The multicomponent assembly of a nitrile‐based directing group in a set of arylacetic acids under solvent‐free mechanochemical conditions using the Passerini 3‐CR and the subsequent Pd(II)‐mediated meta‐C(sp2)‐H bond olefination process has been achieved. The protocol demonstrated that removing the DG under mild conditions from the activated Passerini adducts affords a novel N‐(tert‐butyl)‐2‐(2‐cyanophenyl)‐2‐hydroxyacetamide, which can be re‐utilized in the future as DG in other distal activation processes.