Changes to SLT medical marijuana ordinance could be put to a vote — and allow recreational sales
November 3, 2017
The attorney for South Lake Tahoe's only medical marijuana dispensary has filed a petition seeking to get a public vote on a slew of changes to the city ordinance governing his client's business.
"This measure will fix legal deficiencies in the City of South Lake Tahoe's medical marijuana dispensary ordinance pertaining to the rights of established operations and bring the ordinance into alignment with state laws and regulations governing medical marijuana businesses," reads the Notice of Intent to Circulate Petition filed by attorney James Anthony on Oct 27.
Anthony, a lawyer and political strategist in California medical cannabis, permitting, land use and local government, is representing Tahoe Wellness Cooperative's executive director Cody Bass in a legal battle against the city of South Lake Tahoe over the validity of a business license renewal.
The issue with the license began when the co-op's landlords at Bijou Center, nonagenarian Patricia Olson and her son Patrick, refused to give a signature of consent on a city form for the business permit renewal — something they had done twice in the past four years.
Consequently, in a quasi-judicial hearing last December, City Council unanimously decided that the permit application was incomplete and that the lease agreement — which Bass has the option to renew for two five-year terms — was not an acceptable form of consent. The council's decision was based on advisement from city attorney Nira Doherty who said the language of the city code requires consent be given on the actual city form.
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The situation is further complicated by the fact that before refusing to sign the business license renewal form, Olson entered into an option-to-purchase agreement with Bass for the entire Bijou Center in March 2016. But for reasons that have not been publicized, Olson refused to go through with the sale and unsuccessfully attempted to evict Tahoe Wellness Cooperative. Bass sued for breach of contract.
Olson then defaulted on the mortgage for the Bijou Center. US Bank now holds the note for the property, which was set to be auctioned off last January. However, Olson filed for bankruptcy, halting the process. Her chapter 13 bankruptcy filing shows 10 creditors including US Bank, which claimed $775,337.
The case was ultimately dismissed in bankruptcy court, but a stay was issued and Olson's attorney filed documents indicating their intent to appeal.
The most recent court filing in the matter was a motion by Olson's attorney, Kevin Darby, removing himself as the attorney of record. Darby's office confirmed that they no longer represent Olson.
It is unclear who is representing Olson — or if she has any legal representation at the moment.
Bass also took the city's decision to deny his permit renewal to court. El Dorado County Judge Steven Bailey was poised to give a ruling on the case in August.
"…[I]t's patently unreasonable in the Court's mind that this lease doesn't fit all of the requirements that the City needs to determine a valid consent by the landlord," said Bailey in court on Aug. 18.
However, less than a week later, Bailey said he hadn't "decided what the decision is going to be."
Prior to deliberation, Bailey asked if the parties would agree to a five-day objection period, rather than the standard ten-day, due to his upcoming retirement. Anthony agreed, but the city did not. Bailey could not issue a verdict, and a new judge will now take on the case.
Doherty did not respond to inquiries from the Tribune.
Meanwhile, Bass is being charged with tax evasion, according to a criminal complaint filed with the El Dorado County Superior Court. Back in 2015, El Dorado County Sheriff's Office, along with agents from the state's Franchise Tax Agency, Board of Equalization and Department of Insurance, executed a search warrant at Tahoe Wellness Cooperative.
"There is no basis to claim that there were any criminal tax violations here, but we haven't seen what those charges are based on and until we do, it wouldn't be appropriate to comment further," said Henry Wykowski, another of Bass' attorneys.
Amid all of this, Anthony recommended Bass and Tahoe Wellness Cooperative "exercise their Constitutional right of direct democracy to rewrite that ordinance."
The proposed changes to the medical marijuana ordinance give medical marijuana dispensaries vested rights, allow them to cultivate marijuana and operate a distribution center within any industrial zone, provide delivery services and conduct adult use (recreational) marijuana sales in accordance with state law.
Among other changes, the rewritten ordinance states that a valid lease is sufficient to show consent from a landlord and redacts the portion of the existing ordinance that says a permit becomes null and void should an operation relocate. Other provisions allow for more leeway in permit renewal.
"They are a business just like any other legal business in California and entitled to the full protection of their property rights," said Anthony. "The initiative just makes all that clear: That you cannot close Tahoe Wellness or any other legal business without proving that it's an incurable nuisance. You have to recognize its standing as a vested right and business."
To put these changes to a public vote, the petition needs a minimum of 10 percent of the South Lake Tahoe voters from the last reported registrations.
According to the El Dorado County Elections Department, the last reported registration was 10,353 voters. This means they would need at least 1,036 valid signatures from registered voters — not just residents — in South Lake Tahoe. The signatures are crosschecked with the voter database and validated by the elections department.
If this process sounds familiar, it's because another petition for a ballot measure is currently circulating in South Lake Tahoe.
Just four days prior to the medical marijuana ordinance petition, two South Lake Tahoe residents notified the city of their intent to put changes to the vacation home rental (VHR) ordinance to a vote. The initiative seeks to prohibit VHRs from any residential zone within the city of South Lake Tahoe, with a few exceptions.
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