Medical marijuana: Dr. Eric Hatch's Dougco court case could challenge dispensary bans

Dr. Eric Hatch, the man behind Hatch Wellness Center in Highlands Ranch, is a chiropractor by trade. But a Douglas County court case in which he's involved could challenge the right of municipalities to ban medical marijuana dispensaries.

How? His attorney, Andrew Reid, explains.

"Last November, unincorporated Douglas County passed a referendum banning medical marijuana businesses," says Reid, who is also representing Kathleen Chippi in a lawsuit challenging Colorado's medical marijuana regulations. "At the time, there were three medical marijuana businesses in operation, including my client, Hatch Wellness Center" -- a facility that unquestionably goes beyond the simple provision of marijuana products. The other businesses impacted are S.E.C.A.M., LLC, a dispensary, and Mile High Medical Gardens, a grow facility.

Images from the Hatch Wellness Center website.
Images from the Hatch Wellness Center website.

According to Reid, the ordinance required that businesses have a state license -- "so while the licenses were pending, they left up in the air whether or not the referendum covered these three businesses." As such, "the county brought a lawsuit in February against these three businesses on behalf of the county commissioners. It was not an order to shut them down, but an order from the District Court of Douglas County as to whether these businesses were legal -- a declaratory judgment action."

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The businesses answered back with counterclaims of their own. Meanwhile, the state was preparing for the July 1 effective date for its MMJ legislation, and along the way, Reid says, "they sent letters to the various counties and municipalities that had enacted medical marijuana bans, letting them know they were going to deny the license applications on the basis that the counties had banned the distribution and sale of medical marijuana. And because the state said the licenses would be denied, Douglas County determined that as of July 1, these businesses would be illegal, because they were ineligible under state law to obtain a license due to the county ban."

Problem is, the question of whether the referendum applied to the three businesses in question still hadn't been resolved, making this determination premature, in Reid's view. "It was a circular argument," he allows. "The county wouldn't give them a permit because they were ineligible for a state license, and the state wouldn't give them a license because they were not legal under the county ban."

The county's lawsuit raises a number of questions, Reid says -- "whether or not these three businesses were effectively grandfathered in, and whether or not the ban was meant to cover existing businesses or if it was retrospective legislation, which would raise constitutional issues." If a court decides the businesses weren't banned by the referendum, this judgment would not necessarily impact Amendment 20, the measure that legalized medical marijuana in Colorado, although Reid says a court could choose to look at the legality of the ban as a whole if it wished to do so.

Medical marijuana: Dr. Eric Hatch's Dougco court case could challenge dispensary bans

Not that this is the only potential issue. "We thought Douglas County and the State of Colorado would hold off on shutting down these businesses until the court had an opportunity to issue an opinion," Reid acknowledges. "But on June 30, the day before the deadline, my client and the other parties received a visit from the commander of the South Metro Drug Task Force informing them that they would be arrested if they continued in business as of July 1. And that came as a shock to us. We'd been in communication with the county attorney's office and the task force. But in order to avoid arrest, my client, Dr. Hatch, and the other two businesses ceased operation in Douglas County," at least as far as medical marijuana is concerned.

The result was more circularity. We had the impression the state was going to hold off on the application pending the decision of Douglas County as to whether or not my client was covered in the county ban, or whether the county ban was even legal," Reid goes on. "But that arrangement was withdrawn once the businesses were shut down. And these businesses have suffered some severe losses as a result -- and they were servicing hundreds, if not thousands, of patients between the three of them. Those patients were left without access to medication and had to find other providers or do without."

What could happen next? "It depends on how the court decides it," Reid says. "If the court decides the businesses are grandfathered in, then no, the ban probably wouldn't be affected. But if the court decides the ban provisions interfere with the statewide program as envisioned by Amendment 20, it wouldn't strike down the medical marijuana program, but it would strike down those provisions that allow counties and municipalities to ban it. It would leave it to the state to regulate businesses as part of a statewide scheme."

A decision by the Douglas County District Court is pending. Page down to read the original lawsuit and the amended counterclaims. You can also access them by clicking here and here.  

DOUGLAS COUNTY BOARD OF COMMISSIONERS VS. S.E.C.A.M., LLC; MILE HIGH MEDICAL GARDENS, LLC; and HATCH WELLNE...
AMENDED COUNTERCLAIMS: DOUGLAS COUNTY BOARD OF COMMISSIONERS VS. S.E.C.A.M., LLC; MILE HIGH MEDICAL GARDENS...

More from our Marijuana archive: "Medical marijuana dispensary ban in Longmont calls into question property rights defense."


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