Pot dispensaries face Multifaceted legal fight
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Photo/AP
Cities are fighting medical marijuana storefront operations in court and through pressures on landlords.
BY RICHARD K. De ATLEY
STAFF WRITER
Riverside Press Enterprise
Published: 01 October 2011 11:30 PM
Inland area cities and counties are working to close storefront medical marijuana dispensaries that have appeared all over the landscape in the past two years.
The store operators and their attorneys say they are legitimate businesses under California’s Prop. 215, passed in 1996 by approval of 56 percent of voters. It authorized legal use of medical marijuana.
Local governments that have taken action — in the courts or at city halls — against dispensaries include Riverside , Jurupa Valley, San Jacinto, San Bernardino County, San Bernardino, Lake Elsinore, Beaumont, Perris, Hesperia, Colton and Corona.
Cities are concerned that dispensaries are not adhering to medical marijuana guidelines, have questionable supply sources and attract crime.
“Cities have a problem because the stores are enabled by state law,” said attorney James DeAguilera of Redlands, who represents several dispensaries. “Cities have the right to regulate … but they do not have the right to ban what the voters said is legal.”
Store owners say they feel extraordinary pressure.
“When I went to a city meeting, it was like a criminal trial,” said Robert Hogan, who ran the now-closed Superior Healing Solutions in San Jacinto. He has since moved his store to Riverside.
Hogan, a former trucking company operator, said he spent $32,000 on legal bills trying to stay open in San Jacinto. His customers included a retired police officer with stage 3 cancer, he said. He left because his landlord was being threatened with a $150,000 fine, he added.
Lawyers for cities that want to ban the dispensaries say nothing in Prop. 215 authorized brick-and-mortar stores. The attorneys said they question the legitimacy of claims that the dispensaries are nonprofit collectives, serving only people who have a medical need for cannabis.
“State laws don’t even remotely contemplate storefront dispensaries,” said John D. Higginbotham, a Best
Best & Krieger attorney who represents several cities in their fight to ban clinics. “This is not Grandma with cancer … these stores are facilitating recreational drug use.”
Further complicating the legal landscape: While California and other states have adopted legal use of medicinal marijuana, the federal government still classifies it as a dangerous drug with no legitimate purpose.
“What is often lost in the discussion is that marijuana use is still illegal under federal law,” said Jeff Dunn, another BB&K attorney who has litigated against dispensaries.
While states may create medical marijuana laws, “a state cannot legalize what the federal government has ruled illegal. This is about the complex interplay of federal law, state law and the city and county public safety authority,” Dunn said.
The legal arsenal employed by municipalities include ordinances banning medical marijuana storefronts, imposing thousands of dollars in code violation fines on operators, and pressuring landlords to evict the stores.
That last tactic has been effective, DeAguilera said.
Cities send letters to landlords warning them of fines or other action because they are renting to a business that operates in violation of federal law, or without proper permits. The landlords take care of the problem by evicting tenants.
Two dispensaries in Colton recently shut down as landlords faced $1,000-a-day fines.
DeAguilera said the legal reasoning is flawed and will be fought in court. “The landlord is not responsible. The leases do not authorize the providing of medical marijuana, it does not condone it; it is silent on that,” said DeAguilera, who represents one of the most recently closed dispensaries.
Cities also have turned to Sacramento to define city and county regulatory powers regarding the stores.
Gov. Jerry Brown recently signed AB 1300, which specifically gave cities and counties the right to regulate medical marijuana dispensaries, although he believed they already had that right. He vetoed a bill that would have set state standards and, Brown said, would have preempted local governments from taking action.
“A fundamental part of being a city is to protect public safety,” said Dunn, who is chairman of the California League of Cities ad hoc committee on medical marijuana. He said the local control is “of critical importance for cities and counties, and extends beyond medical marijuana issues.”
Fines can be severe.
As of late June, the city of San Jacinto had assessed $639,000 in penalties against the Nature’s Serenity dispensary, which eventually was evicted and closed. Beaumont fined a dispensary $600,000, until narcotics investigators shut it down.
Store operators have pushed back by asking courts to throw out the municipal codes banning dispensaries, or at least to put those laws on hold so they can do business while litigating. “The cities are not without remedy to handle bad operators,” said attorney Roger Jon Diamond, who represents G3 Holistic Inc. in its legal action against the city of Highland, a case now before the state Fourth District Court of Appeal. “Those facilities can be handled by a nuisance action or criminal prosecution if the establishment is not obeying all the rules and regulations.”
The Highland case has a tentative decision that favors the city, as does a case from Riverside. Arguments are still to be heard in both cases. Commenting only on his case, Diamond said he remained confident he will prevail.
He said he believes the question — whether local governments can ban dispensaries — will ultimately go before the California Supreme Court. But Higginbotham said if the appellate court rulings remain uniformly in favor of cities, there may be no reason for the state high court to take up the matter.
Law enforcement has mostly been in the background, but as the dispensaries proliferate and questions are raised about the sources of their marijuana supply and the legitimacy of customers, at least one official believes police may play a greater role.
Riverside County Assistant Sheriff Jerry Williams said about 105 dispensaries are in his county right now, compared with 35 last year. In addition, about 300 mobile dispensaries — vehicles — have been identified.
“Several of these dispensaries are owned by one person or the same group of people,” he said. “They sell to anybody with money. Basically these are just drug dealers.”
But it can take a lot of staff and about three months of investigation to gather enough evidence to seek charges alleging a clinic is violating the law, he said. Investigations are spurred by complaints over increased local crime and public marijuana smoking near a dispensary , he said.
Williams said some marijuana is raised locally, but “a great deal, literally tons of it, are coming from Mexico … and there is no question, if it is coming up from Mexico, it is cartel-driven.”
He said information is fostering a more skeptical view of the dispensaries. “We are seeing a change of attitude. … I think there is going to be a change. It won’t be happening overnight, but there will be a change.”
“State laws don’t even remotely contemplate storefront dispensaries. This is not Grandma with cancer … these stores are facilitating recreational drug use.” John D. Higginbotham, attorney who represents several cities in their fight to ban marijuana clinics
The store operators and their attorneys say they are legitimate businesses under California’s Prop. 215, passed in 1996 by approval of 56 percent of voters. It authorized legal use of medical marijuana.
Local governments that have taken action — in the courts or at city halls — against dispensaries include Riverside , Jurupa Valley, San Jacinto, San Bernardino County, San Bernardino, Lake Elsinore, Beaumont, Perris, Hesperia, Colton and Corona.
Cities are concerned that dispensaries are not adhering to medical marijuana guidelines, have questionable supply sources and attract crime.
“Cities have a problem because the stores are enabled by state law,” said attorney James DeAguilera of Redlands, who represents several dispensaries. “Cities have the right to regulate … but they do not have the right to ban what the voters said is legal.”
Store owners say they feel extraordinary pressure.
“When I went to a city meeting, it was like a criminal trial,” said Robert Hogan, who ran the now-closed Superior Healing Solutions in San Jacinto. He has since moved his store to Riverside.
Hogan, a former trucking company operator, said he spent $32,000 on legal bills trying to stay open in San Jacinto. His customers included a retired police officer with stage 3 cancer, he said. He left because his landlord was being threatened with a $150,000 fine, he added.
Lawyers for cities that want to ban the dispensaries say nothing in Prop. 215 authorized brick-and-mortar stores. The attorneys said they question the legitimacy of claims that the dispensaries are nonprofit collectives, serving only people who have a medical need for cannabis.
“State laws don’t even remotely contemplate storefront dispensaries,” said John D. Higginbotham, a Best
Best & Krieger attorney who represents several cities in their fight to ban clinics. “This is not Grandma with cancer … these stores are facilitating recreational drug use.”
Further complicating the legal landscape: While California and other states have adopted legal use of medicinal marijuana, the federal government still classifies it as a dangerous drug with no legitimate purpose.
“What is often lost in the discussion is that marijuana use is still illegal under federal law,” said Jeff Dunn, another BB&K attorney who has litigated against dispensaries.
While states may create medical marijuana laws, “a state cannot legalize what the federal government has ruled illegal. This is about the complex interplay of federal law, state law and the city and county public safety authority,” Dunn said.
That last tactic has been effective, DeAguilera said.
Cities send letters to landlords warning them of fines or other action because they are renting to a business that operates in violation of federal law, or without proper permits. The landlords take care of the problem by evicting tenants.
Two dispensaries in Colton recently shut down as landlords faced $1,000-a-day fines.
DeAguilera said the legal reasoning is flawed and will be fought in court. “The landlord is not responsible. The leases do not authorize the providing of medical marijuana, it does not condone it; it is silent on that,” said DeAguilera, who represents one of the most recently closed dispensaries.
Cities also have turned to Sacramento to define city and county regulatory powers regarding the stores.
Gov. Jerry Brown recently signed AB 1300, which specifically gave cities and counties the right to regulate medical marijuana dispensaries, although he believed they already had that right. He vetoed a bill that would have set state standards and, Brown said, would have preempted local governments from taking action.
“A fundamental part of being a city is to protect public safety,” said Dunn, who is chairman of the California League of Cities ad hoc committee on medical marijuana. He said the local control is “of critical importance for cities and counties, and extends beyond medical marijuana issues.”
As of late June, the city of San Jacinto had assessed $639,000 in penalties against the Nature’s Serenity dispensary, which eventually was evicted and closed. Beaumont fined a dispensary $600,000, until narcotics investigators shut it down.
Store operators have pushed back by asking courts to throw out the municipal codes banning dispensaries, or at least to put those laws on hold so they can do business while litigating. “The cities are not without remedy to handle bad operators,” said attorney Roger Jon Diamond, who represents G3 Holistic Inc. in its legal action against the city of Highland, a case now before the state Fourth District Court of Appeal. “Those facilities can be handled by a nuisance action or criminal prosecution if the establishment is not obeying all the rules and regulations.”
The Highland case has a tentative decision that favors the city, as does a case from Riverside. Arguments are still to be heard in both cases. Commenting only on his case, Diamond said he remained confident he will prevail.
He said he believes the question — whether local governments can ban dispensaries — will ultimately go before the California Supreme Court. But Higginbotham said if the appellate court rulings remain uniformly in favor of cities, there may be no reason for the state high court to take up the matter.
Riverside County Assistant Sheriff Jerry Williams said about 105 dispensaries are in his county right now, compared with 35 last year. In addition, about 300 mobile dispensaries — vehicles — have been identified.
“Several of these dispensaries are owned by one person or the same group of people,” he said. “They sell to anybody with money. Basically these are just drug dealers.”
But it can take a lot of staff and about three months of investigation to gather enough evidence to seek charges alleging a clinic is violating the law, he said. Investigations are spurred by complaints over increased local crime and public marijuana smoking near a dispensary , he said.
Williams said some marijuana is raised locally, but “a great deal, literally tons of it, are coming from Mexico … and there is no question, if it is coming up from Mexico, it is cartel-driven.”
He said information is fostering a more skeptical view of the dispensaries. “We are seeing a change of attitude. … I think there is going to be a change. It won’t be happening overnight, but there will be a change.”
“State laws don’t even remotely contemplate storefront dispensaries. This is not Grandma with cancer … these stores are facilitating recreational drug use.” John D. Higginbotham, attorney who represents several cities in their fight to ban marijuana clinics
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