Democrat secretary of state in Oregon resigns after taking side hustle with cannabis company

The secretary of state of Oregon has tendered her resignation after she was caught earning tens of thousands of dollars from a cannabis company, even as the state conducted an audit of the cannabis industry.

On Tuesday, Shemia Fagan, a progressive Democrat, announced that she has resigned, effective May 8. At that point, Deputy Secretary of State Cheryl Meyers will take over the position until Gov. Tina Kotek (D) appoints a replacement to complete the term. Fagan was first elected to the position in 2020 and would have had the option to run for re-election next year.

The issues related to Fagan's resignation began earlier this year, when she signed a consulting contract with Veriede Holding LLC, a subsidiary of La Mota, which is one of the largest cannabis companies in the state. Fagan agreed to assist Veriede with navigating other states' cannabis regulations and licensure requirements in exchange for $10,000 a month plus $30,000 for each state license the company managed to acquire. Fagan estimated that she spent approximately 15 hours per week on Veriede business.

Fagan first signed the contract with Veriede in late February when the state was wrapping up an audit it had been conducting of the cannabis industry for nearly two years, an audit that Fagan initiated. Fagan recused herself from the audit just days before signing the contract with Veriede, but by that time, a final draft of the audit had already been submitted to the Oregon Liquor and Cannabis Commission.

Despite the apparent conflict of interest, Fagan claimed on Tuesday that she did nothing illegal. "While I am confident that the ethics investigation will show that I followed the state’s legal and ethical guidelines in trying to make ends meet for my family, it is clear that my actions have become a distraction from the important and critical work of the Secretary of State’s office," she said when announcing her resignation.

During her announcement, Fagan suggested that the annual salary of $77,000 she earned as secretary of state was inadequate and that her contract with Veriede, which she has since terminated, helped supplement her income. "I’m starting over financially after a divorce," she explained. "I have two young kids. I have student loans and other bills. I’m a renter in the expensive Portland metro area, and I’m the sole income earner in my household."

Fagan also admitted that Rosa Cazares and Aaron Mitchell, who own La Mota, the parent company of Veriede, have donated to her campaign. They gave $45,000 to her in 2020 and have donated hundreds of thousands to various Democrats in the last several years. Despite those lavish donations, Cazares and Mitchell are embroiled in a scandal of their own. They have been accused of stiffing several vendors and have several liens against them for allegedly unpaid state and federal taxes.

"This is an unfortunate situation," said Deputy Secretary of State Meyers, Fagan's eventual replacement, "but a change of leadership will allow agency staff to continue their good work with less distraction moving forward."

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