Medical marijuana: Jessica Corry, Bob Hoban on what's wrong with new Denver MMJ regs

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Yesterday's Denver City Council special committees meeting about medical marijuana, intended to bring Denver in line with state MMJ law, brought out advocates worried that new rules may outlaw Denver grows owned by entrepreneurs without a retail outlet in the city. And that's not all, according to attorneys Bob Hoban and Jessica Corry.

The attorneys outlined some specific areas of concern in a point-by-point format made available to Westword. Check them out below, then read a letter sent to special committees chair Charlie Brown emphasizing what they see as the most important issues on the table:


Under proposed language now under consideration (See Sec. 24-507 "Criteria for licensing; waiver of public hearings") the City would require the Licensing Director to "deny any application for a license that is not in full compliance with the CMMC, this Article XII, and any other applicable state or city law or regulation." This language does not afford the licensing director adequate discretion to consider extenuating circumstances some applicants face, and subjects the City to possible litigation for failure to recognize the rights of business owners under administrative law in cases where confusing or complicated ordinance language punitively impacts business owners.

Furthermore, the City has previously denied relief in the form of stays or delays in enforcement to MMCs denied licenses, arguing that such remedies are not available to the licensing department and may only come through other City departments or bodies, including the zoning department or the Board of Adjustment. Given, however, that in almost all cases, the City's MMC Code does not afford relief to MMCs found in violation of zoning, the Code does not adequately address extenuating circumstances that could justify such relief, expressly including those situations created outside the control of the applicant or any of its agents.


Under proposed changes, (See Sec. 39-50(c)22), landlords or property owners could be liable for a "Class 1 Public Nuisance" by leasing space to any Medical Marijuana Center deemed to be an "unlawful operation....without a license. Art. XI, Chapter 24, DRMC)." Given the complex legal environment facing the young medical marijuana industry, however, this language does not adequately address liability for landlords letting to MMCs presently -- or in the future -- who may challenge zoning and/or licensing denials, either through the City or outside litigation. Currently, MMCs engaged in appeals through the City may remain open, but the proposed language does not clarify as to whether such operations would remain lawful. Similarly, the language does not address the level of notice required to hold a landlord liable.


Hoban and Corry represent multiple clients now appealing preliminary licensing denials based on the City's current distance requirements (the City's Medical Marijuana Code requires a minimum of 1,000 feet between medical marijuana dispensaries). While the City has previously upheld at least one licensing denial where a City surveyor described his methodology as "common sense" and conceded that he was provided no instruction on starting or ending points or other standard techniques, the City's own history concerning other industries, including liquor stores, documents that a plain reading of the ordinance language could result in multiple common sense interpretations regarding how to properly measure between establishments. This ambiguity, when ignored by the City, subjects the City to accusations that it affords improper discretion to deny applications by its staff and officials.


Earlier this year, the City Council approved "Blue Print Denver," a comprehensive zoning code that permits residential building in zone districts previously restricted for industrial or commercial uses. When this change is read together with the City's medical marijuana code (See Sec. 24-508(b) "Prohibited locations" mandates that dispensaries cannot open in "any residential zone district as defined by the zoning code of the city, or in any other location where retail sales are prohibited by the zoning code or by any ordinance governing a planned unit development") the City's new policies could shut down dozens of MMCs previously in lawful operation.

While the City's current position is that MMCs who were properly zoned in industrial or retail districts prior to Blue Print's adoption can continue to operate, the policy is under attack. Shall City Council reverse course by refusing to permit grandfathering for such uses, the city could be subject to adverse litigation under a regulatory takings analysis. Under Colorado law, municipalities are limited in their ability to sever business rights for operations lawfully operating prior to passage of any moratorium or prohibition against specific industry, business, or use, thus subjecting the City's taxpayers to the prospect of being forced to fully compensate MMCs for business losses associated with being forced to shut down.


Under proposed language (See Sec. 24-510 "Licensing requirements -- optional premises cultivation licenses") an MMC would be denied the right to open or operate a grow operation in Denver if the MMC's retail storefront was not also located within the jurisdiction, requiring that the licensing director "shall issue optional premises cultivation (OPC) licenses only when the medical marijuana center or the medical marijuana-infused products manufacturing to which the cultivation is related is also located in Denver County and is owned in common with the optional premises cultivation operation as required by the CMMC."

Once again, the language does not articulate the City's position regarding MMCs already in operation prior to any adoption of the proposed changes. Given the current municipal patchwork of medical marijuana zoning and regulations, Denver is one of the only locations for many MMCs to operate an OPC. Shall the City remove such an opportunity, and as stated previously, many lawful operations could be forced out of business. In addition, vacancies and unemployment would certainly go up, while tax revenue would inevitably decline. Hoban and Corry encouraged Council members to work collaboratively with other municipalities, including neighboring Lakewood to encourage the centralization and oversight of growing, potentially decreasing the number of separate facilities used for growing, arguing that a regional approach would benefit law enforcement efforts and also allow medical marijuana growers to continue operating independently.

More from our Marijuana archive: "Jessica Corry on team of ten medical marijuana attorneys discussing MMJ's future."

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