would begin accepting applications for the six new medical marijuana dispensaries — known as compassion centers — authorized by lawmakers in June. He also asked for a meeting.

The department’s Norm Birenbaum, the state’s top marijuana regulator, responded on Sept. 19, telling Ryan the application process was on hold until the department finished writing new regulations. (Administration officials have elsewhere attributed the delay to uncertainty over the legislative veto provision.)

“There has been significant stakeholder interest and inquiry into the application and licensing process for new compassion centers,” Birenbaum wrote. “In order to ensure transparency and fairness, the department has decided not to meet, individually, with any stakeholders about the future compassion center application and licensing process.”

He added, “Thank you for your patience.”

Izzi — a lawyer at Ryan’s firm, Moses Ryan Ltd. — argued in his Oct. 7 letter that Birenbaum’s department has no need to write new regulations for licensing compassion centers, and is violating state law by “failing to immediately accept applications” for the six new licenses. He suggested using the current renewal application rules instead.

“Our client is ready, willing, and able to submit all information and materials in compliance with the existing renewal application,” Izzi wrote, saying the letter itself “serves as Green Reservoir Inc.’s formal application” for a license. He demanded an answer by Wednesday — which wound up being a day after the governor filed suit over the issue.

Matt Sheaff, a spokesperson for the department, said the Raimondo administration disagrees. The governor has signaled she wants to use a lottery system to award the new licenses.

“Green Reservoir has attempted to submit a compassion center application,” he said. “DBR is committed to an open and transparent process that guarantees a level playing field and the department is not accepting applications for licenses until after new rules and regulations governing the application and selection process have been promulgated.”

‘A state-of-the-art facility’

Green Reservoir’s incorporator and director, Alex Lavin, is a Providence College graduate who has been active on cannabis at the General Assembly for several years. In 2015, he was a leader of a company that made an unsuccessful attempt to legalize hemp. (That company’s lobbyist was former House Speaker William Murphy.)

Lavin is also listed as the manager of Kelsey Green, which in May announced it had raised $17 million from private investors and planned to begin manufacturing products in Warwick the following month. Kelsey Green’s place of business is listed as 815 Jefferson Blvd., a 600,000-square-foot building which is also home to other cannabis companies. (Lavin did not respond to an email Thursday.)

Green Reservoir’s incorporation papers list two other company directors. One is David Chenevert, a prominent local business leader who ran unsuccessfully in 2016 as a Democratic candidate for state representative. (Chenevert also tried to organize a meet-and-greet for Mattiello during the speaker’s 2018 re-election campaign which was called off after unions threatened to protest.)

In an interview Thursday, Chenevert told Target 12 he and his investment partner, Brad Dean, were approached about two years ago by Lavin to invest in the new compassion center. (Dean is also listed as treasurer of Kelsey Green.) He was asked to put his name on the incorporation papers, he said, “maybe because I’m around a little bit and people know me.”

“I know there’s a lot of people involved politically, but my involvement is strictly from an investment standpoint. … Alex Lavin is the prime mover on this one,” he said. He praised the Green Reservoir building as “a state-of-the-art facility,” adding, “it will blow away most of the current dispensaries that are out there.”

Chenevert said multiple government officials have visited the facility already, including Speaker Mattiello. (A spokesperson for the speaker said he will look into when Mattiello’s visit took place and any meetings he had involving Green Reservoir or its sister company.)

The incorporation papers list Green Reservoir’s other director as David Medeiros, a retired Rhode Island State Police lieutenant and Alex and Ani executive who was recently in the news for filing a false document with the DMV.

Reached Thursday, Medeiros’s attorney Brandon Bell said Medeiros “was involved in the construction part as a consultant, but his name is not on the application.”

Ted Nesi (tnesi@wpri.com) is WPRI 12’s politics and business editor and a Target 12 investigative reporter. He is a weekly panelist on Newsmakers and hosts Executive Suite. Follow him on Twitter and Facebook

Eli Sherman (esherman@wpri.com) is a Target 12 investigative reporter for WPRI 12. Follow him on Twitter

Steph Machado, Tim White and Walt Buteau contributed to this report.

Copyright 2020 Nexstar Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Providence

Download Mobile Apps from WPRI 12
DOWNLOAD APPS NOW: Apple App Store | Google Play Store
Watch 12 on 12: The Mafia Tapes - Only on WPRI.com
PINPOINT WEATHER // Quick Links:

Dan Yorke State of Mind: Dan's Daily Update

DYSOM 11/4/20:Joe Cammarano, Political Science Professor, Providence College

More Dan Yorke State of Mind

Don't Miss

Viewer Pa on WPRI.com

LIVE CAMS on WPRI.com

More Live Cams

Community Events & Happenings

More Community

The Border Report Tour

More Border Report Tour