Medical marijuana: Jessica Corry on suit that could make Denver liable for MMJ shutdowns

Following reports about proposals that could close 137 of 150 medical marijuana grows, a compromise measure passed through the Denver City Council special issues committee -- although it's unclear how many operations might be shuttered under the provision. Moreover, attorney Jessica Corry says a lawsuit she's handling could make new rules very costly.

Corry lays out the case and it's possible repercussions in the following e-mail Q&A:

Westword: Could you describe the case? Who are the parties involved? And what are the main issues the dispute raises?

Jessica Corry: While several lawsuits have already been filed by caregivers and patients, including many of our clients, seeking to challenge the new medical marijuana state and local regulations, this case presents facts very favorable to our client that have been absent in most other cases. As a result, we're cautiously optimistic that this case could have a positive impact on how courts view the relationship between Amendment 20's constitutional rights for medical marijuana rights and limits to how local governments can pick and choose who can operate in their jurisdictions.

At the core of this case, here's what we've got: Should the government be allowed to collect a business's tax dollars and permit its ability to operate, only to then turn around and shut the business down? The courts have almost universally said this is impermissible and that in such cases, the impacted property owner must be fully compensated for all business losses. Of course, we're talking about medical marijuana here, one of the most politically contentious policy areas in the nation today. While we firmly believe the facts and land use case law are on our side, we also realize we've got a tough battle ahead.

In addition, we're also challenging the City's administrative review process. We have evidence that the city has failed to properly train its employees with regard to enforcing Denver's medical marijuana requirements, and we also argue that the city failed to properly review our client's application in compliance with Colorado's administrative law requirements.

Our client is a small caregiving operation in a formerly blighted area of East Denver, otherwise surrounded by commercial operations and just adjacent to a lot that is filled with discarded tires and semi-trailers. Our client was in business more than a month before the City Council passed 2010's Ordinance 39, including its requirement that dispensaries must have submitted a sales tax application by December 15, 2009 to be grandfathered in from new requirements, including a 1,000 foot requirement between two dispensaries. The city maintains that our client falls just short of 1,000 feet from the nearest dispensary, but our surveyor shows that he's actually over 1,000 feet.

Despite the fact that our client began paying taxes in November, had complied with all other state, local, and federal tax requirements, and had complied with all zoning known at the time he opened shop, the City is sticking hard and fast to its December 15th deadline. Had Ordinance 39 not included this requirement, he would still have had several days to get his sales tax application in without being considered late.

It's incredibly frustrating to see the city spends thousands in taxpayer dollars in its fight to force our client out of business. On the other hand, what makes this case so meaningful as an attorney is that the dispensary's owner, Michael, is the kind of caregiver the city should dream of attracting to this industry. His mom, a terminally ill cancer patient, testified at our last hearing as to how, by introducing her to edible marijuana as an alternative to highly addictive narcotic painkillers, he has radically improved her outlook, health, and overall quality of life. This is the guy who hired not one, but two, law firms to make sure he complied with industry rules. He had several meetings with his accountant to make sure he got all of his bases covered as far as taxes. And he's not some Wal-Mart dispensary, funneling patients in and out the door. Rather, his 75 patients, who include several AIDS patients, are like family to him and he takes his role in their lives very seriously.

WW: Why does this case pertain to the subjects being raised by the Denver City Council? Would it qualify as a precedent?

JC: Council members still have an opportunity to support a proposal by Charlie Brown and Chris Nevitt that would remove this December 15th requirement. This will be tough given vocal opposition of a few committee members, but we're going to continue to try to provide a voice of reason in all of this. Even if the bill makes it out of committee without striking the December 15th requirement, however, we're hopeful that we will find a council open to resurrecting such language at the bill's public comment session [scheduled for February 14].

Some of the other proposed amendments seek to do the opposite and actually add more zoning and licensing requirements that would be imposed retroactively. More businesses could be unlawfully shut down as a result.

Overall, as the council considers several amendments to Ordinance 39, including language that could shut down grow operations currently abiding by all local and state rules, we're hopeful that our lawsuit will help open eyes to the fact that current and future attempts to retroactively shutter businesses through additional licensing or zoning requirements could force the city to cough up significant taxpayer funds to make the impacted businesses whole. In these tough economic times, taxpayers shouldn't have to foot the bill for the decision by elected officials to choose emotion over their obligations to uphold the rights of their constituents.

Regarding whether this case could set precedent, that's not our goal here. Rather, we seek only to have the Court follow a lengthy history of Colorado case law that demands that government not punish lawful businesses by imposing new regulations in a punitive way.

WW: What is the current status of the case? How quickly do you expect a court to rule on your arguments?

JC: We are moving as quickly as possible. Our client was forced to shut down on December 31st after he'd exhausted all of his appeals through the city. We immediately filed suit and hope to either settle with the city or come to some sort of favorable resolution before the state moratorium on opening new medical marijuana businesses is lifted in July. Certainly, we anticipate that his case could carry over long after this summer, especially if we seek economic damages, but the key goal remains: get the business up and running again so it can return to serving patients, developing innovative strains and treatment approaches, and start generating tax revenue for a city that says its badly in need of funds.

WW: If the court rules as you hope in your case, could the Denver City Council be opening up the city to large expenses and liabilities?

JC: We're early in the case, so at this point there are still a lot of unknown variables. This being said, if the Court rules that the city acted unlawfully when it enforced regulatory requirements retroactively, this could mean victory not only for my firm's client, but also for at least a few dozen other dispensaries that have been shut down under Ordinance 39 for similar reasons.

Most importantly, in the bigger picture, this battle is about protecting the legal rights of all of us, regardless of our views on medical marijuana. There is nothing in our state or federal Constitution that requires us, as citizens, to be mind readers. A government authorized to strip a business of property rights over alleged failures to effectively anticipate future mandates is a government that we should all feel obligated to restrain. The Denver City Council has a chance to do the right thing here. It can and should lift the December 15th sales tax application requirement and resist the temptation to impose additional retroactive zoning and licensing requirements now or in the future.

More from our Marijuana archive: "Medical marijuana: Jessica Corry, Bob Hoban on what's wrong with new Denver MMJ regs."