SANTA CLARA VS. MARIJUANA PART 1

Municipalities have long been playing tug-of-war with medical
marijuana dispensaries, with several Cities having adopted ordinances
prohibiting medical marijuana facilities.

Santa Clara has been fighting it's own battle against medical
marijuana dispensaries, quarreling with Angel's Care Collective, a
medical marijuana dispensary located on Laurelwood Avenue regarding
use permits and zoning issues since 2009.

"Angel's Care does not have a use permit for its operations," says
Deputy City Manager Carol McCarthy. McCarthy states Angel's Care has
a business license, but is operating in an improper zoning district.

According to McCarthy, zoning in the area where Angel's Care is
located allows manufacturing, warehousing, commercial storage,
wholesale distribution warehouses, incidental retail (typically
defined as 10 percent of floor area) for goods associated with the
primary allowed use, laboratories and research offices, processing
and packaging, with conditionally permitted uses including retail
commercial and services such as restaurants, cocktail lounges and
live entertainment, outdoor storage and kennels.

"Since Angel's Care does not have approved permits and is not an
allowed use in the zoning district, it is operating illegally and
fines are being imposed," states McCarthy.

According to McCarthy, Santa Clara Planning is issuing weekly
citations to Angel's Care for the zoning violations, with citations
of $1,000 each, issued starting at the end of September 2009, with
fines now $3,000 each week (three separate code violations), with
Angel's Care allegedly owing the City over $110,000. Fines were
increased from $500 to $1,000 based on a Code provision that allows
for doubling of fines when the same violation occurs within a
36-month period, of which McCarthy states is a standard code
enforcement policy.

McCarthy states that The City became aware of Angel's Care selling
medical marijuana in August 2009, when they applied for a business
license. "oeDuring the application process they used the term
"'dispensary' but did not initially mention medical marijuana. When
we determined that Angel's Care was a dispensary for medical
marijuana, the City sent our first cease and desist letter on
September 22, 2009."

Owners Say City Was Well Aware of Type of Business

According to Angel's Care Executive Director Douglas Carter, the City
knew the type of business Angel's Care was eight months prior to
opening, as he and a representative of Angel's Care hand delivered a
planning summary to the City planning department, as well as to then
Police Chief Steve Lodge and then Mayor Patricia Mahan in February 2009.

"oeAngel's Care as a corporation has the legal right to use "'Health
Care Provider' in all licensing and permits they obtain. There was
absolutely no deception to the City of Santa Clara. They knew who and
what we were eight months before we opened," states Carter.

Carter adds in 2004, the state attorney general sent a letter to "all
cities in California" telling them to create ordinances in their City
for collectives so patients in their community could have a safe
location to get cannabis. "oeEither from their arrogance or ignorance
the City of Santa Clara decided to ignore this letter," states
Carter. "oeAs the laws are now, we have a legal right to be here."

On August 16, 2011, the City Council adopted an Ordinance amending
the Zoning Code to prohibit medical marijuana dispensaries.

"The city is fining us for being a retail business in a light
industrial zone. However, 85 percent of the businesses in the light
industrial zone are retail and without a conditional use permit,"
states Carter. "Even our own address was a retail store for eight
years prior to Angel's Care with no permit."

Though Angel's Care lost appeals at two levels regarding the zoning
and use permit issue, they are moving forward with an initiative
petition, "for the purpose of implementing the Compassionate Use Act
of 1996 and the Medical marijuana Program Act."

The initiative states "That the City of Santa Clara should implement
a plan to provide for and regulate the safe distribution of marijuana
to all patients in medical need of marijuana within the City of Santa
Clara as directed by the Companionate Use Act of 1996 ..."

The proposed initiative reads "AN INITIATIVE TO ADOPT AN ORDINANCE
PERMITTING MEDICAL MARIJUANA DISPENSARIES IN ALL NON-RESIDENTIAL
AREAS OF THE CITY OF SANTA CLARA AND ESTABLISHING STANDARDS FOR SUCH
DISPENSARIES," would add Chapter 5.46, entitled "oeMedical
Marijuana," to the City Code of the City of Santa Clara.

If approved, the initiative allows the City Council to make
amendments if consistent with the findings and purpose of the initiative.

The City received a ruling from a Superior Court judge in March 2010
that Angel's Care is operating in an improper zoning district without
proper use permits. Angel's Care appealed that ruling to the Superior
Court appellate division, which was denied. According to McCarthy,
the City has filed an injunction to close Angel's Care, with hearing
slated for January 24.

Next week: Part 2 - More on the Ballot Initiative, History of medical
marijuana in Santa Clara and more on Angel's Care Collective.