Oregon Secretary Of State Consulting Agreement With Cannabis Dispensary Chain Affiliate

Oregon Secretary of State, Shemia Fagan, has raised concerns after entering into a consulting agreement with an affiliate of the troubled cannabis dispensary chain, La Mota, whose owners are under scrutiny from multiple state agencies.

Fagan’s auditors are currently examining the Oregon Liquor and Cannabis Commission‘s handling of the cannabis industry, but she has recused herself from involvement in the audit.

Gov. Tina Kotek called for two investigations — one by the Oregon Government Ethics Commission into Fagan’s actions and another by the Department of Justice into the newly released audit. The Legislature’s top two Democrats both said they were deeply concerned by the situation.

“Secretary Fagan recused herself from the OLCC audit on Feb. 15 because she was planning to begin a limited consulting contract with Veriede Holding LLC (an affiliate of La Mota),” spokesman Ben Morris said. “The contract with [Veriede] began on Feb. 20, 2023, and is for projects outside of Oregon.”

However, her decision to work as a private consultant while serving as a public official has raised eyebrows.

Although Oregon ethics laws allow public officials to take outside employment, Fagan’s contract with Veriede Holding LLC, which is affiliated with La Mota, has led some to question whether this represents a potential conflict of interest.

According to Willamette Week, Veriede’s contract with Fagan stipulates that they will “abide by guidelines for public officials,” but with La Mota’s owners holding licenses for farms, wholesale operations, and dispensaries, some are concerned that Fagan’s work with Veriede could be problematic.

The Oregon Department of Revenue has also filed over $1.5 million in liens against the companies’ owners, Rosa Cazares and Aaron Mitchell, for unpaid taxes, including over $592,000 in marijuana sales taxes.

In related news, Oregon Congressman Earl Blumenauer is pushing for the Small Business Tax Equity Act, which aims to amend the IRS code to allow state-legal cannabis businesses to take federal tax deductions.

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