Second Cannabis Club Sues City

Owner Says He's Unfairly Being Put out of Business

Paul Wellman (file)

In a lawsuit closely mirroring the complaint filed by owners of Green Well, the operator of Green Light medical marijuana dispensary has sued the City of Santa Barbara for rendering a decision that means death for his business.

The complaint — filed late last month in federal court — accuses city officials of blatantly trampling upon the constitutional and vested rights of Green Light owner Sefton Graham when they adopted a revised dispensary ordinance in June that retroactively made the location of his club illegal and subject to closure by January 29, 2011.

Graham’s attorney, Gary Nye, writes in the suit that the city’s decision to disallow pot shops on the 600 block of Olive Street — Green Light is located at 631 Olive Street — was “completely arbitrary,” and that the revised ordinance is therefore illegal as it applies to Green Light and should be set aside. The lawsuit also calls for an injunction on the November ballot initiative that would potentially ban all dispensaries in the city.

The case will be heard by a federal judge, explained Santa Barbara City Attorney Steve Wiley, because it alleges constitutional violations like interference with fundamental vested rights, lack of due process and equal protection under the law, and the taking of fundamental vested rights without just compensation. Green Well’s case has been kicked up to federal court as well. Wiley wouldn’t comment on either lawsuit beyond those details.

Graham, writes Nye, entered into a five-year lease for the 1,091-square-foot Olive Street space in mid November 2008 — after a city planner signed off on the location — with the option of extending the lease for another five years. Soon thereafter he applied for a Medical Cannabis Dispensary Permit, the guidelines of which were set out in the city’s original ordinance. Nye notes that Graham’s permit, eventually approved in October 2009, “did not include a reservation of right on the part of the City to revoke or impose further restrictions of the [original ordinance].”

In order to meet his permit’s requirements, Graham began renovating the property, sinking more than $250,000 into the project. He brought the building up to fire code and made it accessible to people with disabilities, and did everything from repaving the front walkway with specific material, to planting certain trees, to paying for a historical review of the building, to certifying himself and his employees as security guards.

With all the work completed, Graham opened Green Light’s doors in March 2010. Business has been good, writes Nye, but Graham was told in June by letter that the revised ordinance drastically changed things and that he needed to be out within 180 days.

Nye — who couldn’t be reached for comment — notes that the block is not within 600 feet of a school or park; the revised ordinance doesn’t allow shops that close. He also says that the six months Graham has to pack it in is not nearly enough time for him to recoup the costs put into getting Green Light up to snuff, nor does it take into account the amount of money Graham stood to earn over the course of his lease.

And just like Green Well’s lawyers, Nye criticizes the city for unfairly singling out Green Light for closure when the only dispensary that’ll be allowed to stay under the new ordinance and its three-store maximum has been in the throes of legal woes for some time: Pacific Coast Collective’s owner and operator, Jeff Restivo, is facing felony charges of cannabis cultivation and possession with intent to sell and, more generally, failing to follow Attorney General guidelines regarding the lawful operation of a pot shop.

Lastly, Nye criticizes the city’s purported plan to approve permits for two dispensaries that would replace Green Well and Green Light — Santa Barbara Patients’ Group and Compassion Center of Santa Barbara County — which have been operating without permits for years.


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