PORTLAND, Ore. (KOIN) — Following an investigation into the cannabis company caught up in controversy and their ties to politicians, KOIN 6 News captured the owners’ reactions to Oregon Secretary of State Shemia Fagan’s resignation in real-time.
Now, in a KOIN 6 News exclusive, the co-owners are responding to all of the allegations and criticisms brought against them.
How we got here
On the outside, the owners of La Mota cannabis company — Rosa Cazares and her partner Aaron Mitchell — appear wildly successful and wealthy.
Yet, investigations revealed the pair let a house in Portland’s Hazelwood neighborhood fall into disrepair — resulting in a wave of illegal activity. Then, there are the questionable connections to Fagan, ultimately leading to the secretary of state submitting her resignation.
Furthermore, the company co-owners have also been criticized for their business practices, tax liens and lengthy litigation.
Cazares and Mitchell have opened more than 30 dispensaries across Oregon, as well as wholesaling operations, processing facilities and multiple farms.
Meanwhile, upset neighbors who live next door to La Mota’s derelict property in the Hazelwood neighborhood have been terrorized by squatters and illegal activity for three years.
“It looks like they’re multimillionaires and they just have a lot of money. And this is how they treat the neighborhoods they own,” Jacob Adams, one of those neighbors, told KOIN 6 News.
Even after the City of Portland’s Code Enforcement Team issued nearly $12,000 in liens against their neglected house for violations, Cazares and Mitchell did not fix the property they own at 13828 E. Burnside.
Cazares said they plan to demolish this house once the City of Portland approves their permit, which they applied for within the last 30 days. They expect to move forward within a week or two.
“We felt terrible. Terrible for the neighbors and how long this has taken,” Cazares said. “We are working as hard as we can to address all their concerns and issues. As soon as we are issued the demolition permit, we will demolish the structure and begin construction for a new La Mota retail location. But we sympathize.”
Why did it take three years for the squatter situation and nuisance violations to be brought under control?
“We purchased this property when it was already burnt down and we secured the structure, and then the pandemic hit. So, that really affected the response time and we’ve worked so hard to continuously clean up the property and I think just during the pandemic, it was a little out of control with everything going on in Portland,” Cazares said. “Even being the property owners, we aren’t able to remove people from our own property and clearly we live in Portland. This is a bigger issue.”
Tax woes & litigation
Records obtained by KOIN 6 News show Cazares and Mitchell have a history of default.
In late March of this year, Willamette Week reporter Sophie Peel revealed significant tax liens against the couple dating back to 2018.
Together, Mitchell, Cazares and their cannabis company have been hit with a couple dozen lawsuits since 2015. The majority of the complaints share a common theme – allegations of failure to pay bills.
Collectively, other cannabis companies, former employees, landlords and the City of Portland have taken them to court for more than $1.7 million in unpaid bills. Cazares says she can’t speak specifics on pending litigation.
“Cannabis is still in its infancy and I think it’s very common in the industry, as we’re all learning and navigating through a really intense industry that’s ever-evolving, ever-changing,” she said. “But I think that we are doing our best to resolve every issue.”
Privately, the couple lived and threw political parties in a luxury home in Portland’s West Hills.
Yet, current litigation shows the couple was renting the furnished house for $20,000 a month. While they no longer live there as of February 2023, the landlord is suing Cazares and Mitchell for $266,146.89 in unpaid rent.
“We rented the home and we were wanting to purchase the home. The home had major, major defects,” Cazares said.
“[The homeowner] just refused to fix it so we couldn’t buy it and we had to move,” Mitchell added.
The couple’s countersuit reveals Mitchell and Cazares invoked their right to withhold rent — alleging water intrusion and mold.
Records obtained by KOIN 6 News also show the couple has had tax troubles.
Files from the Oregon Secretary of State’s Office indicate Cazares and Mitchell have more than $5.6 million in tax liens from the IRS and the State of Oregon.
Plus, an accounting firm in Lake Oswego is also suing La Mota and the couple for nearly $155,000, accusing them of not paying them for their services.
In the lawsuit, the accounting firm describes what it calls La Mota’s “sloppy bookkeeping practices.” While trying to rectify La Mota’s finances, the firm said it found “significant errors and omissions.”
In an answer to the complaint filed in court, Cazares and Mitchell denied these allegations.
In their interview, Cazares told KOIN that La Mota has contributed over $35 million in taxes over the past seven years — but Mitchell admits sometimes they’re late on payments.
“I feel very proud of the amount of taxes that I pay here to Oregon to provide roads and schools,” Mitchell said. “I think doing what we do, collecting all this tax from all over the place, it gets overlooked that it’s very easy — and it’s an all-cash business, so it’s difficult to collect all that from all over Oregon.”
He said late payments are due to their complex tax situation, which requires high-security measures and physically having to drive large amounts of cash to the Oregon Department of Revenue down in Salem. For safety reasons, we are not disclosing La Mota’s security protocols.
However, the state revenue department tells KOIN they accept other forms of payment. In 2022, 65% of cannabis companies paid their taxes by check, 29% paid in cash and 6% paid via money order.
Cazares also cited the pandemic as a reason they fell behind, saying access to government offices was limited. The Salem office remained open by appointment only and reopened to walk-in services in July 2021.
Since the IRS and the Department of Revenue have fully reopened, the couple said they’ve been working to get their payments back on track.
“In Oregon, I think a little less than half a million is owed, but all of our marijuana taxes are current,” Cazares said.
KOIN 6 checked to see if La Mota’s tax issues were unusual for cannabis companies. We found that other major marijuana companies in Oregon also have numerous tax liens.
During that same time span when several lawsuits allege they failed to pay numerous business partners, and records show they neglected a property they are responsible for, Cazares and Mitchell and their company La Mota collectively made generous political donations to Oregon Democrats during campaign season.
Those donations include tens of thousands of dollars to now-Governor Tina Kotek, Secretary of State Shemia Fagan, then-Labor Commissioner (and now US Rep.) Val Hoyle.
Plus, thousands to now Labor Commissioner Christina Stephenson, Multnomah County District Attorney Mike Schmidt and Multnomah County Chair Jessica Vega Pederson.
All of these civic leaders, in one way or another, have some responsibility for regulating the cannabis industry.
It is not against the law to donate to politicians, nor is it unusual for a company like La Mota to do so.
In the interview, investigative reporter Elise Haas talked to the couple about their donations, specifically, why records show a history of default and allegations of unpaid bills, “yet when campaign season came around, you seem to be flush with cash?”
“As for our political donations, we’re a large company and we feel it’s important, especially in a new, emerging industry and as you mention it — it’s a common practice — for us to be able to have access to… How can I reword that?” Cazares said. “Sorry, sorry, I lost…I lost my thought right there.”
Mitchell interrupted and said he doesn’t understand the scrutiny.
“Thousands of companies in Oregon contribute to politics,” he said. “We don’t understand why as cannabis operators, we’re being scrutinized.”
As the interview went on, Cazares shared her disappointment about the fallout from these controversies.
“I’m a mom of a five-year-old and I made a lot of sacrifices because… when you come from nothing and you’re given an opportunity, I felt as a Latina, as an immigrant, it’s my job to pass that along,” she said, as she got choked up.
As a first-generation entrepreneur and CEO at 34 years old, Cazares says she’s still growing.
“For me, what I want to take from this is it’s a learning experience to be better — to be a better person and to learn,” she said.
What leaders say
“I am appalled at the allegations made against Mr. Mitchell, and as a resident of the Hazelwood neighborhood, I’m outraged at the conditions of his property in my neighborhood. As a result, I am donating each of the $500 campaign contributions from Mr. Mitchell and Ms. Cazares to the Hazelwood Neighborhood Association, and I will do all in my power to ensure that Mr. Mitchell is held accountable…” — Multnomah County Chair Jessica Vega Pederson
“Seeking campaign donations is not a part of the process I like, but when you have working-class people running for office, you can’t just write yourself a check. That means we have to rely on contributions to fund campaigns. We need a different system, which is one reason I support campaign finance reform. I’ve returned all campaign contributions from La Mota owners and won’t be taking any additional funds from them.” — US Representative Val Hoyle
To be clear, Hoyle returned the majority of the more than $20,000 in campaign donations soon after receiving them because she decided to run for Congress instead of labor commissioner.
Our records show Tina Kotek’s campaign received $70,865 from the couple and their company. Meghan Cavanaugh, Governor Kotek’s former campaign manager said:
“The contributions from La Mota were made legally during the course of the campaign for Governor, but in the interest of transparency and reducing any distraction from the work of the people, the Governor has made a contribution in the amount of $75,000 to Oregon Food Bank for food acquisition.”
Before resigning and after admitting she made a mistake in agreeing to work for Mitchell and Cazares, Fagan said she planned to donate what remains of their $45,000 in campaign contributions and the rest of the money in her political action committee to the Oregon Humane Society.
Multnomah County District Attorney Mike Schmidt is donating around $2,000 to the Urban League of Portland.