Tahoe Wellness Co-op, city of South Lake Tahoe head to court over license | TahoeDailyTribune.com

Tahoe Wellness Co-op, city of South Lake Tahoe head to court over license

Claire Cudahy
Tahoe Wellness Cooperative is still open seven days a week from 9 a.m. to 9 p.m.
Claire Cudahy / Tahoe Daily Tribune |

South Lake Tahoe’s last remaining medical marijuana dispensary has been operating without a business license since an appeal was denied by City Council on Dec. 13 — and racking up $1,000 a day fines for doing so. Now, Tahoe Wellness Cooperative is fighting back in court against the city’s decision.

On Dec. 21, Tahoe Wellness Cooperative and its executive director Cody Bass filed an ex-parte application for stay in regards to the City Council’s decision to deny renewal of the dispensary’s operating permit.

Similar to the appeal made to council on Dec. 13 in a quasi-judicial hearing, Bass’ attorney James Anthony asked the court to allow the business to continue operating — and for the fines to stop — while a dispute with the co-op’s landlord at Bijou Center, Patricia Olson, is resolved in court.

The issue with Tahoe Wellness Cooperative’s license began when Olson refused to give her signature of consent on a city form for the business permit renewal — something she has done twice in the past four years.

Consequently, City Council unanimously decided that the permit application was incomplete, and would not accept the signed lease agreement — which does not end until Dec. 2017 — as consent. The council’s decision was based on the language of the city code, which states consent must be given on the actual city form.

The situation is further complicated by the fact that Olson entered into a purchase agreement with Bass for the entire Bijou Center in March, but for reasons that have not been publicized, refused to go through with the sale. Bass is now suing for breach of contract, and a Feb. 6 trial date will determine if Bass is the rightful owner of the shopping center.

Judge Steven Bailey presided over the hearing on Dec. 21, and stated several times that he was troubled by Olson’s actions and how they had ultimately dragged the city into the middle of this situation.

“I think going in and closing the dispensary, whether you like it or not — and I don’t want to suggest for one second that I’m a big supporter of marijuana, I think in many ways it’s a harmful drug — but at the same time, I’m not prepared to see property owners play what appears to the court to be a game,” stated Bailey.

“When they entered into a lease that was five years at the minimum and maybe as long as 15 years at a maximum, and in the middle of that to suddenly come in and say, ‘he doesn’t have permission.’ That is just unconscionable.”

“It is very difficult for the court to conclude that there isn’t unclean hands on the right of the property owner, particularly when this matter is in the height of litigation over who is actually the rightful owner of the property,” added Bailey.

Ultimately Bailey decided to grant a stay, which halts the issuance of fines until the court determines whether or not the lease should be considered consent from the landlord in place of the signature on the city form.

A Jan. 10 scheduling date was set to determine when the hearing for this would take place.

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