City Files Lawsuits Against Pair of Pot Clubs

Two weeks after passing an , the City of Newark is still waiting for two medical marijuana dispensaries to close up shop. 

Both Happy Wellness Center on Jarvis Avenue and Cannabis Collective continue to display distinct “Open” signs, despite the city council’s approval of an emergency ordinance prohibiting the establishment and operation of medical marijuana dispensaries.

City Manager John Becker said the city has filed suits against both NBD Cannabis Collective and Alpha Rising, Inc., which operates Happy Wellness Center, in Alameda County Superior Court because of their refusal to close.

“Despite the action the council took, we do not believe they will close without being forced to closed,” Becker said.  “What it comes down to is that both of them knew they were not obeying the city’s land ordinance.”

Online court records show that the City of Newark filed a civil suit against Alpha Rising, Inc. on Nov. 1 and a separate civil suit against NBD on Nov. 2. Conferences for the two suits are scheduled for early 2012.

Becker said that in those suits the City of Newark is requesting for court-issued injunctions so that the city can enforce the ordinance and close the pot clubs.

But the lawyers representing the cannabis collectives said each club has every right to stay open.

"As of right now NBD is remaining open and has no reason to close," said James K. Roberts of Roberts and Elliott, LLP, the attorney firm that represents NBD. "You can't retroactively do away with a lawful land use,” Roberts said about the urgent ordinance passed by the city council on Oct. 27.

Scot Candell, the attorney representing Alpha Rising, Inc., said Happy Wellness has acted appropriately but was still denied a business license the owners had applied for before its opening. An appeal for the denial of that business license was dismissed by the city council on Oct. 27.

"We're doing everything to be compliant with state and local laws,” Candell said. "The city is not allowed under law to deny [Alpha Rising] a business license,” Candell said. 

City officials have said the denial of the business license was based on whether the business was a permitted use according to the city’s zoning laws, but Candell said his law firm disagrees with that reasoning, so Alpha Rising, Inc. also filed a suit against Becker and other city officials on Nov. 1, according to court documents.

The ordinance banning pot clubs was passed by the city council on Oct. 27, and a permanent ordinance was approved during the council's Nov. 10 meeting.

City staff members have continuously pushed for the passing of a ban on pot clubs, citing zoning regulations that do not allow for the trade of marijuana and that require all businesses in Newark to be compliant with federal laws.

According to the U.S. Department of Justice Drug Enforcement Administration, marijuana is classified as a Schedule I Controlled Substance, meaning it has "a high potential for abuse (and) no currently accepted medical use in treatment in the United States, and there is a lack of accepted safety for use of the drug or other substance under medical supervision."

Dixie Jordan contributed to this report.