By Art Cosgrove
Oregon Cannabis Connection
On February 27, 2017, the Oregon Circuit Court for Lincoln county will hear arguments on case 16CV16925, which will pit the county against Cindy George, Going Green West Coast, Inc. and their landlord, Craig Kelson. The trial could send chills through the state’s medical marijuana system, for which many have already sounded the death knell.
Lincoln county, led by a board of commissioners, insists that Going Green, a medical marijuana dispensary licensed by the Oregon Health Authority (OHA), is operating in violation of zoning laws, and previously operated in violation of a legal moratorium. George and Kelson counter that the county is acting in bad faith, and that there is a conflict of interest with Commissioner Douglas Hunt, which is the actual cause of the dispute. A victory for the county would see the dispensary closed permanently and could possibly be used as future precedent for to allow county commissioners to wield power over state-certified dispensaries.
A Property with a History
When Cindy George was starting the Going Green West Coast medical marijuana dispensary in February 2014, there were no laws on the books in Lincoln county governing dispensaries. She and her son sought a good spot to open their operation, and settled on a property at 41 Olalla Road in Toledo.
They contacted and consulted with the Lincoln county planning commission . The area, in unincorporated Lincoln county, was zoned as a tourist-commercial area, or C-T, and, as such, there should have been no issues with siting a medical dispensary in that location. If only things were that simple.
The story goes back to 1982, when the property’s owner, Craig Kelson, got a conditional permit to use the property, then zoned as rural residential (RR-5), for a small business that rented recreational watercraft for use on the Olalla reservoir. In spring of 1983, Kelson lobbied the planning commission to officially change the zoning of his property to C-T, ostensibly so he couldsell watercraft, snacks and other retail goods from the site. The commission turned him down, but in August of the same year Kelson scored a victory when his appeal to the Lincoln county board of commissioners fell on sympathetic ears. They overruled the planning commission, citing the need for more recreational economic activity on the water. Kelson was granted his zoning change, and ran his businesses off and on over the intervening years.
A New Business Moves In
After the 2013 Oregon legislative session, when medical dispensaries were authorized statewide, George leased the property on Olalla Road from Kelson. She and her son immediately began the permitting and inspection process with the Oregon Health Authority (OHA). They planned to open Going Green West Coast as soon as they were legally able, on March 1, 2014. At the time of the lease, George and Kelson had not discussed any requirements from Lincoln county, above and beyond the normal opening of a business.
This is an important point for George. She asserts that she was never informed of a requirement on the part of the property owner to obtain approval from the board of commissioners for a change of business on the site. The commissioners are relying on a clause in the Lincoln county zoning code, which they claim Kelson was bound to as a result of the zone change awarded to him in 1983. According to this rule, 1.1245 Intent to Rezone:
“(4) Site Plan: The Board may require under a resolution of intent to rezone a site plan which shall be binding upon the property. Upon approval of the Board, property having an approved site plan under these provisions shall be plainly marked as “subject to approved site plan” on the official zoning map of Lincoln County. Any approved site plan may be amended or a variance therefrom obtained, or the property may be released from the restrictions of such site plan by resolution of the Board on recommendation from the Planning Commission after a public hearing as set forth in LCC 1.1250. No other changes shall be made constituting a departure from the approved site plan except by amendment or variance as herein provided unless the property has been released from the site plan.”
Kelson’s attorneys will likely vigorously challenge this on the grounds that it’s not within the board of commissioner’s rights to reserve approval over the business of private citizens that doesn’t require a zone change in perpetuity. Moreover, it appears this rule had not been enforced against Kelson in the intervening 33 years—as the business on the property changed several times.
A Conflict of Interest
One theory held by George, Kelson and their attorneys is that the county is unfairly targeting Going Green for another, more nefarious, reason. Commissioner Douglas Hunt, from the Lincoln county board of commissioners, owns the property just 500 feet down the road from the dispensary. The allegation made by George in her response to the legal complaint from the county is that Hunt is acting in favor of his perceived interest in terms of property value, and perhaps other personal reasons.
“One of the Commissioners had a conflict of interest. He’s a neighbor, and he should have recused himself when they tried to outlaw it (Going Green),” says David Moule, attorney for Cindy George and Going Green. “We believe it’s because of a long time animosity between one of the commissioners that lives next door and the owners of the property from whom Cindy rents. He doesn’t like the idea of a dispensary, and we think that she’s targeted because of that.”
On February 26, 2014, mere days before Going Green was set to open, the board of commissioners issued ordinance #472, which created a temporary moratorium on the opening of dispensaries in unincorporated Lincoln county until the end of the year. At the time, a concept was being hotly debated by counties across the state;: Shouldn’t they have the right to prevent dispensaries in their counties despite the legalization at the state level? Gov. Brown and the Oregon legislature seemed to agree with these counties, and passed SB 1531, a bill that allowed counties and municipalities to issue moratoria until May 1, 2015—as long as they got their rules on the books by May 1, 2014. erein lies the crux of George’s case against Lincoln County: At the time they issued their ban on medical marijuana dispensaries, citing uncertainty about the laws and future legalization of recreational cannabis, it would seem they were not legally allowed to do so.
Ordinance #472 was issued three weeks before SB 1531 gave the county the right to issue it. The board of commissioners clearly recognized this was a problem because at an April 2, 2014, board meeting they passed #475, which amended #472, and pushed out the date of the ban from the end of the year until May 1, 2015, as prescribed in the senate bill.
“The ordinances were not validly adopted. When they initially did something too soon, declared there was an emergency, they realized they didn’t have the authority to do it at that time and then they did it again,” says Moule of the amended ordinance, which he holds is invalid from conception, and therefore remains invalid even after amendment.
Nonetheless, under the advice of their previous attorney, Paul Loney, George and her partners temporarily closed down Going Green in observation of the moratorium. Their belief at the time was that the county was genuine in their concerns, and that the issue at hand was a political issue regarding the future of medical marijuana. They didn’t believe there was anything else at play.
“This was an amazing program when it began,” says George of the first months of Going Green’s operation, continuing, “we had all this beautiful edible medication—medicines that people had been [providing for sick people] for many years, as we all know. It was really an exciting time, and everything was tested. We actually had a testing facility in our building.”
In retrospect, George believes that closing the dispensary wasn’t the right move. It seemed more and more like the roadblocks they faced had nothing to do with the politics of medicinal marijuana or local economics, but instead, they were because of the location of their dispensary next door to a county commissioner’s home.
With a change of representation came a change of strategy for Cindy George. Going Green threw the doors back open. “Lincoln County adopted an ordinance prior to even being legal. The governor hadn’t even signed the bill,” says George of their decision to re-open in June of 2014.
They continued to operate without major issue, with George appearing at several commissioners’ meetings to voice her position on the dispensary’s value to the community. She often brought patients, including her own daughter, to testify on their need for medical marijuana and their dependence on Going Green to allow them to get their medicine locally and not have to drive long distances.
But the board continued to take a hard line on the moratorium, despite its shaky legal foundation, and would not award an exception to the moratorium to allow Going Green to continue serving the community. On October 16, 2014, the Lincoln county sheriff’s department appeared at Going Green with a search warrant in hand, to deduce solely, according to the county’s legal filing, whether or not George was still operating a dispensary with the approval of the property’s owner, Craig Kelson. The county advised Kelson of their opinion that the dispensary was operating in violation, but claim he did nothing to remedy the situation. They also advised him of their intent to seek legal and financial redress.
In April 2015, just ahead of the expiration of the moratorium, Lincoln county rescinded ordinance #475 (the moratorium itself) and replaced it with #479, outlining rules for the establishment of medical dispensaries in unincorporated Lincoln county. While this may have been a positive development for some dispensary hopefuls in the area, it contained a poison pill for Going Green: The new ordinance made dispensaries illegal in the C-T zone where George’s business sat. This zone type was previously open to almost any kind of business.
This is where the standoff has been since then, with George and the Going Green staff doing everything in their power to get the board of commissioners to change their zoning decision, while continuing to operate.
George’s defense hinges essentially on four things: 1.) the “Intent to Rezone: Site Plan” requirement from the 1983 re-zoning should not be held against Going Green, as they had no knowledge and were never informed of it by the owner or planning commission when they were working with them on opening the location; 2.) Commissioner Hunt’s alleged conflict of interest; 3.)The validity of the county’s zoning complaint against them, because the zone change occurred long after they had begun occupation of the location, thus, they should have been grandfathered and 4.) The validity of the County’s attempted moratorium and regulation of medical dispensaries.
Moule cites sections 58 and 59 of Oregon Measure 91, which legalized recreational use of marijuana, as providing an additional layer of protection to the state’s awarding of licenses to dispensaries from interference from counties and municipalities:
“SECTION 58. Marijuana laws supersede and repeal inconsistent charters and ordinances. Sections 3 to 70 of this Act, designed to operate uniformly throughout the state, shall be paramount and superior to and shall fully replace and supersede any and all municipal charter enactments or local ordinances inconsistent with it. Such charters and ordinances hereby are repealed.
SECTION 59. Authority of cities and counties over establishments that serve marijuana. (1) Cities and counties may adopt reasonable time, place and manner regulations of the nuisance aspects of establishments that sell marijuana to consumers if the city or county makes specific findings that the establishment would cause adverse effects to occur. (2) The authority granted to cities and counties by this section is in addition to, and not in lieu of, the authority granted to a city or county under its charter and the statutes and Constitution of this state.”
In this interpretation of the code, awarding of the license by OHA supersedes a moratorium by the county, unless based on some sort of nuisance to the citizenry. Because the location is not in a densely populated place and is surrounded by trees, and no complaint of that kind was ever lodged against them, this can’t be the reason for the county’s vigorous resistance of the dispensary’s operation. Additionally, the county has never asserted that the dispensary was a nuisance.
Day in Court
At this point, it seems the ship has sailed on George and the county reaching a compromise. The issue will be settled in court, with both sides seeking legal fees and fines/damages. The county commissioners all declined to comment for this article, on advice from their legal counsel.
“We filed a counterclaim saying, in addition to our defense, that the government is taking property rights without justly compensating her for it,“ said Moule of his client’s response to the lawsuit. “If they’re successful in putting her out of business, she loses money and the county should pay her for that.”
George is optimistic and commenting about the case—but far from sure of the outcome. “You know they go through all this. Just to target us. Nobody else. They shouldn’t have a leg to stand on. I’m hoping it turns out on the positive side.”
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