A Nonprofit Co-Founded by La Mota’s CEO Got a Half-Million Dollars From the State

After WW published its monthslong investigation into La Mota, the state agency terminated the grant.

On March 29, WW published the results of an investigation into the business dealings of Rosa Cazares and Aaron Mitchell, co-founders of cannabis dispensary chain La Mota. The story reported on $3 million in federal and state tax liens issued against the couple and their companies in recent years, and detailed 30 lawsuits filed in Oregon circuit courts, many alleging unpaid bills. At the same time they were failing to meet their obligations, the couple contributed hundreds of thousands of dollars to the political campaigns of top Democratic Party candidates.

The same day WW published its story, the Oregon Bureau of Labor & Industries formally terminated a half-million-dollar grant awarded to a brand-new nonprofit co-founded by Cazares, and asked for the money back.

It’s an unprecedented reversal, and records show the grant (the largest awarded in that funding round) was controversial when first considered by a council run by BOLI last year. The current and former heads of the agency received campaign contributions from Cazares. The revelations now raise questions about two state agencies—BOLI and the Oregon Liquor and Cannabis Commission—and their dealings with the state’s second-largest cannabis chain, whose owners are the Oregon weed industry’s largest Democratic campaign contributors.

Joy Hudson co-owns Nimble Distribution, a cannabis company. She says the grant—and its sudden cancellation—sows further public distrust of the industry.

“Trust in the industry is totally broken from this,” Hudson says. “We’re affected by all these poor decisions.”

Here is what we know.

On Aug. 26, 2022, BOLI awarded more than half a million dollars to a nonprofit co-founded by Rosa Cazares, who also runs La Mota, the second-largest cannabis dispensary chain in the state.

BOLI gave the $554,990 grant to the brand-new nonprofit ENDVR, which pledged in its application to create an apprenticeship program for botanical extractionists—that is, lab workers who extract chemical compounds from the cannabis plant.

Cazares told the Oregon State Apprenticeship and Training Council that ENDVR, whose place of business in state filings is listed as a mini storage unit in Beaverton, would deliver. “We are all very motivated women,” Cazares said.

ENDVR had no evident track record in job training—or of performing any work. Nevertheless, then-Oregon Labor Commissioner Val Hoyle called it an “important investment” and vouched for the program. The council approved the grant, which was the largest of the 10 grants issued in that round of funding. The other grant recipients included a number of well-established educational institutions, like Chemeketa Community College.

“We’re looking at a time when [cannabis] will be legal federally. Without federal legalization, this is a billion-dollar industry in Oregon,” Hoyle said at a July 27 meeting of the council to vet the grants. “And when this can be exported across state lines, it’s going to be larger. So professionalizing the workforce is important.”

Cazares and Mitchell contributed $26,800 to Hoyle’s election campaigns over the past year and a half. That sum includes $5,800 given by the couple to Hoyle’s congressional campaign to succeed retiring 4th District Congressman Peter DeFazio, two days before the grant application opened. (Hoyle returned all donations made to her BOLI reelection campaign, including a $20,000 donation from Aaron Mitchell, before running for Congress.) Cazares also contributed $4,000 to current Labor Commissioner Christina Stephenson, and Cazares’ PAC donated another $3,500 to Stephenson.

Cazares founded ENDVR in December 2021 with Laura Vega, who founded a cannabis products company and served on an array of cannabis advisory bodies.

Public records show the IRS approved ENDVR’s nonprofit status on April 16, 2022, two weeks before BOLI opened the application period for the apprenticeship grants.

Current board members of the nonprofit include Cazares, who is board chair; Fred Voelkel, the chief operating officer of La Mota; and Mary Allen, who worked under contract with La Mota helping to manage its payroll. (Allen declined to say whether La Mota is still a client.) That means three of the four current board members of the nonprofit are affiliated with La Mota. None responded to phone calls, and Cazares’ attorney did not answer emailed questions.

Vega did not provide concrete examples of prior work ENDVR accomplished.

Back on July 27, 2022, the Oregon State Apprenticeship and Training Council greenlighted $1.6 million in grants for workforce training. It approved all 10 apprenticeship proposals presented that day. Except one: the application from ENDVR for the largest amount of money requested by any of the applicants.

In a recording of the meeting, members of the council expressed skepticism about ENDVR’s high personnel costs—$97,000 a year for Vega alone—and how so few graduates, only four, would actually be trained.

“I’ve read this I don’t know how many times, and I’m baffled as a taxpayer how you can expect half a million dollars to support four people being trained,” said council member Evan Stuart at the July meeting. “I don’t even know how this got through the committee.”

Hoyle interceded. She asked Vega to come back with a stronger proposal the following month. “I look forward to seeing you in a month and being able to support this,” Hoyle said.

When the council reconvened in August, Vega brought witnesses to vouch for the program.

One was board member Matt Maletis of the Oregon Liquor and Cannabis Commission, which regulates cannabis. “I got to know Rosa…when La Mota had maybe one or two stores, and what she’s done, as well as Laura, from the time I got to know them to now, is just phenomenal,” Maletis said. “The fact that they’re willing to give back and train others how to do this is admirable.”

The council approved the grant unanimously. Three members who had expressed skepticism initially ended up voting for it.

Hoyle told WW in a phone call that she remembers speaking to Vega about the apprenticeship prior to the application period, but can’t recall if she ever spoke to Cazares. (Vega says she did not speak with Hoyle.)

“I know Laura, and certainly she called and asked me about it, and I said, yeah, sure, go ahead,” Hoyle says. “I don’t recall [talking to Rosa]. I may have, I’m not saying I did or didn’t.”

Hoyle insisted Cazares’ and Mitchell’s campaign contributions did not affect her support for the ENDVR grant.

“Are you asking if they bought their access into this apprenticeship program for $6,000?” Hoyle said. “No.”

Nevertheless, under new leadership since the election of Christina Stephenson in November, BOLI has reversed course. On March 16, WW contacted Stephenson with questions about La Mota. That same day, BOLI emails show, the agency discussed canceling the contract. On March 29, the same day WW published its findings on La Mota, BOLI sent a formal termination letter to ENDVR.

“You are hereby directed to immediately cease all grant-related activities and expenditures unless otherwise directed in writing by BOLI,” wrote agency grants manager Kiely Corti. “ENDVR must return all currently unexpended funds…BOLI will not disburse any additional funds.”

Vega wrote back March 30, sounding surprised.

“We believed we were exceeding all of the grant criteria and so this cancellation comes as a complete shock,” Vega wrote. “We had made significant progress in achieving our goal of providing opportunities for populations of color.”

Vega tells WW that ENDVR will continue its work and hopes eventually to get the state’s stamp of approval as a certified apprenticeship program.

A BOLI spokeswoman declined to give the reason for canceling the grant, but says ENDVR is expected to return all of the remaining grant money not yet spent. As of March, that totaled just over $180,000. The agency has not yet received the unspent funds from ENDVR; Vega says she’s awaiting return instructions.

Clarification: This story has been updated to reflect that Hoyle returned all donations to her BOLI reelection campaign, including from Aaron Mitchell, before running for Congress. Mitchell and Cazares subsequently gave to her congressional campaign.

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