PLACERVILLE MEDICAL POT DISPENSARY IS DENIED PERMIT

A medical marijuana dispensary in Placerville has been refused a
permit to continue operation because of what city officials
characterized as shoddy bookkeeping that raised questions about the
business's legitimacy.

Police Chief George Nielsen said Mountain Meds at 645 Main St. has
generated no police calls or public complaints since its October 2007
opening. But the dispensary was unable to provide adequate business
records to verify that it was not operating for profit and that it was
not selling marijuana for nonmedical purposes, he said.

Mountain Meds board members said efforts to maintain good records were
stymied because credit card companies and banks refused to do business
with them when they learned the operation was a medical marijuana dispensary.

Board member Michelle Smith said that forced them to operate on a cash
basis and with a bank account under a board member's name.

"The whole process has been a learning experience," Smith said during
a City Council hearing Tuesday. "I have made some mistakes."

She implored the council to give the dispensary a second chance,
saying that it is operated by volunteers to provide patients with a
safe place to obtain medical marijuana.

But Marilyn Meixner, a forensic auditor with the El Dorado County
District Attorney's Office, said that the way records were handled and
that bookkeeping was done internally raised several red flags.

The auditor said she also was alarmed to find that business receipts
were being run through a personal bank account, making it difficult to
verify that the money wasn't being used for personal purposes.

Council members expressed disappointment with the board and said the
council adopted the medical cannabis dispensary ordinance in 2006 in
response to pleas from people who appeared to have legitimate medical
needs.

Dispensary board members should have known that the operation would be
closely scrutinized, said Councilman Dave Machado, adding that "this
is not a little art gallery or a coffee stand."

"I'm appalled," he told Smith "that you and your board did not dot
every i or cross every t."