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O.C.’s disjointed approach to pot: Anaheim says ‘no,’ Costa Mesa and Santa Ana say ‘yes’

| Feb 9, 2015 | Articles, News

h/t OC Register

by Art Marroquin, Jordan Graham, and Alejandra Molina

Tony Jalali believes medical marijuana should be accessible. Still, he is evicting a small dispensary in an office complex under orders from Anaheim officials.

Meanwhile, in Costa Mesa, Joyce Weitzberg is hoping to reopen her cannabis collective in a town where leaders have reversed course and are now taking steps to regulate and tax marijuana sales.

Between those cities is Santa Ana, where Cypress Hill rapper “B-Real” last week won a lottery that puts him on a path to legally distribute medical marijuana in the city.

Dazed and confused? There’s reason for that. Orange County communities are taking dramatically differing stands to deal with the proliferation of medicinal pot shops – nearly 19 years after voters approved a statewide measure legalizing medical marijuana.

“I think that discrepancy comes from a misunderstanding on one side, and more tolerance on the other,” said Steele Smith III, director of the Orange County Collective Alliance, an advocacy group for medical marijuana dispensaries in Orange County.

“On one hand, Anaheim has heavy-handed and egregious laws that will be detrimental to patients,” Smith said. “On the other, you’re seeking a progressive attitude for safe access and eliminating cannabis prohibition.”

ANAHEIM’S ‘GAME OF WHACK-A-MOLE’

Jalali’s case illustrates the costs and complexities of Anaheim’s 40 dispensary-related lawsuits in the last eight years.

Three years ago, the federal government and Anaheim each filed lawsuits against Jalali for leasing space to a medical marijuana dispensary. The dispensary subsequently closed because of the suits.

But a year later, a judge dismissed the federal government’s case. Still, Anaheim pushed ahead with its suit against Jalali, a software engineer.

In the meantime, another dispensary, Anaheim Holistic Care, leased an office eight months ago on the second floor of Jalali’s building, which also houses an insurance office, a dentist’s office and other businesses at Ball Road and Magnolia Avenue.

Last month, a Superior Court judge ruled that Jalali has to shut down Anaheim Holistic Care because Anaheim has the right to enforce its prohibition on dispensaries. His attorneys are appealing.

Jalali has since issued a 30-day eviction notice to the dispensary, which remains open. A hearing is scheduled for later this month to determine whether Jalali is in contempt of court for failing to immediately close the pot shop.

“As a property owner, I should be able to rent an office to anybody, but the city is preventing me from providing a safe haven for people who need medical marijuana,” Jalali said.

Since 2012, Anaheim city officials have paid $602,612 to the law firm of Best Best & Krieger to defend the city’s ban on dispensaries. Last week, the City Council adopted a law allowing the city to file civil and criminal charges against landlords such as Jalali who rent space to medical marijuana dispensaries.

“We are literally playing a game of whack-a-mole with businesses that know they’re operating illegally,” said Anaheim Councilwoman Kris Murray, who suggested the aggressive stance in fall.

“We are not doing anything to hamper a patient’s ability to use marijuana for medicinal purposes,” Murray said. “We’re just holding those accountable who willfully violate the city’s law.”

Anaheim, which has its own water and power utility, cuts off dispensaries from those services. Some of the businesses move elsewhere, but a handful of storekeepers are staying open by using generators or car batteries.

The risky practice has sparked at least three fires, city officials said. In October, firefighters rescued a dispensary worker overcome by carbon monoxide fumes from an illegally rigged generator.

Of the 179 pot shops known to have operated in Anaheim, 16 remain open. Medical marijuana patient Marla James of Anaheim said the closures have forced her to purchase the drug from dealers selling on the streets and at cheap motels near Disneyland.

“What you’ve done is create a monster, you created a black market,” James told the City Council. “We do not like going underground to get our pot, but you’ve given us no choice.”

Anaheim Councilwoman Lucille Kring said she was sympathetic to James and others who need marijuana to relieve pain. At Kring’s request, the City Council will ask state lawmakers to limit the sale of medical marijuana to retail pharmacies, rather than at collectives.

“I think that there has to be a way that we can be compassionate and help the people who truly need this,” Kring said.

SANTA ANA BEGINS SHOP PERMIT PROCESS

The luck of the draw will pave the way for rapper Louis “B-Real” Freese and 19 others to open medical marijuana collectives in Santa Ana later this year.

“We’ve been at the forefront of the activism for pro-legalization for many years, so this is a unique opportunity for us,” said Freese, who plans to name his collective Dr. Greenthumb after a 1990s marijuana-themed song. “We’re just glad we’ve been selected.”

On Thursday, 20 winners were randomly drawn. The city received more than 630 applications, and numerous applicants were placed on a waiting list. The lottery came after Santa Ana voters approved a measure in November to legalize and tax medical marijuana shops, limiting them to two industrial zones.

The winners will be vetted by the Santa Ana Police Department, which will have 60 days to review the applicants’ backgrounds.

The collectives will not be allowed to cultivate cannabis in Santa Ana, and they must pay the city a 5 percent tax on gross receipts. The City Council may increase that gross receipts tax rate in the future, not to exceed the rate of 10 percent.

Attorney Randall Longwith, representing some of the applicants, said other Orange County cities may consider looking at Santa Ana as a model.

“It’s like building a better mousetrap,” said Longwith, who is attempting to place the dispensary issue on the ballots of about a dozen cities countywide.

COSTA M ESA WEIGHS OPTIONS

Weitzberg, the Costa Mesa woman now hoping to reopen a cannabis collective in town, opened her first cannabis dispensary in late 2010. She said she paid sales taxes, followed state law and focused on the needs of her patients.

But after requests from city officials to shutter dispensaries, the U.S. Department of Justice closed down her shop three years ago – along with 26 other pot shops across town.

“There were a lot of collectives operating without patients’ best interests in mind,” Wetizberg said. “Things were not OK at the time.”

Now, Costa Mesa staffers have completed a first draft of a possible law that, if approved by the council, would aim to lure back reputable dispensaries. Some City Council members said the push is motivated by compassion for cannabis patients and a fear of ballot initiatives forcing the issue.

A pair of petitions gained enough signatures in October to guarantee city voters will have a direct say next year on whether collectives should come back to town.

Ahead of that, the Costa Mesa City Council might consider as early as April an ordinance that would regulate, tax and allow cannabis dispensaries to operate in three industrial zones. If approved on that schedule, the new collectives could open by May.

“If it’s going to happen anyway, I want to do it the right way,” said Councilman Gary Monahan, who helped write the draft. “It could be the difference between having liquor licenses and selling bootleg.”

But some politicians and advocates said they fear that a rushed ordinance could encourage poorly run rogue dispensaries to return to Costa Mesa. With a recent federal action to defund enforcement of pot laws, and without a state regulating body to empower cities, Costa Mesa might lack the capabilities to once again drive those shops away.

Councilman Jim Righeimer suggested waiting until November 2016, when the Costa Mesa measures will be on the ballot – a time he also believes the issue of legalizing recreational marijuana statewide will be before voters. That could force California to create a cannabis equivalent of the state’s Department of Alcoholic Beverage Control.

Sue Lester, a Costa Mesa resident who shuttered her local cannabis collective in 2011, expressed the views of many, saying she wants medical marijuana legalized, but isn’t sure about the right approach.

Rush to write a law, she said, and you encourage bad operators. Wait, and you prevent sick people from accessing their medicine.

“I want it to be done correctly, both as a resident and a medical marijuana advocate,” Lester said. “They’re trying to hit a moving target, and they are not going to get it (correct), right out of the gate. I have yet to see that.”

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