CITY RELEASES MEDICAL MARIJUANA DISPENSARY ORDINANCE

SOUTH LAKE TAHOE, Calif. - South Lake Tahoe's medical marijuana
dispensaries could face stringent operational and financial regulation
under a proposed ordinance released by the city this week.

The proposal requires existing dispensaries to submit detailed
applications to the city and receive a permit to operate. Where a
dispensary can grow marijuana is also restricted under the draft ordinance.

A moratorium on new medical marijuana dispensaries has been in place
since November 2009 to allow the city time to regulate the operations,
which opened in South Lake Tahoe as far back as 2008.

The proposed ordinance limits permits to dispensaries deemed
"established operations" at the start of the moratorium. Three
dispensaries - Patient to Patient Collective, Tahoe Wellness
Collective and City of Angels 2 - have been granted the designation by
the city.

Chris Ziegler, the owner of Mountain Collective, a fourth dispensary,
is challenging the moratorium, as well as the city's determination he
did not meet the necessary requirements to be considered an
"established operation."

Among the requirements to gain a permit under the proposed ordinance,
a dispensary operator will need to provide documents to the city
showing how a dispensary is working as a nonprofit organization and
how marijuana is being distributed only to qualified members.

Annual budgets, financial statements, tax returns, product inventories
and any other records deemed necessary by the city manager to show a
dispensary is operating as a nonprofit would be subject to city
inspection under the draft ordinance.

Detailed security and operational plans would also be required as part
of the permitting process.

During a phone interview Friday, Tahoe Wellness Collective owner Cody
Bass said he has concerns with the ordinance as proposed, but said he
hoped to work out any issues during an upcoming meeting with city officials.

Representatives of Patient to Patient Collective and City of Angels 2
did not immediately return requests for comment Friday.

Once a dispensary receives a permit to operate they would be able to
apply for an industrial cultivation permit under the proposal, which
would allow indoor marijuana cultivation on up to 10,000 square feet
in an industrial area of the city if certain conditions are met.

Industrial grow areas would not be within 600 feet of any school, park
or religious establishment. Industrial cultivation would also need to
submit detailed security and operational plans to the city as part of
the application process.

The proposed ordinance prevents the growing of marijuana, other than
nursery plants, at a dispensary itself.

During Tuesday's city council meeting, City Attorney Patrick Enright
said he expects to meet with dispensary representatives and members of
the public regarding the ordinance the week of June 20. The ordinance
is slated for discussion at the council's July 12 meeting.