There’s still time to nominate local icons for Best of D.C.
It was supposed to be completely routine. Once a quarter, players in D.C.’s medical marijuana scene get together with the Department of Health (recently renamed DC Health) to share updates. But when they all met up on a brisk day last October, the Department had big news. In 2017, the agency had solicited applications for a single new dispensary in Ward 7, which was a huge business opportunity: One finalist for the spot predicted that if they got the license, they’d bring in almost $16 million annually within a few years of opening. Only one company could get approved, though, and that day, the Department revealed that after a long, extremely competitive (and, it would later be revealed, rather bizarre) process, they’d crowned a winner: Charmed L.L.C.
Andy Hai Ting, one of Charmed’s owners, was there to accept his entrée into the hallowed elite of D.C. bud. But something he said that day later proved fateful: He told everyone he was there to represent the new dispensary, Charmed, and also to represent another dispensary, Dupont Circle’s National Holistic Healing Center (NHHC). This seemingly innocuous comment apparently prompted a months-long investigation into his business—an investigation that would end with DC Health accusing him of lying to the department, attempting to skirt the rules and open a “front” for two of the cannabis industry’s most prominent entrepreneurs. And for one attendee, RabbiJeffrey Kahn, co-owner of the dispensary Takoma Wellness Center, Hai Ting’s comment came as a shock. “We were confused and surprised,” he recalls, “and wondered if the Department of Health had changed the regulations.”
The District’s anti-monopoly rules forbid anyone from applying to hold more than one marijuana dispensary license, a rule designed to keep the medical cannabis industry from being dominated by chains and big business. But the regulations are slightly ambiguous, and Kahn had long been interested in opening a second dispensary. A few years prior, trying to figure out how strict the rule was, he wrote to the Department—perhaps he could open a second dispensary if he shuffled around some of the owners of his business so it wasn’t all the same people at the new outfit? DOH told him no. “We have nothing against anybody,” Kahn says. “But we were wondering why we were told one thing and someone else was told another.”
According to court records, shortly after that fateful meeting last October, DOH started an “in-depth” investigation of Charmed’s connection to Dr. Chanda Macias and her husband Michael Bobo, who together own NHHC. Macias is a minor campaign donor to Mayor Muriel Bowser and a major figure among the District’s cannabis providers. In 2017 court records, she wrote that 30 percent of the city’s medical marijuana patients were customers at NHHC, which had grown into a $6.5 million business just two years after it opened. And thanks to that remarkable business acumen, she’s also risen to prominence nationally, with her photo on the covers of industry magazines. She’s now involved in a handful of pot businesses across the country. But her success has not come without controversy.
This June, several industry figureheads—including Baltimore Ravens star turned cannabis maven Eugene Monroe—wrote to the Louisiana Department of Agriculture and Forestry, urging them to investigate another company Macias co-owns, Advanced Biometrics, that had recently won a contract with Southern University’s medical program. Monroe alleged that he’d been brought on as an Advanced Biometrics owner to “fulfil [the program’s] demand for greater minority ownership” during the application process, but that he and several other putative owners were promptly shut out of the organization once the application was approved. The people who signed the letter also claimed that Macias engaged in “self-help” by acting as an informal advisor to the program while she fought to get its contract. (When asked about the incident over email, a spokesperson for Charmed and NHHC pointed City Paper to anarticle where the chair of the university’s board defended Macias. He said they would not investigate and that they had no business getting involved in the company’s internal disputes.)
Examining an ownership dispute closer to home, D.C.’s Department of Health wouldn’t have to look far to realize Charmed had close ties to NHHC: They’d said so in their own application. Both of Charmed’s putative owners, Hai Ting and Andrew Carter, explained in the application that they were employees of NHHC. The Board of Directors is listed as having four members: Hai Ting, Carter, Bobo, and Macias. Macias is also listed as the chair of the board, and she repeatedly identified herself as Charmed’s CEO.
To make it all a bit clearer, the application, now court record, also included an organization chart helpfully explaining who’s in charge of who. Hai Ting is listed as COO of Charmed and Carter as the director of quality assurance. In the chart, Carter answers directly to Hai Ting, and Hai Ting answers directly to Macias.
But at the time, it appears, the Department of Health either didn’t notice this or didn’t care. Fielding dozens of hopeful applicants, by March 2018, they’d narrowed the finalists down to three. It was a race between Charmed; the national weed conglomerate PharmaCann; and another local start-up, D.C. Holistic Wellness.
All that was left was to see what the ANCs had to say. District law mandates that ANCs have “great weight” in deciding which dispensaries get to open up, so all the ANCs in Ward 7 had a chance to weigh in on the contest. The owner of D.C. Holistic Wellness, Norbert Pickett, had been getting ready for this for months. According to Anthony Lorenzo Green, an ANC 7C commissioner and a 2020 contender for Ward 7 Councilmember Vince Gray’s seat, Pickett first reached out in the summer of 2017. He wanted to open a dispensary in Deanwood, and Pickett, Green, and the other Deanwood commissioners started discussing what he could do for the community. Green says they told Pickett the area needs an urgent care center—there are currently zero east of the Anacostia—and he agreed. He’d open one up, adjoined to his dispensary.
Ultimately, ANC 7C voted unanimously to approve D.C. Holistic. The only other Commission to cast a vote was 7B, where Hai Ting and Carter’s dispensary would be based. Charmed fared worse: ANC 7B voted unanimously against Charmed getting a license.
However, their votes didn’t matter much. In July, the Department of Health told Charmed they’d won, and let the other finalists know their applications were denied. But Pickett didn’t go down easy. In short order, he filed a lawsuit against the Department, stating that “DOH provided no rationale” for denying his license and he wanted to appeal. And over the course of the trial, as the Department revealed more and more information about the process, his lawyer’s statements became increasingly irate. To make the final decision, DOH had convened a six-member panel of government employees and patient advocates in the community, who reviewed the all the Commissioners’ comments and assigned each applicant a score: That score was to be one of the main factors in the final decision. But despite the fact that ANC Commissioners widely favored D.C. Holistic, the panel ultimately gave Charmed and D.C. Holistic very similar scores.
And Pickett’s attorneys wrote that one revelation stood out to them as particularly “irrational.” One of the panelists, it turned out, scored ANC 7C’s unanimous vote for D.C. Holistic exactly as if the Deanwood Commissioners hadn’t voted at all.
City Paper was unable to ask the panelist why the panelist had made that decision: DC Health denied City Paper’s request for a list of the panel’s members, saying it is “not public information.”
DC Health also declined to comment for this article, since “DC Health is unable to comment on pending litigation.”
Initially, the Department of Health vehemently opposed Pickett’s appeal. However, shortly after the October meeting that Kahn found so confusing, their attitude changed. Just a couple weeks later, on Nov. 6, DOH brought Hai Ting in for questioning. They pressed him to explain why Macias was listed as CEO in Charmed’s application, with charts indicating she was both owners’ boss. According to a letter in which DC Health recounted the interview, Hai Ting responded that the application was incorrect—Macias is not the CEO, he claimed, and “he does not report to her as indicated in the [organization] chart.” They also said Hai Ting claimed that while “Macias has applied for a Manager’s registration for Charmed, she will not be a manager.” She would only “conduct inventory reviews,” he told them, and she would work as a cashier.
According to DC Health, Hai Ting also explained where all Charmed’s money came from: It was entirely funded by a one million dollar loan from NHHC, although he told them nothing about the loan existed in writing. Pressed to elaborate, DC Health wrote that he “initially suggested that he didn’t think there was a requirement to repay the loan.” However, he later said “he thought the loan would be repaid through reductions in his salary.”
The following week, DC Health told Charmed’s attorney that if unless they “disproved” that Macias was the real owner, their license would be revoked. Two months went by, and in January, not having received any response to the allegations, they wrote a letter to Charmed. After a long investigation, they’d reversed their decision: Charmed would not receive a license.
In that letter, DC Health recounted their discussion with Hai Ting, making a harsh conclusion. “DC Health does not find it reasonable or plausible that Chanda Macias and Michael Bobo gave or loaned one million dollars to a competitor,” wrote Arian Gibson, manager of the District’s medical marijuana program, unless they were “to share in the profits of the dispensary, or at a minimum to receive repayment of their loan.”
Gibson also detailed new findings. She said that Charmed’s five-year budget, submitted in the application, contained no plan to pay back the loan, and that Macias and Bobo were using the same bank account to fund both NHHC and the new dispensary. Additionally, the overlap in employees was even greater than the application indicated. Dispensary workers have to apply with DC Health for a license, and the Department said that all eight of the people who’d applied to work at Charmed either worked at NHHC or were currently applying to.
Furthermore, Macias’s husband, Bobo, had personally submitted all eight applications, and paid the employees’ application fees “on behalf of NHHC.”
Gibson concluded that Hai Ting and Carter had “falsely attested” in sworn affidavits that they were the true owners of their business in order to “circumvent the prohibition set forth in [the city’s anti-monopoly regulations],” and that they were “strawmen that Ms. Macias and Mr. Bobo used to register [Charmed] to serve as a front for their dispensary.”
Charmed’s attorney quickly responded to that letter, categorically denying the allegations and demanding that the Department “immediately retract the false, inflammatory, and damaging statements” made about Hai Ting and Carter. She said they had never “concealed” anything: They’d said repeatedly in their application that Macias was the CEO of both Charmed and NHHC. She claimed that Macias and Bobo were simply employees of Charmed, not owners, and that DOH had a “fundamental misunderstanding of the difference between ownership and employment.” She also wrote that DOH’s interview with Hai Ting was unfair. That day, the Department had “demanded” he submit to a “same-day interview,” and she claimed that Hai Ting had said he wasn’t sure about certain details, but DOH had accepted them as fact. In truth, she wrote, Charmed would have to pay back the money to NHHC. A spokesperson for Charmed and NHHC tells City Paper that the funds were actually a line of credit Charmed would have to pay back with interest, and that this is “common practice in the medical marijuana start-up [scene] since banking loans are not available to any businesses in the industry.” She added, “There is no profit structure in which NHHC participates.”
Charmed soon filed a countersuit, which is still pending. Responding to the lawsuit, DC Health argued against Charmed’s claim to innocence, saying they failed “to challenge any of the 24 individual findings of fact that [led] DOH to conclude that Mr. Hai Ting and Mr. Carter had made false statements when they attested to being the true and actual owners of the business.” As for why DC Health took so long to notice the parts of the application they later deemed significant, they wrote that when they first reviewed the applications, they “were not searching for evidence of false statements.”
Meanwhile, D.C. Holistic Wellness opened its doors earlier this month, and Pickett’s getting ready to open that urgent care. D.C. Holistic is the seventh dispensary to successfully break into D.C.’s nascent legal cannabis scene: an industry so closed off—and in which the government exercises such arbitrary gate-keeping power—that some advocates say it incentivizes hopeful entrepreneurs to go into the illicit market, or fight dirty.