Tahoe Wellness Cooperative in escrow for Bijou Center
February 19, 2018
After a nearly two-year legal battle, Tahoe Wellness Cooperative is in escrow to purchase the shopping center that houses the medical marijuana dispensary. But while one dispute appears to be put to bed, the other with the city of South Lake Tahoe continues.
TWC executive director Cody Bass told the Tribune last week that the dispute over the sale of the Bijou Center in South Lake Tahoe was settled before the new year, putting TWC back into escrow for the property that it originally entered into a purchase agreement for in March 2016.
As part of the settlement agreement with the center's owner Patricia Olson, Olson gave her written consent to allow the operation of the dispensary in the days leading up to the close of the sale — something she had previously withheld when TWC attempted to renew its permit at the end of 2016.
At the time, City Council would not accept TWC's long-term lease at Bijou Center as a form of consent, saying they needed a signature from Olson on a city form. The city denied TWC's permit renewal, so the medical marijuana dispensary sued the city.
Now-retired El Dorado County Judge Steven Bailey issued a stay, allowing TWC to continue operating without city interference or fines until the court determines whether the permit renewal is valid or not. A judgment could not be reached prior to Bailey's retirement last August, and a new judge will be reassigned the case.
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In November when California released its new state regulations and licensing system for cannabis, TWC began the process of applying for a Medicinal Microbusiness Temporary License from the California Bureau of Cannabis Control.
With landlord permission and the court-issued stay, Bass believed they were set. The state issued a temporary license on Dec. 31 — but on Jan. 5, the bureau sent a letter to TWC saying there was no local authorization from the city and the permit was invalid.
The dispensary temporarily closed its doors until it confirmed with the bureau that they were able to continue operating as a nonprofit cooperative, but could not get a state license as a microbusiness without local authorization.
The license was revoked after the bureau received a letter from South Lake Tahoe Police Chief Brian Uhler, the city's appointed bureau contact, stating, "[T]here are no dispensaries operating with a permit or license." Uhler noted that there is a "dispensary operating without a city permit and this dispensary has sued the city."
City Attorney Nira Doherty told the Tribune she spoke with bureau Chief Lori Ajax about the court-ordered stay following Uhler's letters.
Doherty said there are "many possibilities" which might lead to the city eventually granting local authorization.
"One of the most likely scenarios which might lead to commercial cannabis activities in South Lake Tahoe would be City Council lifting the current moratorium on all commercial marijuana activities and establishing a new ordinance which would allow for commercial cannabis uses," said Doherty.
The operation of nonprofit medical marijuana dispensaries is carved out of the current moratorium in place while the city works out regulations for recreational cannabis.
The state license denial, according to Bass, has put TWC in limbo.
"So what that did is put us in the position that we could still be open and serving our patients with the medicine we are producing on our own and the inventory that we had prior to the license being denied on Jan. 5, but it would be breaking the law to either deal with a non-licensee to get supply or for us to deal with a licensee to get a supply," explained Bass. "And in fact with a licensee they would be risking their license making a transaction with me."
As a result, the medical marijuana dispensary, which grows cannabis on property, is running out of edibles, tinctures and oils.
"That is the medicine for the sickest people," said Bass. "The people that can't smoke for health reasons or choose not to."
Bass said TWC is not giving up on obtaining a state license.
In a Feb. 5 letter to City Council, Olson requested that City Council "grant authorization" to Bass who has been a "good tenant" for over nine years.
"We have recently finalized the property transaction; I have full faith in Cody Bass that he will continue the spirit of the Bijou property as we once created over sixty year ago," writes Olson. "Cody has proven his ability to carry on this vision. This deal has provided me with the comfort that I desire to live through my final years with peace of mind."
Bass said TWC's petition proposing changes to the current medical marijuana ordinance — including giving dispensaries vested rights and the ability to conduct recreational sales — is going well. He is shooting to have it on the November ballot instead of June due to the higher voter turnout for general elections.
"We are going to begin levels of activism to get more awareness to how much the City Council is blocking our ability to supply our medicine," he explained.
"We're never going to give up. If it has to go to the ballot in November, that's what we'll do, but hopefully we don't have to go there. Maybe the city will come together and make us a settlement and we'll shred the signatures and everybody can be happy."
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