SOUTH LAKE TAHOE, Calif. — South Lake Tahoe will pursue a ban on medical marijuana dispensaries following direction from the City Council at a special meeting on Tuesday.

The Council is also set to approve regulations surrounding the cultivation of medical marijuana at an Aug. 19 meeting.

Three medical marijuana dispensaries — Patient to Patient Collective (also known as MJ Consultants), Tahoe Wellness Collective and City of Angels 2 — have opened during the past two years.

In November, the City Council enacted a moratorium on new medical marijuana dispensaries to allow staff to develop options regarding possible regulation. The City Council extended the moratorium to November 2010 in January and could extend the moratorium until November 2011.

City Attorney Patrick Enright presented the City Council with three options for moving forward at a special meeting on Tuesday: ban medical marijuana dispensaries outright, regulate them or wait until after the November election, when many marijuana-related activities would become legal if voters approve Proposition 19, the Regulate, Control and Tax Cannabis Act of 2010.

Proposition 215 and SB 420, which legalized medical

marijuana in California, do

not explicitly provide for storefront dispensaries, Enright said.

Mayor Kathay Lovell, Councilman Jerry Birdwell and Councilman Bruce Grego said they supported a ban on dispensaries Tuesday.

Birdwell said he didn't want to deny seriously ill patients access to medical marijuana, but said the people he has seen going into the collectives do not appear sick.

Grego contended that anyone with $50 could get a medical marijuana recommendation and said he also doubted whether customers at the collectives were truly ill.

“I think (the collectives are) poisoning the youth of our society,” Grego said.

The contention was disputed by Tahoe Wellness Collective employee Shelly Arnold, who said she is dealing with people who are very ill on a daily basis.

She asked the City Council to show compassion for those patients and said she would be “embarrassed” if the city denied access to medical marijuana by banning the dispensaries.

Potential City Council candidate Géorg May agreed. May said he wasn't in favor of the “good actors” getting medical marijuana recommendations, but said the city should not prevent terminally ill patients from receiving access to medical marijuana.

Councilman Bill Crawford opposed the ban, saying it is “entirely appropriate” for those with serious and deadly diseases to have access to medical marijuana.

“I cannot support a total ban on collectives; there is a need for collectives,” Crawford said.

He said alcohol and prescription medication abuse are greater threats to youth and a ban on medical marijuana dispensaries would likely cause the trade to go into neighborhoods.

Crawford questioned whether the city should just wait to make a decision on local regulation of dispensaries until the outcome of a court case surrounding the distribution of medical marijuana in Anaheim, Calif.

A ruling on the precedent-setting case is expected in the next 30 days, Enright said.

There has been more talk about crime centered around the collectives than evidence, Crawford added.

A burglar or burglars stole about 70 pounds of marijuana from Patient to Patient Collective during the early morning hours of Feb. 22, said Lt. David Stevenson during a phone interview on Tuesday. In an “unusual” move, the intruders also flooded the dispensary and damaged the property extensively, Stevenson said.

The police officer said narcotics officers have also reported burglaries of the homes of people associated with the collectives and the reselling of marijuana to the illicit market. Stevenson said he did not have details of those incidents on Tuesday, adding they often go unreported.

In a report to the City Council, Captain Martin Hewlett said it appears the operators of the collectives are making “significant profits” from the dispensaries, despite California's requirement that dispensaries be organized as nonprofit groups known as “collectives” or “cooperatives.”

City of Angels 2 owner Gino DiMatteo said dispensaries are not the issue, because they have complied with state requirements and the city's expectations.

“We're doing everything we're supposed to be doing,” DiMatteo said. “If the illegal activity is the problem, why punish us?”

DiMatteo said he collects a salary from the dispensary's operations, but noted he also pays taxes on the medical marijuana sold. He declined to say what his salary is or how much he pays in taxes.

The money collected at Tahoe Wellness Collective pays for rent, product, payroll and taxes, Arnold added.

“There isn't a lot left over; there isn't,” Arnold said.

She said the three collectives won't get shut down without a fight.

Despite reassurances from Enright, Hal Cole said he didn't favor pursuing a ban because of the city's issuance of business licenses to the collectives during the moratorium. He said he was uncomfortable with issuing business licenses to the collectives and then taking them away.

City staff are expected to develop the wording of the ban prior to a subsequent South Lake Tahoe Planning Commission meeting. The planning commission must review the ban and the City Council will need to make first and second readings of the ordinance prior to its enactment.