Two applicants for retail cannabis licenses in Redwood City have been accused of falsifying applications in Fresno

BY EMILY MIBACH
Daily Post Staff Writer

Two of the businesses that have applied to open cannabis stores in Redwood City are accused of falsifying parts of their applications in order to get permits to run marijuana stores in Fresno.

TAT Fresno and Authentic 559, which have ties to similarly named TAT Redwood City and Authentic 650, are identified in a lawsuit that says they claimed local residents had control over their companies when they didn’t.

In Fresno, an applicant that has partial or complete local ownership will get a higher score than non-local applicants. The higher the score, the more likely they’ll get a permit to open.

The lawsuit was filed by another cannabis retailer, Catalyst, against the city of Fresno, and TAT and Authentic were named as “real parties in interest” in the complaint. Catalyst sued after it lost the competition to get a permit to open a store in Fresno.

Fraud charges

Additionally, the San Joaquin Valley Sun reports that Brian Mitchell, who is listed as the owner of Authentic 650, is facing fraud charges in Alameda County for felony insurance and worker’s compensation fraud.

Still, TAT Redwood City and Authentic 650 ranked third and fourth among the 27 businesses that applied for permits in Redwood City in the interim scoring process. The city is now in the final stages of the process and the finalists have not been announced.

City Manager Melissa Stevenson Diaz’s team has been reviewing the 27 applicants to see who gets six permits. She’s basing her rankings on factors such as their security plan and whether they would follow diversity, equity and inclusion standards when hiring employees. Stevenson Diaz gave TAT Redwood a 100% rating and Authentic 650 99.83% in the interim scoring process.

A panel of city employees has interviewed the top 18 applicants, and is in the “final stages” of its process to narrow the list down to six, a city spokeswoman said.

Redwood City is the first city on the mid-Peninsula to allow cannabis stores. Redwood City, San Carlos and Mountain View have allowed for non-retail cannabis businesses, such as delivery centers and nurseries to open up.

Shops could open downtown along most of El Camino Real, from Harrison Avenue to the city’s border with unincorporated North Fair Oaks, and from Arch Street to Avondale Avenue. They will also be allowed along Veterans Boulevard from Standish Street to the city’s border with San Carlos.

They could also go along Woodside Road from Hudson Street to Safeway and along Arguello/Broadway between Fuller Street and Hamilton Street.

Furthermore, shops could end up along Seaport Boulevard and a handful of other spots throughout town.

City taxes

The city has a 4% gross receipts tax on cannabis retailers, which could prove to be a regular revenue stream for the city if the retail marijuana business gets going. The city can increase the tax up to 10%, but the city’s consultant, David McPherson, recommended that the city just leave it at 4% for now and then reassess how the businesses are doing once they are established.

If there are six businesses in the city, the tax would bring in $1.32 million a year, according to an October 2020 report from Assistant City Manager Alex Khojikian.

Correction: An earlier version of this story should have described TAT Fresno and Authentic 559 as “real parties in interest” in Catalyst’s lawsuit against the city Fresno.