Medical marijuana update: Boulder dispensaries denied licenses can stay open until after hearing

Update: Last week, we reported that six cease-and-desist letters had been sent to dispensaries in Boulder after officials denied their license applications due to discrepancies in their applications -- and more rejections were expected. Now, however, the city has taken a step back, telling centers appealing the decision that they may remain open pending a quasi-judicial hearing about the closure order. Why the switch?

According to spokeswoman Sarah Huntley, assorted city attorneys differed about whether a shutdown "would have to wait until the person had a quasi-judicial hearing telling them to close, or if we could order them closed once their license has been denied."

In the end, "while we think we could probably have closed them right away, we have decided that we don't want to get into a legal argument into somebody's due-process rights," Huntley continues. "So we're essentially allowing the businesses that have appealed" -- all but one of the six -- " that they can stay open pending the quasi-judicial hearing."

Said hearings have not been scheduled thus far, in part because the city has to name what Huntley describes as "a fact finder" to oversee them. This individual could be someone in the city's employ or "an outside person," she adds.

The procedure, sketched out in the document on page two of this post, is a bit vague, but Huntley stresses that "we're trying to get this resolved as quickly as we can. We just want to make sure we're honoring everybody's due-process rights and going through the process in the most careful way possible. We want these businesses to succeed, as we do with any other commercial business. They just have to be in compliance with our codes and standards."

In the meantime, the license review of the 117 dispensaries in Boulder will continue; about half of them had been completed as of last Wednesday. "The only thing that will change is that if we deny a dispensary's license, they have the right to stay open until the quasi-judicial hearing," notes Huntley. "It won't change how rigorously we review the pending applications."

Look below for our previous coverage, including the aforementioned policy document.

Initial item, 9:52 a.m. March 16: For a relatively modest-sized community, Boulder has loads of medical-marijuana businesses -- by the city's count, at least 117 of them. But there could be fewer of them soon, due to discrepancies in their applications. Cease-and-desist letters have been sent to six businesses thus far, and more could follow according to City of Boulder spokeswoman Sarah Huntley.

As originally reported by the Boulder Daily Camera, the operations impacted thus far are High Grade Alternatives, 8th Street Care Center, Southwest Alternative Care, Timberline Herbal Clinic, Mountain Medicine Group and Fresh Baked Dispensary. And two more letters are likely to go out soon.

Why? Huntley declines to go into specifics, but she confirms that "one of the businesses was denied due to a zoning issue -- it didn't meet the 500-foot distance rule -- and the others were denied because of background-check results of some sort."

These violations can be cured, but the procedure isn't always simple.

"We do have an appeals process," Huntley points out; the rules are on view below. "In the case of background-check issues, we're talking to the businesses. And if, for example, the problem involves a general manager, and the owner asks, 'If I terminate the general manager, can I continue to stay open?,' that possibility exists. But if it's the owner that has an issue, the city has taken the position that the individual businesses would have to take a look at its ownership structure and likely submit a new application with new owners. That's because the application packet takes into account ownership in several different areas. It's not as simple as saying, 'This owner is no longer going to be affiliated with the business.'"

The review process got underway the first week of March, Huntley notes, and thus far, sixty of the 117 applications have been reviewed -- meaning that the rejection rate, counting the two letters that have yet to be sent, is north of 10 percent. Moreover, there's no guarantee that the fifty-plus dispensaries cleared in terms of background checks and zoning regulations are free and clear. "The review process takes many different steps," Huntley says, and some of them may still be pending for the first batch of center applications analyzed. Indeed, just one license has been issued to date.

Considering that the city is just halfway through the application review, is a major disruption of the medical marijuana industry in Boulder possible? Huntley doubts it. "The number so far suggests we're talking about a handful here and there in the grand scheme of things." And while "this is obviously a new process for everyone, and we're learning as we go, we're working very closely with businesses to help them be successful."

Page down to see a document outlining the appeals process for medical marijuana business applications have been denied:

Boulder Appeals Process for Denial of Medical Marijuana Business Applications:

More from our Marijuana archive: "Medical marijuana ordinance in Boulder: Thoughtful regulation or war on mom-and-pop dispensaries?"

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