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Medical marijuana: Buena Vista lawsuit first to target Department of Revenue: More to come?

jeffrey gard photo cropped.JPG
Jeffrey Gard.
Medical marijuana in Colorado has generated plenty of lawsuits, with more legal action possible in a health department case involving limits on doctors who can recommend MMJ. But the Department of Revenue, which is in charge of writing the rules for two new medical marijuana laws hadn't been targeted until late last month. Attorney Jeffrey Gard explains the issue.

Gard is suing on behalf of a medical marijuana dispensary in Buena Vista. According to him, the entrepreneurs behind it, Daniel Hamme and Clarice Basti, "worked really hard to get the town's approval -- and the town was skeptical. But these guys proved to be top-flight business people." Buena Vista officials were so impressed, Gard maintains, that they decided to work with Hamme and Basti rather than put forward a ballot measure to potentially ban dispensaries, as so many other municipalities did this year.

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Buena Vista Chamber of Commerce
Beautiful Buena Vista during the holidays.
But bureaucracy slowed down the process, Gard maintains. "It was on the docket for a town council meeting on July 27, but it got postponed until August 10" -- after what the Department of Revenue's Matt Cook viewed as the August 1 deadline established by the Colorado Medical Marijuana Code for such businesses to complete the proper forms and pay the required fees.

However, Hamme and Basti moved forward on the advice of their attorney at the time, who believed the August 1 deadline wasn't as set in stone as others felt. They were approved by Buena Vista officials on August 10 and submitted their paperwork to the Department of Revenue on September 7. At that point, Cook and the DOR rejected them for missing the August 1 deadline and told them their application would be tabled until next summer, following the expiration of a one-year waiting period.

That's unjustified in this case, Gard believes, due to ambiguity in the code's language. He points to the following passage:

On July 1, 2010, a person who is operating an established, locally approved business for the purpose of cultivation, manufacture, or sale of medical marijuana or medical marijuana-infused products or a person who has applied to a local government to operate a locally approved business for the purpose of cultivation, manufacture, or sale of medical marijuana or medical marijuana-infused products which is subsequently granted may continue to operate that business in accordance with any applicable state or local laws. [Emphasis added.]

To him, this section gives equal weight to applicants and those who'd been approved prior to July 1 -- and Gard feels this next passage applies to both:

To continue operating a business or operation as described in paragraph (a) of this subsection (1), the owner shall, on or before August 1,2010, complete the forms as provided by the Department of Revenue and shall pay a fee, which shall be credited to the medical marijuana license cash fund established pursuant to Section 12-43.3-501.

Furthermore, he thinks Hamme and Basti should have been approved by the DOR because they filed within thirty days of receiving Buena Vista's blessing, as established by this sentence:

An owner issued a local license after August 1,2010, shall complete the forms and pay the fee pursuant to this paragraph (b) within 30 days of issuance of the local license.

In some ways, Gard regrets having to sue the department, given what he considers to be a positive working relationship with Cook. Indeed, he gave Cook a heads-up that the suit was coming. But he sees no reason why his clients should have to sit idle for an entire year. "When I looked at the issue," he says, "there's no way to argue that one filing deadline is any better than another one. And Matt selecting August 1 for all businesses really ignores the thirty-day approval."

As Gard points out, the suit "is the very first attempt to challenge the interpretation of the statute by the Department of Revenue -- and there are other potential challenges out there," including the presumption that a two-year residency requirement applies to employees as well as owners. And that's not to mention the prohibitions aimed at those with past felony convictions, patient-per-caregiver limits "and a lot of macro issues that a lot of lawyers have been talking about suing on," he says.

In Gard's view, "we need something more than the People vs. Stacy Clendenin to guide this industry. We need some interpretation not just from lawyers and Matt Cook, but also from the courts."

Page down to read the entire lawsuit:


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