Local resident Robert Vaca shows his medical cards after receiving medical marijuana from Your Health and Wellness Center, a medical marijuana dispensary on First Street, Monday evening.
The logo of MediLeaf, a medical marijuana dispensary that opened at 1321 First St. less than a month after the City Council effectively voted against giving the store a permit.
A medical marijuana dispensary that opened without permission in north Gilroy will continue to sell cannabis until at least Tuesday despite a "cease and desist" order from the city. The situation has city officials heated, residents curious, and at least one councilman expecting an expensive lawsuit.
Gilroy's City Council will meet in closed session Monday evening to discuss the matter and to give direction to city staff on what their next steps should be.
Until then, "It would irresponsible for us to deny access to medicine for the 165 Gilroy residents who have already registered with the MediLeaf Collective," dispensary ombudsman Eric Madigan of Toluca Lake wrote in an e-mail Thursday morning. "So we will continue to operate as we work out the details ..."
Sgt. Kurt Ashley served the order to UR Health and Wellness Center, run by MediLeaf, about 4:45 p.m. Wednesday, according to police - two days after the medical marijuana dispensary opened without a license and to the surprise of city leaders. The order called on MediLeaf to immediately stop selling marijuana and to cease operating a medical marijuana dispensary in Gilroy.
If not, "... the City will be free to take any and all legal actions necessary to enforce your compliance with the law," the order read.
MediLeaf opened at 1321-B First St. despite the City Council rejecting an ordinance 4-3 last month that would have allowed the dispensary.
The order cites MediLeaf for operating without a business license, operating in a district that was not zoned for a dispensary and violating federal law. It was signed by City Administrator Tom Haglund, City Attorney Linda Callon and Development Center Manager Kristi Abrams.
The document was addressed to MediLeaf directors Neil Forrest and Batzi Kuburovich and to San Jose residents Mike and Kulwinder Kaur Atkar, who own the shopping center that houses the dispensary. Before the order was served, Mike Atkar said that the licensing issues did not involve him - just the city and the dispensary.
MediLeaf representatives said the city code makes allowances for nonprofits to operate without a license, but city officials say that's not true.
MediLeaf is a nonprofit mutual benefit corporation that was registered with the secretary of state March 29. Like many dispensaries, it follows a closed-circuit collective model, in which marijuana only can be acquired and grown by members. Its articles of incorporation dictate that its directors will be paid $10,000 per month.
Attorney James Anthony, who said he was part of a "mercenary band of lawyers" representing the dispensary, said attorneys would be glad to speak with city officials about the matter.
"If not, we'll see them in court," he said.
Gilroy's position is similar to a situation recently seen in Claremont, Haglund said. In that case, a state appellate court ruled in the city's favor after a dispensary chose to operate without a business license.
However, Councilman Perry Woodward, who supported the ordinance that would have allowed MediLeaf, said the Claremont case was decided in a different appellate district, and a judge could decide differently in this instance.
"It's so darn frustrating that the council didn't have the foresight to see this would be the immediate outcome of what they did," Woodward said.
He anticipated that the city may have to spend hundreds of thousands of dollars in legal fees to fight MediLeaf in court.
"They're setting this thing up," he said of MediLeaf. "They had to know they're getting a cease and desist (order)."
Medical marijuana facilities have operated in other communities without causing an uproar, he said.
While the city and dispensary fought it out, scores of people showed up to the non-descript dispensary this week to become members or to learn more about MediLeaf's services. Several of them spoke of ailments, such as anxiety and pain surrounding amputated limbs.
Many of those people, such as Gilroyan Robert Vaca - who suffers from back spasms - said the local dispensary would save them a trip to Santa Cruz or Oakland.
"The medicine is just so much better than what you get from the doctor," he said, referencing other painkillers, such as Vicodin.
Vaca said he does not have to increase dosages with cannabis as he does with other painkillers and that the dispensary staff treated him with respect.
Kelley-Jo Wendlandt, a MediLeaf member who volunteers at the dispensary, said she has undergone four back surgeries for spinal disorders and a botched operation. As a result, she has used medical marijuana for nine years and has traveled to dispensaries as far as Oakland.
"They're doing everything right," she said of MediLeaf. "There have been a couple of places in Oakland that I didn't think were right at all."
Neighboring businesses this week had mixed reviews. Staff at Togo's Eatery and Rock Zone both said Monday that they were happy to see the dispensary open, touting its medicinal value.
However, Anthony Figueroa, owner of Antdawg's Universal Strength Headquarters, a martial arts studio adjacent to the dispensary, said the dispensary should move near other pharmacies. Both he and his brother, Angel, who co-owns the business, said several children belong to their martial arts studio, and the brothers thought the dispensary was a bad fit. The Figueroas also complained of particularly young-looking people walking into the dispensary. They would likely move their business elsewhere if MediLeaf stays in the shopping center, they said.
Eric Smith, who heads South Valley Community Church - just down the street from the dispensary - said several community members fought an adult book store in Gilroy, but the city allowed it to exist because it was legal.
Although many residents who showed up at the dispensary this week said they patronized the cooperative solely to ameliorate medical ailments, a few teenagers - at least one of whom claimed to have no medical problems at all - were scoping out the store.
As Rock Zone manager Cassie Lopez explained the differences between medical cannabis and street-bought marijuana, 16-year-old Jeremiah Loyd proclaimed, "It's the same thing, though - bud's bud."
Loyd had previously entered the front lobby of the dispensary, and he was flipping through a copy of a magazine and looking at a picture of an EZ Grow Mushroom Kit as he stood in Rock Zone. Lopez kicked him out of the store following his comment.
MediLeaf staff have maintained that only adults with a doctors note will be able to apply for membership at the cooperative.
Gilroy-based Enterprise Protective Services is providing security for the clinic, and sales director Miriam Vega said staff will aim to prevent loitering in the parking lot and prevent problems with any protesters who might show up. Security measures included 16 cameras and patrol units, she and Kuburovich said.
Gilroy police have not responded to any disturbances in the shopping center since the dispensary opened, Sgt. Jim Gillio said.
Councilman Craig Gartman took note of the security and the politeness of staff when he stopped by the dispensary this week to get a look.
"It looks like a pretty clean, well-organized operation from what I saw," Gartman said.
Councilman Bob Dillon, on the other hand, was upset with the dispensary operators. He said his immediate reaction would have been to have the city place a lock on the door.
Haglund said that any construction done without a building permit also could constitute a safety issue. MediLeaf has not been issued any building permits for their project, yet the Figueroas say that construction had been going on in the building for two to three weeks before it opened.
Kuburovich would not comment on matters related to the dispensary this week, indicating through a gesture of zipping his lips that he was keeping silent for legal reasons.
Councilman Dion Bracco also expressed ire with MediLeaf for opening without a permit, and seemed further solidified in his opposition.
"I'm glad we didn't allow them in," Bracco said. "This shows what kind of people they are."
He said he received 20 to 30 e-mails from people who were opposed to the dispensary this week, while only one woman e-mailed him in support.
"People are ticked," he said. "People are hot right now."
Although Monday's discussion is slated to be in closed session, Gillio noted that there will be a public comment session beforehand, and members of the public are encouraged to attend.
Gartman said it would be interesting to hear city staff's interpretation of the municipal code regarding business licenses and federal regulations.
"I guess that's the $64,000 question - do you need a business license if you're a nonprofit?" Gartman said.
What people are saying
"People are using fear and deceit to discredit what's being done."
- Batzi Kuburovich, co-director of UR Health and Wellness Center, a medical marijuana dispensary run by MediLeaf
"This is clearly not coming in the front door or openly or honestly." - Cat Tucker, Gilroy councilwoman
"The medicine is just so much better than what you get from the doctor."
- Robert Vaca, Gilroyan and collective member
"It's the same thing, though - bud's bud."
- Jeremiah Loyd, 16
"It's so darn frustrating that the council didn't have the foresight to see this would be the immediate outcome of what they did."
- Perry Woodward, Gilroy councilman
"I'm glad we didn't allow them in. This shows what kind of people they are."
- Dion Bracco, Gilroy councilman
Is medical marijuana legal?
Federal
Federal law prohibits cannabis - along with LSD and exstasy, among others - as a Schedule One drug, meaning it has "a high potential for abuse (and) no currently accepted medical use in treatment in the United States." However, U.S. Attorney General Eric Holder, at the behest of President Barack Obama, said last month that the federal government does not plan to prosecute people selling medical marijuana in states where it is allowed by state law.
State
State Proposition 215 permits local jurisdictions to regulate whether medical marijuana dispensaries can open in their localities. Accordingly, last month the Second District Court of Appeals upheld a City of Claremont ban on dispensaries, a decision which means cities can bar citizens from setting up dispensaries. In addition, the Los Angeles County District Attorney announced last month that prosecutors would bring cases against hundreds of "over the counter" collectives in the area that exchange marijuana for cash.
City
City code, sections 13.2, 13.44(a), 53.20 and 53.20, require that all businesses be in compliance with federal, state and local laws, effectively prohibiting a dispensary from opening since it would be in conflict with federal law. In addition, all businesses - for profit or nonprofit - must secure a business license prior to opening and prior to remodeling. The City Council defeated an ordinance that would have created guidelines to allow a dispensary to operate in Gilroy in a 4-3 vote - with councilmen Perry Woodward, Peter Arellano and Craig Gartman dissenting.
Sources: City of Gilroy, U. S. Drug Enforcement Administration
Jonathan Partridge Jonathan Partridge covers City Hall for The Dispatch. Reach him at 847-7109 or e-mail him at jpartridge@svnewspapers.com.
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