CITY IS STRICT ON POT SHOPS

It Seeks to Shut Those Whose Management Has Changed for Any Reason Since 2007

When the Los Angeles City Council adopted its medical marijuana
ordinance, it aimed to rout unscrupulous dispensary operators whose
unruly customers irritated residents and operators who opened up
willy-nilly across the city, ignoring a ban on new stores.

But the ordinance has snared operators who appear to have tried hard
to adhere to state law and the city's rules. Among them are some of
the most politically active operators whose dispensaries are
considered model operations. Last week, the city sued these
dispensaries and dozens of others and asked a judge to rule that they
could be shut down.

The ordinance, which went into effect in June, allowed dispensaries
that registered with the city by Nov. 13, 2007, to apply to stay
open, but it required them to have "the same ownership and
management." The city attorney's office has decided that means the
owners and managers must be the same people who held those positions
three years ago.

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When Barry Kramer opened California Patients Alliance in April 2007,
he ran it alone. "I was the manager. I was the operator. I was the
secretary. I was everything," he said. Now, with about 1,500 members,
the Beverly Grove dispensary has added two managers. "I can't be here
seven days a week," Kramer said. "I don't see any legal basis for
saying a business is not allowed to expand."

Under the city's interpretation of the ordinance, if a dispensary's
manager died, quit or was fired and was then replaced, it must close.
If the business grew and added managers, it must close. If it shrank
and let managers go, it must close. If it was sold to new owners, it
must close.

"It makes it completely irrational. This is life. Things happen,"
said David Welch, a lawyer who represents more than 60 dispensaries.
"It almost puts an impossible burden on collectives."

Stewart Richlin, another attorney for dispensaries, noted that the
city did not tell registered dispensaries in 2007 that they could not
change owners or managers, and he pointed to a 2009 planning
department memo that says the city "does not prohibit ownership changes."

"This is America," he said. "Every business can be transferred."

The city attorney's office said it must interpret the ordinance
strictly, saying any discretion would expose the ordinance to legal
attacks. "We are constantly thinking of the greater good, which is an
enforceable ordinance," said Jane Usher, a special assistant city
attorney who helped draft the law and is defending it against 32
lawsuits filed by dispensaries that were ordered to shut down.

Usher said the language that the City Council adopted is unambiguous:
no change in ownership, no change in management. "There was a very
clear road map," she said, "and I don't know why dispensaries didn't
follow it, but I assume they didn't follow it because they couldn't."

David and Irina Vayntrub learned last week that their dispensary,
Absolute Herbal Pain Solutions, was ineligible to stay open.

"I was shocked," said David Vayntrub, holding up a point-by-point
summary of the ordinance that his wife had typed up and that he keeps
on his desk. "This is in front of me every day."

The Vayntrubs think the city disqualified their dispensary because
Irina, who they said has been involved since the store opened in
January 2007, is now the secretary of the board. Under the city
attorney's interpretation, that might be a management change. They
are not certain, though; they said city officials did not respond to
the five voice messages they left last week.

"I'm still here. Same manager. Same owner," said David Vayntrub, who
said he works at the store on South La Brea Avenue every day. "We
truly tried to follow this ordinance."

The city clerk last week notified 128 of the 169 registered
dispensaries that they were ineligible to remain open. The city filed
a lawsuit against the ineligible dispensaries, but they will be
allowed to operate until a judge considers the suit.

According to the suit, 120 were ineligible because of management
changes. Of those, 58 were disqualified solely on that basis; the
others also had ownership changes and other issues.

The clerk's office is trying to figure out how to respond to
distraught dispensary operators. "I'm trying to iron that out now,"
Holly Wolcott, its executive officer, said last week.

Councilman Ed Reyes, who oversaw the drafting of the ordinance, said
the city needed to "stick with the letter of the law" but promised to
assess the effect on dispensaries.

Some disqualified operators will be familiar to Reyes because they
have been active at City Hall for years. All of them are original
operators and were excluded for management changes.

Besides Kramer, they include Yamileth Bolanos, who runs PureLife
Alternative Wellness Center and heads a group of about 60 original
dispensaries; Michael Backes with Cornerstone Research Collective,
which focuses on severely ill patients; James Shaw with Arts District
Healing Center, who runs the Union of Medical Marijuana Patients; and
Bill Leahy, who manages the Farmacy stores, which were started by a
pharmacist, JoAnna LaForce.

"I can't tell you how surprised we all were," said Leahy, adding that
the city is targeting registered dispensaries when it has failed to
shut down numerous unauthorized outlets. "Most of them have reopened
again and the city's done very little about it."

Some ineligible dispensaries appear to be victims of a Catch-22 or two.

Almost a year after dispensaries were required to register in Los
Angeles, the state attorney general advised that they needed to be
run as nonprofit collectives. Many were not. So they reorganized as
nonprofit corporations, a change that replaced an owner with a board
of directors. Under the city attorney's interpretation of the
ordinance, that may have disqualified them.

This summer, when the city started to determine whether the
registered dispensaries were qualified to remain open, it sent them a
letter asking for "the name(s) of the collective's management."
Because the ordinance defines managers as anyone responsible for
"organization, registration, supervision, or oversight," some
dispensaries included names of employees that were not on their
original registration forms, which may have disqualified them.

More than a few wonder whether it was a trap. "We all knew they were
looking for some slimy little technicality, and this seems to be it,"
Kramer said.

Chris Fusco, a consultant who knows the ins and outs of City Hall,
said that when he inquired about the letter, he was told by officials
at the clerk's office that an exact match was required. But others,
including the Vayntrubs, said they were not.

"The administration of the application process is just like nothing I
have ever seen or known or imagined," Fusco said. "It's a black
curtain, and what's behind it, no one will tell you."