CA: Moreno Valley Is Fourth Inland City To Be Sued Over Marijuana Rules

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Photo Credit: Robert Gauthier

A Pacific Palisades real estate developer who has sued San Bernardino, Colton and Hemet over marijuana measures is taking Moreno Valley to court, too.

Stephanie Smith filed suit Monday, May 7, in Riverside Superior Court on behalf of Industrial Partners Group. The lawsuit alleges Moreno Valley’s marijuana law is unconstitutional because it requires people who work for cannabis enterprises to get a city permit.

“We have made it our mission to go after municipalities that have crafted illegal ordinances,” Smith said by phone Friday, May 11.

An attorney defended Moreno Valley’s approach to regulating commercial cannabis operations.

“We feel that the lawsuit is not meritorious,” said Moreno Valley City Attorney Martin D. Koczanowicz. “We feel strongly about the validity and constitutionality of the ordinance.”

He said the city will ask a judge to toss the suit out.

The suit targets a law the city adopted in March, setting the stage for up to 27 marijuana businesses, including eight dispensaries, to open in Moreno Valley later this year.

That set in motion an application period for prospective businesses — there are no legally permitted shops now — that opened April 2 and closed Friday, May 11.

More than 20 applications had been submitted as of Thursday night, Koczanowicz said, and several more were expected to be turned in before the Friday deadline.

The lawsuit focuses on the permit requirement.

“The city is demanding that every worker employed by the facility, including the contractors, accountants, janitors, administrators and lawyers, obtain a permit,” Smith said in a statement.

Ben Eilenberg, a lawyer for Smith, said the provision would create a list of Moreno Valley cannabis workers and people who service the industry. Because marijuana remains illegal under federal law, he said, such a list would expose them to potential harassment should the federal government crack down on cannabis production.

“Right now, because of the conflict between federal law and state law, we are in a weird situation,” Eilenberg said.

Smith added: “Getting a paycheck shouldn’t require that you implicate yourself in a federal crime.”

Eilenberg said Smith also is suing over ordinance language that empowers the city to withhold a permit from a person deemed “dishonest.” The vagueness of that term, he said, gives enormous power to the city and invites corruption.

The lawsuit is the latest in a flurry of challenges.

In April, Smith sued Colton, alleging its rules would create a cannabis monopoly. Her San Bernardino challenge was based on the same argument.

She sued Hemet in a sort of preemptive strike, Eilenberg said, because a proposition headed for the November ballot would lock in a monopoly for existing marijuana businesses operating in town without permission.

Hemet City Attorney Eric Vail said Friday that there are two competing cannabis measures being pitched. One has qualified for the ballot; the second has not. Both were privately initiated without city involvement.

“The attorney for the group behind the second measure has told me they plan to challenge the first measure,” Vail wrote in an email. “To do that they technically have to name the city/city clerk as parties, but any defense will need to be mounted by the proponents of the first measure who would be the real parties in interest in such a suit.”

Eilenberg said Smith isn’t opposed to regulation, but determined to make sure ordinances are appropriate. And many have been passed in recent months across the Inland region.

“The Inland Empire is primed to be one of the hubs and centers for commercial cannabis for California and the nation,” he said. “And, so, getting the laws right is important.”

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