Resolution 2009-42
RESOLUTION NO. 2009-42
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY ORDERING
THE CITY ATTORNEY TO TAKE ALL NECESSARY ACTIONS TO ENJOIN
MEDICAL MARIJUANA DISPENSARY ACTIVITIES BY MEDILEAF AND ITS
AFFILIATES AT 1321-B FIRST STREET, APN: 790-43-017, OR AT ANY OTHER
LOCATION WITIDN THE CITY OF GILROY
WHEREAS, the sale of marijuana and the operation of a marijuana dispensary within the
City constitute the "carrying on of any business, trade, calling, profession, or occupation" and are
thus required to have a business license issued by the City pursuant to Sections 13.1, 13.2, 13.43
and 13.44(a) of the Gilroy Municipal Code; and
WHEREAS, the sale of marijuana and the operation of a marijuana dispensary are not
permitted uses under any City zoning district contained in the Gilroy Zoning Ordinance; and
WHEREAS, on or about May 8, 2009, Goyko G. Kuburovich, President of MediLeaf
(which is also doing business as "MediLeaf Medical Cannabis Collective Dispensary" and/or
"UR Health & Wellness Center", collectively referred to hereafter as "MediLeaf'), submitted an
application to the City for a business license to operate a medical cannabis collective dispensary
for the retail sales of medical cannibas at 1207 1 st Street in the City of Gilroy; and
WHEREAS, on June 8, 2009, Goyko G. Kuburovich, President of MediLeaf, submitted
an application to the City for a business license to operate a medical cannabis collective
dispensary for the retail sales of medical cannibas at a different location in the City, 7581
Monterey Street; and
WHEREAS, the City denied MediLeafs May 8, 2009 and June 8,2009 business license
applications, as further explained in letters from the Gilroy City Attorney to MediLeaf s
attorneys, dated July 16, 2009 and August 24, 2009, pursuant to Section 13.44(a) of the Gilroy
Municipal Code, because the uses being proposed did not comply with federal law; and
WHEREAS, on or about September 14,2009, representatives for MediLeafsubmitted an
application to the City for a conditional use permit ("CUP") to operate a medical marijuana
dispensary at 7101 Monterey Road in the City of Gilroy; and
WHEREAS, on or about September 24, 2009, the City declined to process said
application because the City Zoning Ordinance does not have a use category that recognizes and
regulates a medical marijuana dispensary, and because the proposed use does not comply with
federal law and returned MediLeaf s CUP application and application fee to their representative;
and
WHEREAS, Section 13.30 of the Gilroy Municipal Code exempts organizations that are
"conducted, managed, or carried on wholly for the benefit of charitable purposes or from which
profit is not derived, either directly or indirectly, by any individual, firm, or corporation," from
the City's business license fee requirement, but does not exempt such organizations from the
1
Resolution No. 2009-42
requirement that a business license be obtained in compliance with Sections 13.2 and 13.44(a) of
the Gilroy Municipal Code; and
WHEREAS, no exemptions from the City's business license requirements, as set forth in
Sections 13.1, 13.2, 13.43 and 13.44(a) of the Gilroy Municipal Code, have been granted or
apply to MediLeafs sale of marijuana and/or its operation of a marijuana dispensary in the City;
and
WHEREAS, the City Council discussed and considered a proposed medical marijuana
ordinance, which would have permitted the operation of medical marijuana dispensaries, at
public meetings held on August 3, 2009, September 14, 2009, and October 12,2009; and
WHEREAS, representatives of MediLeaf were advised of their right to attend and
participate in, the August 3, 2009, September 14,2009, and October 12,2009 meetings, and did
actually attend and participate in them by giving testimony in favor of the adoption of a medical
marijuana ordinance; and
WHEREAS, at its October 12, 2009 meeting, the City Council ultimately voted not to
adopt a medical marijuana ordinance; and
WHEREAS, the City discovered, on November 9,2009, that MediLeafwas operating a
medical marijuana dispensary at 1321-B First Street, in the City of Gilroy, APN: 790-43-017
("the Premises"); and
WHEREAS, MediLeaf is holding itself out to the public as operating a medical
marijuana dispensary at the Premises, which includes selling medical marijuana, as evidenced by
its webpage. Attached hereto as Exhibit "A" are pages printed out on November 11, 2009 from
MediLeafs webpage, www.medileaf.org; and
WHEREAS, on November 11, 2009, the City Administrator served MediLeaf and the
owner of the Premises with a letter ordering them to immediately cease and desist operating a
marijuana dispensary and/or otherwise cease and desist from selling marijuana at the Premises (a
copy of which is attached hereto as Exhibit "B"); and
WHEREAS, as of November 16, 2009, MediLeaf has not ceased and desisted from
operating a marijuana dispensary at the Premises; and
WHEREAS, Section 53.30 of the Gilroy Zoning Ordinance provides, in pertinent part,
that, "any use of any land, building or premises conducted, operated or maintained contrary to
the provisions of this Ordinance shall be and the same is hereby declared to be unlawful and a
public nuisance and the City Attorney of the City shall, upon order of the City Council,
immediately commence action or proceedings for the abatement and removal and enjoinment
thereof in the matter provided by law and shall take such other steps and shall apply to such court
or courts as may have jurisdiction to grant such relief...;" and
2
Resolution No. 2009-42
WHEREAS, Section 53.30 of the Gilroy Zoning Ordinance further provides that the
remedies for abating and enjoining nuisances provided therein are cumulative and not exclusive;
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Gilroy,
pursuant to Section 53.30 of the Gilroy Zoning Ordinance, hereby orders the City Attorney to
immediately commence action or proceedings for the enjoinment of MediLeafs operation of a
marijuana dispensary and/or the enjoinment of marijuana sales at the Premises or at any other
locations in the City, and to take such other actions and proceedings to prevent further violations
of the Gilroy Municipal Code and Zoning Ordinance as are otherwise authorized by law.
PASSED AND ADOPTED this 16th day of November, 2009, by the following vote:
AYES: COUNCILMEMBERS:
BRACCO, DILLON, TUCKER and
PINHEIRO
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
NONE
ARELLANO, GARTMAN, WOODWARD
APPROVED:
- / ).;;:.::;-::::7
L. A~;~;=-
--"."_...,,-".,.
ATTEST:
Attachments: Exhibits A and B
3
Resolution No. 2009-42
EXHIBIT A
,. ...,"_! ,t.!> '.I!
MediLeaflH
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MediLeaf Medical Cannabis Collective Dispensary
1321-8 First Street, Gilroy, CA 95020
Office: 408-847-2400
Fax: 408-842-5800
About MediLeaf
MediLeaf 1M
MediLeaf is an upscale Medical Cannabis Collective-Dispensary being
established to provide Medical Cannabis to Approved Patients who hold
a currentand valid Doctor's Recommendation and/or Patient
Identification Card. MediLeaf iSda Mutual Benefit Nonprofit California
Corporation.
California State Law - Proposition 215 has backed the use of Cannabis
for Medical purposes.
The Citizens of Santa Clara County need a local source for
Compassionate Relief. That stated, a new approach should be taken to
insure that the retail sale of Medical Cannabis is done in a manner
similar to other retail providers of controlled substances, such as
Tobacco Products, Liquor and over the counter Cold Remedies that are
dispensed from pharmacies.
The Operators of MediLeaf have extensive business experience and
are well qualified to plan, open and maintain a business of this type that
can meet the needs of collective members while addressing the
concerns of the local community. As civic minded citizens and long
standing members of the community, the operators and managers are
committed to working with local and county offices in meeting all legal
requirements for operating this business. In addition, a close working
relationship will be developed with local police to insure security
through the use of effective security systems.
This business endeavor is Health Related, Green for the Environment,
Organic and Natural and good for the Economy in as such that Jobs are
created and Taxes are generated. This is a Win-Win situation for the
Community, Customers, Economy and Environment.
http://www.medileaf.net/about%20Medileaf/about.htm
11/1112009
Mission Statement
To assist Patients who require a local source for filling their needs for
Medical Cannabis in a compassionate and humane manner.
To Pay Taxes that help support the Community.
To help Patients who are suffering and Patients who are in Pain.
To maintain a Collective-Dispensary that is located in a safe and
convenient location. The Medical Cannabis Collective-Dispensary will
be clean, attractive, well lighted and staffed by professionals that will
treat the Patients in a respectable and professional manner.
As a resource to the community and Medical professionals, the Medical
Cannabis Collective-Dispensary will provide information on the use of
Cannabis for Medical purposes.
To be supportive of the needs of the communities served by being
active in the local Chamber of Commerce and to donate time and
resources to our comm~h'ity:'To create jobs within our Community such
as Retail, Educatgrs, P9~t9r~,L9wyers, Accountants, Buyers,
Contractors, Chiropradbr.sahd Acupuncturists to name a few.
<": ::.:i'; '\-.;" ,.< -- ,'- ,":
To cooperate wit~ 'Law Enforcement (Police, Sherriff,...), Legislation
(City Council,..,) 8r;1d th.eCommunity in order to reduce Crime,
Generate Political~uI?P9rt~ Create' Jobs.
To Help Organize, Regulate, Tax and Control Cannabis sales in Santa
Clara County as required by law.
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http://www .rnedileafnetJ about%20Medileaf/ about.htrn
11/11/2009
MemLeaf'"
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,. .
http://www.medileaf.netl
MediLeaf Medical Cannabis Collective Dispensary
1321-8 First Street, Gilroy, CA 95020
Office: 408-847-2400
Fax: 408-842-5800
Welcome
Open Seven Days a Wee
t:iiiMJ sonD
MediLeaf and dba UR Health & WellnessCenter is open 11am - 7pm
seven days per week @132-BtstStreet inGilroy, CA next door to
The Rock Zone.
MediLeaf and UR Health& Wellne~sCe:nterspecializes,inaffordable
and High Quality Medicine: Cannabis $55 ma)(imum for1/8ths &
$400 maximum for ounces. We hav~ Clones for those who would like
to grow their own Medicine. . . .
We look forward to providing a comfortable, safe, informative and
pleasant environment while offering a wide variety of Cannabis strains
for our Members.
We look forward to welcoming all New Members and please be sure to
bring your Doctor Recommendation on your first visit.
MediLeaf Directors & Management
MediLeaf is registered as a Mutual Benefit Nonprofit California
Corporation and will be known as "MediLeaf and dba UR Health &
Wellness Center."
In keeping with our Health and Wellness philosophy, we are offering
additional health and wellness products and services to our members
through MediLeaf and dba UR Health & Wellness Center.
The MediLeaf Medical Cannabis Collective Dispensary is committed
to meeting the needs of those seeking relief from pain and suffering
through the legal use of Medical Cannabis.
Batzi Kuburovich and Neil J Forrest, directors of the collective, are
11/11/2009
committed to meeting the needs of the collective membership in
balance with the needs of the community. For additional information we
suggest you review the sections AbolJt MecHLeaf and the Rules and
Regulations of the collective.
Attention Patients and Care Givers
All Patients and Care Givers are welcome to egister under the
Membership Sign-uQ menu option. New members will need to bring
their Doctor's recommendation with a California State Issued Driver's
License or I D.
You may wish to review our Privacy Policy.
MediLears Medical Cannabis 810g
We have started a Medical Cannabis Blog to collect personal
experiences as to how Medical Cannabis has been helpful to you or
someone you love. See what others a~e saying and tell us of your
experience. . . . .
;Notice:This websjte is still under construction. PIe,C!sebepatientas
'lffJ add90ntent and. function~lity to thi*}:vebsite.,. . .
Home I About MediLeaf I News I Newslett~[ I Member Siqn-uQ I Calendqr. I FAQ I InfOrmation L"inks I pres~ I
ConJ~<j
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Copyright @ 2009 MediLeaf Medical Cannabis Collective Dispensary. All Rights Reserved.
http://www .medileaf.netJ
11/11/2009
MediLeaflM
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EmpJoym~nr, >
. Contact
MediLeaf Medical Cannabis Collective Dispensary
1321-6 First Street, Gilroy, CA 95020
Office: 408-847-2400
Fax: 408-842-5800
News
~
",
..~"...
I-,J I.
MediLeaf Business News
M~diLeaf. anq dba UR Health & .Wellness Center
isopem 11am-7prnseven days per week
We are located at:
1321 B First Street
Gilroy, California
We are located next door to The Rock Zone.
(Current hours are by appointment only)
MediLeaf and UR Health & Wellness Center specializes in affordable and
High Quality Medicine: Cannabis $55 maximum for 1/8ths & $400 maximum
for ounces. We have Clones for those who would like to grow their own
Medicine.
We look forward to providing a comfortable, safe, informative and pleasant
environment while offering a wide variety of Cannabis strains for our
Members.
We look forward to welcoming all New Members and please be sure to bring
your Doctor Recommendation on your first visit.
MediLeaf Directors & Management
Home I About MediLeaf I News I Newsletter I Member Sign-up I Calendar I FAQ I Information Links I Press I Contact
Employment I Employees I Rules and Requlations I Privacy Statement I Site Map I Blog
Copyright @ 2009 MediLeaf Medical Cannabis Collective Dispensary. All Rights Reserved.
http://www.medileaf.net/news/news.htm
11/11/2009
MediLeaf1>l
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About MediLeaf
News
Newsletter
Member Sign-up
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Press
Employment
Contact
MediLeaf Medical Cannabis Collective Dispensary
1321-8 First Street, Gilroy, CA 95020
Office: 408-847-2400
Fax: 408-842-5800
The managers of MediLeaf Medical Cannabis Collective Dispensary are
dedicated to both Collective Members and the commul1ity we serve.
Plea'se contactus if you have questions, concerns or'suggestions. .Your..
feedback is appreciated.
Location
MediLeaf Medical Cannabis Collective Dispensary
1321-8 First Street
Gilroy, CA 95020
Mailing Address
MediLeaf Business Office
16430 Monterey Suite 5
Morgan Hill, CA 95037
Hours of Operation
Open 7 days a week from 11 :00 am to 7:00 pm
Starting Monday, November 9,2009
Email Contacts
Click the name below to send an email message to:
Batzi Kuburovich or Neil J Forrest
http://www.medileafnet/contact/contact.htm
11/11/2009
To submit comments, suggestions or report problems with the website,
please send an email to our Webmaster.
MediLears Medical Cannabis Blog
We have started a Medical Cannabis Slog to collect personal
experiences as to how Medical Cannabis has been helpful to you or
someone you love. See what others are saying and tell us of your
experience.
MediLeaf Privacy Statement
Home I About MediLeaf I News ll'Jewsletter I Member Sign-uQI Calendar I FAQ I Information Links I Press I
Contact
Employment I Employees I Rules and Reoulations I Privacy Statement I Site Map I 810g
Copyright @ 2009 MediLeaf Medical Cannabis Collective Dispensary. All Rights Reserved.
10
http://www.medileaf.netJcontact!contact.htm
11/1112009
EXHIBIT B
QCitp of (fgilrop
7351 Rosanna Street
Gilroy, California
95020-6197
Telephone (408) 846-0202
Facsimile (408) 846-0500
http://www.ci.qilrov.ca.us
Thomas J. Haglund
CITY ADMINISTRATOR
November 11,2009
Neil J. Forrest, Director
Batzi Kuburovich, Director
MediLeaf
Dba MediLeaf Medical Cannabis
Collective Dispensary
Dba DR Health & Wellness Center
1321-B First Street
Gilroy, CA 95020
Goyko G. Kuburovich
MediLeaf
16430 Monterey Road, Ste. 5
Morgan Hill, CA 95037
Mike and Kulwinder Kaur Atkar
2467 Murillo A venue
San Jose, CA 95148
Re: Cease and Desist Order
1321-B First Street, APN: 790-43-017
To Whom It May Concern:
The City of Gilroy ("City") is informed that one or more of the persons or entities
addressed above, and/or persons or entities under their control and/or acting in concert with
them, is operating a medical marijuana dispensary and/or otherwise selling marijuana at l321-B
First Street in the City of Gilroy ("Premises"), in violation of federal law, the Gilroy Municipal
Code, and the Gilroy Zoning Ordinance. The sale of marijuana and the operation of a marijuana
dispensary in the City constitute violations of Sections 13.2 and 13.44(a) of the Gilroy Municipal
Code because such activities are being conducted without a business license. A properly issued,
lawful business license is required of for-profit and non-profit businesses and entities in the City
of Gilroy. In addition, such activities violate Sections 53.20 and 53.30 of the Gilroy Zoning
Ordinance because they are not permitted uses under any City zoning district. As such, these
uses constitute a public nuisance (Zoning Ordinance section 53.30), and no exceptions have been
granted or apply. Thus, the persons or entities addressed above, including the owners of the
property upon which the unlawful use is conducted, and/or persons or entities under their control
and/or acting in concert with them, are hereby ordered to IMMEDIA TEL Y CEASE AND
DESIST from selling marijuana or otherwise operating a medical marijuana dispensary at the
Premises or at any other location in the City, and will be held liable if such use is not ceased.
As MediLeaf's representatives are well aware, the operation of a medical marijuana
dispensary and the sale of marijuana are not permitted under the City's Zoning Ordinance. The
City rejected MediLeaf s application for a business license because the proposed use is not a
lawful use according to federal law as required by the business license ordinance nor does it meet
the zoning requirements of the City (see letters from the City attached hereto), and the City
returned MediLeafs September 14, 2009 application for a conditional use permit and refused to
process it for the same reason. (See City letter attached hereto.) In addition, the City Council
gave serious consideration to a proposed medical marijuana ordinance that would have permitted
such uses, but ultimately decided not to adopt the ordinance at its October 12,2009 City Council
meeting, which MediLeaf representatives participated in. Therefore, such a business remains
unlawful both under the City's business license ordinance and under the City's zoning ordinance.
If you fail to cease and desist these operations immediately, then the City will be free to
take any and all legal actions necessary to enforce your compliance with the law, including but
not limited to issuing administrative citations against you, seeking administrative penalties for
each day you continue to operate without a license, issuing criminal citations, and seeking a
court order for injunctive relief to prevent further violations.
Thorn s J. Haglund
City Administrator
EncIs.
cc: Denise Turner, Chief of Police
Linda A. Callon, City Attorney
Kristi Abrams, Development Center Manager
2
BERLINER. COHEN
SANFORD ^- BElU./NER
ANDREW L. FABER
RALl'Il J. SWANSON
PEGGY L. SPRlNGGA Y
JOSEPH E. DWOItAJ(
SAMUEL L. F ARB
ALAN J. PlNNllR
FRANK !l UBHAUS
LINDA ^- CALtoN
JAMES P. CASHMAN
STEVEN J. CASAD
NANCY J. JOHNSON
JEROLD A. RElTON
ROBERT L. CHORTEK
JONATIlAN D. WOLF
KA THUlEN X. SIPLE
KEVIN f. KEllEY
MARK MAXlEWlCZ
ROBERTA S. HAYASHl
JIlFFREy S. KAUFMAN
JOLIE HOUSTON
BRIAN L. SlIEllD.
JOHN F. DOMJNGUE
IlARIl. Y ^- LOPEZ
CliAJlU;S W. VOLPE
M1CIIAI!L V10LANrl
ATTORNEYS AT LAW
TEN ALMADEN BOULEY ARD
ELEVENTH FWOR
SAN JOSE, CALIFORNIA 95113-2233
TELEPHONE: (408) 286-5800
FACSIMILE: (408) 99&-5388
www.berliner.com
THOMAS P. MURPHY
V1CroR A PAPPAlARDO
MILES J. DOLINGER
CHRlSTlAN E. PICONE
mOMAS D. MORELL
SETH J. COHEN
CHRISTINIl It LONG
LAURA PALAZZOLO
SHANNON N. COGAN
AARON M. V AI..ENTI
KAllA L ARGUELLO
ANDRllW J. GJORGlANNJ
MATTHl!W ^- TAYLOR
IffiA TIlEll/i MUNOZ
FORREST W. HANSEN
ALAN D. NlEBEL
SANDAA G. SElL'!. VEn.4
MARCOM.CJJ,lJ'AGNA
ERIC J. EE.'lQ1Il5T
DEBBIE Y. ME
MARY ICATIlAllINE WILSON
NICHOLAS RABY
STEP!IANlll B. WERSEL
USA L. GORECKI
RETIRED
SAMUEL J. COHEN
ROBERT W. HUMPHR.I!YS
Branch Offic. - Merced, CA
OF COUNSEl.
HUG!! L. ISOLA
STEVEN L. IlALLGRlMSON
EllIC WONQ
PIIILlP GOLDEN
NANCY L BR.UIDT
September 24, 2009
James Suner
2950 Soma Way
Gilroy, CA 95020
Re: Conditional Use Permit Application ("CUP")
Location: 7101 Monterey Road, Gilroy
APN #799-10-060
Applicant: Medi Leaf Corp. - Batzi Kuburovich and Neil Fon.est
Dear Mr. Suner:
The City is returning to you the original above-referenced CUP application that you
turned into the City on September 14,2009, a copy of which has been kept by the City, and is
returning to you the original check for City fees in the amount of $4,185.00. The City cannot
process this application at this time because the City Zoning Ordinance does not have a use
category that recognizes and regulates a medical marijuana dispensary. In addition, the Gilroy
City Code does not allow operation of any business that does not show compliance with all
federal, state and local laws and ordinances. (See the business license ordinance at Gilroy City
Code section 13.33(a)] The proposed use does not comply with federal law or with the City's
zoning ordinance.
As to the zoning issue, the City Council understands that this is a newly proposed use that
must be considered within the zoning and land use context for Ioeational criteria and other
standards and limits on development to apply to such a use to protect the health, safety and
welfare of the users and the surrounding areas. On August 3, 2009, the City Council directed
staff to propose a new zoning ordinance that would permit and regulate the use of a medical
marijuana dispensary within the City, and that work is underway. (See City Council agenda
packet for September 14, 2009.) The City Council at that meeting, which you attended and
ItAC\B01265.2
092409-01706089
James Suner
September 24, 2009
appeared on behalf of the CUP applicants, directed staff to bring back regulatory proposals for its
review, and a special meeting is now scheduled for October 12,2009 at 6 p.m.
In addition, if such an ordinance is adopted, the City will also amend its business license
ordinance to be consistent with the regulatory scheme for such a use.
As we discussed at the September 14,2009 Council meeting, the City at this time does
not have a process under which to proceed with an application for a use or a requested permit
that is not consistent with the zoning ordinance. This letter is to inform you that this application
is therefore incomplete, and cannot be made complete by any action of the applicants. A change
in both the zoning ordinance to include such a use with its accompanying regulations and a
change in the Gilroy City Code allowing such a use to be licensed must be approved by the City
Council and take effect prior to processing any application for a medical marijuana dispensary in
Gilroy.
This processing denial is without prejudice, and your clients are free to file for the
appropriate land use application and a business license when and if the City Council adopts the
relevant ordinances to allow this use.
Please call with any questions.
Verytrl.Jly yours,
BERLINER COHEN
LINDA A. CALLON
City Attorney, City of Gilroy
E-Mail: linda.callonCa1berliner.com
LAC:cem
cc: Tom Haglund, City Administrator
Kristi Abrams, Development Center ManagerlBuilding Official
lLACIB01265.2
092409-04706089
-2-
BERLINER. COHEN
SANFORD A. BERLINIU\
ANDREW L FABIU\
RAI.1H J. SWANSON
l'EGGY L SPRlNGGA Y
JOSEPH E. DWORAK
SAMlJEL1.. FARIl
A!.AN I. PINNER
fRANK R. UBllAUS
LINDA A. CALLON
lAMES P. CASHMAN
STEVEN I. CAS,W
NANCY I. JOHNSON
JEROLO A. RElTON
ROBERT L CllORTEl<
JONATHAN D. WOLF
KATHLEEN It SIPLE
KEVIN F. KELLEY
MAAJ< MAKlEWlCl
ROBERTA S. llA Y ASH!
JEFFREY S. KAUFMAN
JOUE HOUSTON
BRlAN L SI!lITU!R.
JOHN F. DOMINGUE
!lAAAY A. LOPEZ
CIIAll.LES W. VOI.1E
MICHAEL VlOLANTI
ATTORNEYS AT LAW
TEN ALMADEN BOULEVARD
ELEVENTII FLOOR
SAN JOSE, CALIFORNIA 95113-223)
TELEPHONE: (408) 286-5800
FACSIMILE: (408) 998-5)88
www.beTliner.com
THOMAS P. MURl'1fY
VICTOR A. PAPPALAlWO
M1LSS I. DOLltIGIU\
ClIIUSTWl E. PICONE
mOMAS D. MOIU!ll
SETH I. COHEN
CllIUSTlNE H. LONG
LAURA PALAZZOLO
SHANNON N. COGAN
AARONM. VALENTI
KARA 1.. ARGUELLO
ANDREW J. GIOR-GIANNI
MAlTHEW A. TAYLOR
HEA TIlER H. MUNOZ
FOR.REST W. HANSEN
A!.AN D. NIEBEl
SANDRA G. SEPULVEDA
MAIleo M. CAMP AON ^
ElUe I. BERQUIST
DEll8IE Y. 8AE
MARY ICAlllARINE WILSON
NlCHOUS RAllY
STEPHANIE B. WEJl5EL
USA L GORECKI
RETIRED
SAMUEL J. COHEN
ROBEllT W. HUMPHlU!YS
OF COUNSEL
IlUGH I. L~O!.A
STEVEN L HAllGRlMSON
ERle WONG
PHlUP GOLDEN
NANCY L. BRANDT
Branch om,. - Mctud. CA
August 24, 2009
James K. Roberts, Esq.
Roberts & Elliot
Ten Almaden Boulevard, Suite 500
San Jose, CA 95113
VIA EMAIL &U.S.MAIL
Re: Medileaf - Medical Mariiuana DiS{>ensarv
Dear Mr. Roberts:
Weare in receipt of your letter of August 10, 2009 regarding the business license
application of Medileaf. In your letter you asked that we clarify the status of your client's
application based on a stateiIJ.ent made by the Police Chief in the August 3, 2009 City Council
study session that the business license application had been denied, and statements in the City's
previous letters to you.
In. my July 16, 2009 letter, I stated that the application was not approved, and I cited
Section 13.44(a) of the Gilroy City Code, which requires that an applicant for a proposed
business "shall show compliance with all federal, state and local laws and ordinances which
apply to each," noting that the Section appeared to prevent issuance of a business license to your
client due to federal law's prohibition of such a use. I invited your analysis as to the federal law
issue.
Though you commented on the issue, we did not receive any input from you that would
convince us that your client's proposed activities will comply with federal law. Moreover, we
have found nothing in the law, including the Compassionate Use Act, the Medical Marijuana
Program and in the cases you cite, that requires a City to permit a medical marijuana dispensary
within its city limits. We have no doubt that Section 13.44(a) constitutes a legitimate use of the
City's police powers under current, applicable state law and remains a valid requirement of the
City of Gilroy until amended or repealed by the City CoUncil.
WPAPPI799505.1
08180941706083
James K. Roberts, Esq.
August 24, 2009
Therefore, in order to once again clarify the situation at your request, the City under its
own code has denied your client's application since there was no showing of compliance with
federal law. Please note that the denial of your client's application is without prejudice to your
client's right to refile its application for a business license ifthere is a change in the law.
As you are aware from the City Council's direction to City staff at the August 3, 2009
study session, we are expecting that the City will in the near future consider a new ordinance
pencitting and regulating the use of a medical marijuana dispensary within the City limits, and if
so adopted, will also amend the business license ordinance to be consistent with the regulatory
ordinance.
I hope this clarifies the City's position on this matter. Please let me know if you have
any further questions or comments.
Sincerely,
BERLINER COHEN
y{~d; GcQ0w
LINDA A. CALLaN
E-Mail: linda.callon@berliner.com
. LAC:cds
cc: Police Chief Denise Turner
Sergeant Kurt Ashley
Kristi Abrams, Conununity Development Department
Tom Haglund, City Administrator
\VPAPP\799505.1
081809-04 706083
-2-
BERLINER. COHEN
SANFORD A. BERLINER
ANDREW L FABER
RALnl I. SWANSON
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ATTORNEYS AT LAW
TEN ALMADEN BOULEY ARD
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SAN JOSE, CALIFORNIA 95113-2233
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THOMAS P. MURPHY
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USA L GOR.I!CJ:I
Bf'1..I)I;bOfficr -Mcrctd. CA
OF COUNSBL
HUGH L. lSOU.
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ERIC WONG
PHlUP GOLDEN
NANCY L BRANDT
lUlTlllD
SAMUEL I. COHEN
ROBERT W. Il1Jtdl>HREYS
July 16,2009
James K. Roberts
Roberts & Elliot
Ten Almaden Boulevard, Suite 500
San Jose, CA 95113
I
Re: Medileaf - Medical Cannabis Dispensary
Dear Mr. Roberts:
Our client, the City of Gilroy, is in receipt of your letters of June 29, 2009 and July 2,
2009 as well as your cli~nt's business license application dated June 8, 2009. To clarify any
confusion due to having,:two applications submitted, Sergeant Kurt Ashley ofthe Gilroy Police
Department upon receipt of your letter of June 29,2009, called your client Goyko Kuburovich
and told him that the June 8, 2009 application was not approved for the same reason that the May
8,2009 application was not approved. Both applications were submitted without any
information that would have allowed the City to determine the legality of the proposed operation
ofMedileafCannabis Collective Dispensary. However, you provided some information for our
review with your June 29, 2009 letter, and we are in the process of reviewing that'information.
As you may be aware, the Gilroy Business License Application Form requires approval
by numerous City departments. Pursuant to Sec. 13.43 of the Gilroy City Code regarding
business licenses, those departments are asked to clear the license applications in part to verify
that the proposed uses of property meet City laws and policies, as well as State and federal laws
administered by each department. The police department has a vital role in such approvals; they
both clear the application and, if necessary, impose conditions and requirements for any such
approval related to their role in maintaining the peace and safety of our community.
A medical marijuana collective is not a typical business and the City of Gilroy has not
been asked to approve one in the past. Obviously, distribution of marijuana to persons other than
lLAC\797080.1
071609-04706098
James K. Roberts
July 16,2009
qualified patients or caregivers is a criminal act under both state and federal law, and any
distribution is against federal law. Section 13.44(a) of the Gilroy City Code states that:
All business, trades, professions and callings shall show compliance with all
federal, state and local laws and ordinances which apply to each and shall obtain
clearances set forth in section 13.43, prior to issuance of a business license.
It is difficult for the City to reconcile approval ofMedileafs application with the above-
cited provision ofthe Gilroy City Code, and the burden of proof is on the applicant. The City, at
a minimum, needs to assure itself that your client's proposed operation will operate under the
legal requirements of the Compassionate Use Act, the Medical Marijuana Program set forth in
California's Health and Safety Code, and the Attorney General's guidelines. In addition, we
have concerns as to whether the City or its officers and employees would have any liability under
federal law ifthis license is issued. We request your analysis as to how the City can issue this
license in light of federal law on the subject.
As you know, consideration of any permission to allow these facilities is a matter that
requires careful consideration. The City Council at this time is scheduled to conduct a general
study session with the Police Department on medical marijuana distribution in the City on
August3, 2009, from 6pm to 7 pm in the City of Gilroy City Council Chambers, and of course
the public may attend. Please check the City's website or with the City Clerk's office to confirm
that date and time later this month.
Meanwhile, we are reviewing the materials you have provided us and are trying to
discern if your rules and regulations for the dispensary at least meet State law dictates. If you
have further information that would aid in that effort, please do forward it to the City.
Thank you for your cooperation.
Very truly yours,
BERLINER COHEN
x:~~
LINDA A. CALLON
City Attorney, City of Gilroy
E-Mail: linda.callon@berliner.com
LAC:cem
cc: Police Chief Denise Turner
Sergeant Kurt Ashley
Kristi Abrams, Development Center Manager
Tom Haglund, City Administrator
\LAC\797080.1
071609-04706098
-2-
~iIrop Jolier 11gepartttttnt
((itp of @t1rop
AdmIn. (408) 846..{)310
Comm. (408) 846-0350
Records (408) 846-0300
Fax (408) 846-0339
7301 Hanna Street
Gilroy, California
95020-6129
DENISE J. TURNER
Chief of Police
June 16,2009
Goyko Kuburovich
Neil Forrest
2135 Darnis Circle
Morgan Hill, CA 95037
Re: MedUeaf - Medical Cannabis Collective Dispensary
Mr. Kuburovich and Mr; Forrest;
On May 8, 2009, you submitted a request for approval for a business license for MediIeaf
- Medical Cannabis CoUective DispensaJ:Y. Af~r considering your written request and
the information you provided to me in our follow-up meeting, we find that you have not
submitted enough information to show that your proposed business would meet state
'legal standards. Asa result, we cannot approve your business license.
Under CaliforniaHea1th and Safety Code, Section 11362.775, "[q]ualified patients,
persons with valid identification cards, and the designated primary caregivers of qualified
patients.. . who associate...in order collectively or cooperatively to cultivate marijuana for
medical purposes" are not subject to' criminal sanctions for such activity. California's
Attorney general has interpreted this statute as allowing only "statutory cooperatives" or
"collectives" for purposes 'of providing medical marijuana.
According to the Attorney General, a "statutory cooperative" must file articles of
incorporation and conduct its, business for the mutual benefit of its members.
Cooperatives must be "democratically controlled" and must not be organized "to make a
profit for themselves." According to the Attorney General, "cooperatives should not
purchase marijuana from or sell to non-members; instead they should only provide a
means for facilitating or coordinating transactions between members." .
The Attorney General has similarly opined that a collective should be an organization
that merely facilitates the collaborative efforts of patient and caregiver members _
including the allocation of costs and revenues. Like a cooperative, the collective should
not purchase marijuana from, or sell to, non-members; instead, it should only provide a
means for facilitating or coordinating transactions between members.
State law allows only patients and primary ,caregivers to grow, cultivate and possess
marijuana. The legal definition for a primary caregiver is a person who has consistently
PROTECTION OUR DUTY, PREVENTION OUR GOAL
'C)C'^_n...o_o^...~
Medileaf - Medica! Cannabis Collective Dispensary
June 16,2009
Page 2
assumed responsibility for a patient's care "independent of any assistance in taking
medical marijuana" (People v. Mentch, 45 Ca!. 4lh 274, 283 (2008). Clearly, you could
not be a primary caregivc::r for all of the proposed members of the enterprise. Similarly,
you indicated that you would receive your marijuana only from "certified growers". I
have no information that California provides for any "certification" of marijuana growers,
but even with such certification (if it exists), if you cannot show that such proposed
growers are legitimate members (either patients or primary caregivers) of the collective
or cooperative, then we believe your proposed business would not meet the legal
requirements of California's Health and Safety Code. In fact, the very term "Collective
Dispensary" indicates that your proposed business may be operated unlawfully; the
Attorney General has made clear that "dispensaries...are not recognized under the law!'
Based on your application and our follow-up discussion, I have not received any
information showing that your "Collective Dispensary" would operate legally under state
law. As a result, we cannot approve of yourapplic~tion for a business license for
Medileaf - Medica! Cannabis Collective Dispensary. If you have any questions
regarding the above, please contact Sgt~Kurt.Ashley at 846-0521.
Sincerely j
~'d~.
Denise J. Turner
Chief of Police
DT/nb
I, SHA WNA FREELS, City Clerk of the City of Gilroy, do hereby certify that the
attached Resolution No. 2009-42 is an original resolution, or true and correct copy of a city
resolution, duly adopted by the Council of the City of Gilroy at a regular meeting of said Council
held on the 16th day of November, 2009, at which meeting a quorum was present.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of
the City of Gilroy this 17th day of November, 2009.
(Seal)