Pasadena City Manager Steve Mermell called for changes to the city’s cannabis business approval process in the interest of fairness, despite numerous previous claims defending the ordinance that established those rules.

The city Planning Commission will meet on Nov. 13 to consider amendments that will allow not one but up to three dispensaries in each council district, and decrease the minimum distance between cannabis retailers from 1,000 feet to 450 feet.

The amendments will not allow for more than six operators and would not change the distance requirements to churches, schools and residential areas.

The Planning Commission will forward its recommendation on the proposed amendments to the City Council, which will make a final decision at a separate hearing.

“If the Planning Commission and the City Council decide to modify existing regulations, there is likely ample space in the city to accommodate all six of the retailers that scored highest in the city’s application process,” said Mermell. “This is a fair and equitable solution to the lack of suitable space under present regulations while preserving all of the protections for neighborhoods and sensitive uses.”

Last year, voters passed Measure CC which allows up to six cannabis retailers to operate in Pasadena, one in each of six of the council’s seven districts. Voters also allowed the council to retain the authority to amend existing ordinances and adopt future ordinances regarding commercial cannabis business activities.

In June, the Atrium Group, Harvest of Pasadena, Integral Associates Dena, Tony Fong, Sweet Flower Pasadena and MME Pasadena Retail beat out 116 other applicants and won the right to apply for a conditional use permit to operate in Pasadena.

Harvest was granted a CUP for District 3 in Old Pasadena after the city deemed applications by Atrium and Sweetflower to open shops in that area incomplete.

Atrium filed a lawsuit and accused the city of ignoring its own ordinance. Sweetflower lost an appeal.

If the proposed changes Mermell initiated are approved, Sweet Flower and Atrium would be allowed back into the process and could open shops in Old Pasadena near Harvest.

In their lawsuit, owners of The Atrium Group of Westlake Village assert the company has suffered substantial economic damages, including loss of sales and business profits, injury to its business reputation and loss of business opportunity.

“On the basis of knowledge and belief, the wrongful actions alleged were committed by David Reyes, Director of Planning, City Manager Steve Mermell, Asst. City Manager Nicholas Rodriguez, City Attorney Michelle Bagneris, Management Analyst IV Guille Nuñez, and other unknown persons working on behalf of the city of Pasadena,” the lawsuit states.

The lawsuit filed in US District Court names as defendants the city, Mermell, Reyes, Harvest of Pasadena (another applicant based in Arizona), Hinderliter De Llamas and Associates of Brea (a consultant group that reviewed the applications), and does one through 10.

That lawsuit could go away if Atrium is allowed back in the process.

After the process, first the losers in the selection process began accusing the city of fraud.

After unsuccessfully attempting to appeal the city’s decision not to select his company, Damian Martin of WOW Health and Wellness, accused Reyes of covertly changing the rules of the process in a “secret, illegal, and total underhanded fashion.”

Each of the applicants paid the city a $14,000 application fee.

Reyes later announced that only three dispensaries would probably be able to open due to the regulations in the initiatives ordinance. That was later amended to four.

The city’s cannabis picture could get even cloudier at the ballot box in March if an initiative passes that is supported by 18 cannabis operators forced to shut down by the city for operating without a CUP. The city announced illegal operators would not be allowed to take part in the city’s cannabis selection process.

The city has long battled so-called nuisance operators that opened storefronts without a business license or a conditional use permit.

The group has collected the necessary signatures to place the Supporters of People’s Initiative to Preserve the Existing Operation of Non-Offending Commercial Cannabis Businesses on the March 3 ballot.

The group is hoping to strike down Measure CC. The initiative allows so-called nuisance business owners that city shut down to reopen.

“Non-offending commercial cannabis businesses may continue engaging in commercial cannabis activity within the city of Pasadena without a commercial cannabis permit from the city of Pasadena until December 31, 2024,” states the initiative. “Non-offending commercial cannabis businesses operating without a permit pursuant to this subdivision shall not be deemed, ordered discontinued, modified, or removed as a public nuisance pursuant to the Pasadena Municipal Code based solely on their engagement in commercial cannabis activities permitted by this Chapter.”

City officials discussed passing a counter initiative to combat the non-offending initiative, but so far it has not been received by the council.