Hi all,

Here’s an exclusive for WeedWeek Pro subscribers.

Alex 

Dispensary La Brea Collective on LA’s Pico Blvd. has a storefront and a delivery service.

In May 2022, La Brea CEO Daniel Michael Sosa, and Cory Azzalino, CEO of SF-based delivery app Eaze, signed a partnership. The document, one of several leaked to WeedWeek, describes an arrangement where Eaze’s wholly-owned subsidiary Stachs pays La Brea $15,000/month to operate a separate delivery service out of the same building, on the same state cannabis license.

According to the 20-page agreement, Eaze/Stachs’ manages its own inventory, workers and vendor relationships. For its part, La Brea has to maintain its license and provide Eaze with 400 feet of warehouse space and four parking spaces.

• WeedWeek also received executed documents that detailed similar deals between Eaze/Stachs and licensed companies.

The existence of these deals attracted attention in July when a lawsuit alleged that Eaze is “essentially ‘renting’… cannabis licenses and operating their own business at the licensed premises (in some instances, alongside the actual license holders) in violation of California law.” 

After WeedWeek broke news of the lawsuit, Eaze CEO Azzalino told SFGate that its subsidiary Stachs is “legally licensed for all of its cannabis operations.”

But a few months earlier, an email Azzalino had received from Eaze general counsel Dan Kramer cast doubt on the legality of its partnerships. “PRIVILEGED AND CONFIDENTIAL,” Kramer wrote. “I am growing increasingly concerned about how our CA depots are run.”

“We haven’t gotten caught yet, but this could end up being a major issue at some point soon,” Kramer wrote.

Asked about the agreements and email, CEO Azzalino wrote, “Eaze’s subsidiary Stachs LLC is licensed as an Owner (per [California Department of Cannabis Control] (DCC) regulations) at all thirteen of our delivery locations. Any operations governed by Management Services Agreements [MSAs] have been disclosed to the DCC. Any claim to the contrary is inaccurate.”

In a letter, Eaze’s Oakland-based outside counsel Fred Norton demanded that I identify the source of the leak and threatened that publishing or discussing the leaked documents, which he claims was stolen from them, exposed me and WeedWeek to liability.

• Here’s the response from WeedWeek’s counsel, Roger Myers of Bryan Cave.

Read the story…