CITY SUCCEEDS IN HEARING AGAINST GILROY POT CLUB

A Superior Court judge upheld the City of Gilroy's decision to
prohibit medical marijuana dispensaries within city limits and
determined the city's sole dispensary is operating illegally.

In an eight-page court order released Tuesday, Judge Kevin McKenney
granted the city a "summary judgment," paving the way for the city to
issue an injunction to shut down MediLeaf, which has been open in west
Gilroy for almost eight months.

"Since it is undisputed that MediLeaf did not secure a license or
permit before commencing the operation of the medical marijuana
dispensary at the subject property, it necessarily violated the
Municipal Code," McKenney wrote. "As such the unlawful medical
marijuana dispensary may be enjoined."

MediLeaf opened Nov. 9 without a business license at 1321 First St.,
in the same shopping center as Togo's and First Street Coffee Exchange
after the City Council rejected an ordinance to regulate such operations.

MediLeaf directors have maintained the dispensary uses a
not-for-profit model and therefore does not require a business
license. However, McKenney stated in his order that city code requires
nonprofits to obtain the city's permission to operate.

"A contrary interpretation that a nonprofit organization can commence
the operation of any business or activity without the city's
permission would be unworkable and unreasonable," he wrote.

The order came after McKenney listened to attorneys from the city and
MediLeaf July 1. Previously, another superior court judge had allowed
MediLeaf to remain open while litigation was pending.

On Dec. 15, Judge Kevin Murphy listed three reasons for not granting
the city a preliminary injunction to shut down the dispensary. First,
he said the dispensary would not cause "irreparable harm" by staying
open. Secondly, he said it was not clear whether the city would
prevail when the matter goes to trial. Finally, he said Gilroy's City
Council committed a Brown Act violation when it approved a resolution
in a Nov. 16 closed session that allowed city attorneys to take legal
action against the dispensary. The council corrected that violation in
December by approving the resolution in open session.