LAWSUIT FEARS SHAPE MARIJUANA DISCUSSION IN ORCHARD CITY

The ultimate justification for action by government is protection of
the public "health, safety, and welfare."

But when it comes to the current issue of retail businesses that sell
marijuana, local government decisions are being driven by fear - the
fear of getting sued.

During a July 7 work session, the Orchard City Town Board discussed
the town's medical marijuana issue and the fear of being sued was
uppermost in trustees' deliberation. In spite of a new state law that
gives local jurisdictions complete authority in regulating, or even
banning, new and existing retail pot shops, the town trustees are
confused as how to use their authority, and they are fearful of
becoming the first "test case" for the new state law.

And, Orchard City isn't alone. Other towns with existing marijuana
operations may also be feeling the heat. Local governments, including
the county, have complained that they don't have the legislative
guidance they need to create guaranteed, liability-free rules on
retail marijuana sales.

"Everyone is sitting back and waiting for that first shoe to drop,"
said Mayor Don Suppes at the July 7 work session. He was talking
about the first local community that might get hit with a mega
lawsuit for shutting a medical marijuana shop down. "This is an issue
no one wants to touch. Everyone is scared of this issue," he added.

Even though some trustees and a lot of people in town want to ban
retail marijuana sales, attorney Larry Beckner has advised Orchard
City otherwise. Beckner, Suppes said, has advised that the town may
ban any new marijuana sellers, but that "it would be in the town's
best interest" that an existing one be allowed to remain.

The reason is that the big money behind full legalization of
marijuana would rather make law in its favor by getting a court
judgment against some small, local government and not risk taking on
the state in a legal fight.

The situation puts Orchard City's town board in a bad position. On
one hand, their lawyer has his legal opinion. On the other hand is
the public, and trustees have good reason for their strong sense that
townsfolk don't want retail marijuana sales there, and that they
would like to see the existing one banned.

Two trustees, Marsha Thomas and Jimmie Boyd, say their constituent
contacts are running strongly against allowing retail marijuana
selling operations (also known as "dispensaries," "medical marijuana
centers," or "MMCs") in the town.

And, even though the town board has legal authority to put the issue
of banning retail pot sales to a vote, there is no intention of doing
so. Trustee Len Johnson, a member of the trustee committee looking at
the issues, said at the work session, "This is a very conservative
town. There's really no use in spending $3,500 (for an election) just
to hear the 'No' that we know the voters will tell us."

There is also the public's confusion on the big difference between
medical marijuana and the retail marijuana outlets that have sprung
up statewide. Medical marijuana was approved by state voters as
Amendment 20 which deals with patients and "primary caregivers," not
with retail marijuana selling. Medical marijuana is available to any
legitimate medical patient who needs it, and no one is trying to take
that away.

On the other hand, retail marijuana selling businesses, known as
dispensaries, are not mentioned in Amendment 20. The legislature does
not consider these for-profit retail business operations that sell
marijuana to be protected under Amendment 20, and it has said they
can be banned or shut down by local government. The legislature
refused to buckle under heavy pressure from pro-pot lobbyists and did
not give them the legal legitimacy they sought.

So instead, marijuana businesspeople who took a giant, wild risk and
invested money setting up retail marijuana outlets now want local
government to underwrite their ventures by codifying them in local ordinance.

Orchard City trustees have another reason to fear acting on the
retail marijuana issue: they have been outmaneuvered twice already by
the dispensary in Eckert. It was only as the town board prepared to
adopt its dispensary moratorium earlier this year that officials
learned that one had already been open and operating for months.

Then, when the town did adopt its moratorium, it left a giant
loophole which allowed the dispensary to move to a highly visible new
location on Highway 65 and expand its operations. The mayor and some
trustees grumbled at the time about that move. And even though the
town's moratorium has since been renewed and extended, there is no
prohibition against another move and expansion by the current dispensary.

So, on one hand the town board fears using its statutory authority to
ban dispensaries. On the other hand it lacks experience or guidance
on how to regulate them. There is a third option which the trustees
also fear, which is the option of doing nothing at all. If the board
take no action at all, the Eckert dispensary under state statute will
become unlawful and go out of business on July 1, 2011, and trustees
fear that result also could get them sued; in that instance for their inaction.

The town board is looking for the easiest way out of its dilemma, a
way that appears to justify what some trustees have already decided.
That way is to create an ordinance and some minimal regulation that
more or less describes the current situation with one dispensary in
town, and which bans new ones - the town lawyer's option. That looks
like the option with the least chance of getting the town sued, which
is the main goal right now.

The trustees also report there is now an indoor commercial marijuana
growing operation along with the medical marijuana dispensary. The
new state law requires dispensaries to grow 70 percent of their own product.

At the July 7 town board work session, the mayor and trustees
described their current views on the retail marijuana issue as follows:

Suppes: Ban new dispensaries, grandfather the existing one with a
growing operation. Implement some licensing requirement. Impose some
caveats against selling or moving the business, neither of which the
owner has stated an intention of doing anyway.

Jan Gage: Agrees with Suppes.

Jerry Brunemeier: Agrees with Suppes.

Len Johnson: Agrees with Suppes.

Jimmie Boyd: Wait six months, then notify the dispensary that it will
be banned.

Marsha Thomas: Wait six months to see what develops on the issue
statewide and what is working in other communities. Then consider
banning the Eckert dispensary.

Gale Doudy: Take six months to observe what other communities are
doing. Then revisit the issue.

Editor's note: The medical marijuana industry is unhappy with the
state's new rules, including licensing fees ranging from $7,500 to
$18,000, plus optional license fees for cultivation and infused
products manufactiring of $1,250. It is also squawking about the
disclosure required in the licensing process, which must be filed
prior to Aug. 1. It is hoping to change the state's rules through
legal challenge. The pot industry is also raising funds and building
its case to bring an initiative on the 2012 ballot in Colorado to
legalize marijuana and hemp for all uses, making the current
situation a moot point.