Judge denies request to freeze Santa Ana marijuana lottery winners; city can have 20 dispensaries


SANTA ANA - A judge on Friday denied a request to temporarily freeze the city of Santa Ana’s efforts to approve the county’s first legal medical marijuana stores, despite accusations that the process for choosing the winning dispensaries was unfair.

The decision by Orange County Superior Court Judge David R. Chaffee allows the city to move forward with approving licenses for 20 dispensaries that were chosen during a lottery earlier in the year.

Santa Ana Mayor Miguel Pulido said Friday he was pleased by the judge’s ruling. He noted that Santa Ana Police Chief Carlos Rojas, who is required to sign off on the legal dispensaries, has several applications on his desk awaiting final approval.

“I believe the process was completely transparent," Pulido said, noting that the lottery was run by an outside law firm.

The injunction against the city moving forward with the approvals was requested as part of a lawsuit filed by three men who want to open a medical marijuana business in Santa Ana, but who were not among the lottery winners.

They claimed the lottery was rife with fraudulent actions such as ballot stuffing. John Mendoza - who filed the lawsuit along with Ivan Nathanson and Tarune Dillon - said some of the winners of the lottery turned in multiple applications or failed to take the proper steps of forming a legal entity before being chosen.

“We just want a level playing field," Mendoza said. “Let’s do this fairly."

The men’s attorney acknowledged that the judges ruling was a disappointment, but said it wouldn’t dissuade them from continuing to challenge the lottery in court.

“It’s a setback for us, but our clients are going to move forward and not give up,” said Tin Westen of the Rallo law firm. “We were able to display the flaws in the process. We definitely got the city’s attention.”

Voters last November passed Measure BB, which allows the city to grant business licenses to operate dispensaries. More than 600 applicants applied, bringing in more than $1 million in revenue from fees to apply. 

The 20 entrepreneurs chosen through the lottery - including rapper Louis Freese, better known as B-Real of Cypress Hill - are being vetted by police. No licenses have yet been approved.

In the meantime, the city’s efforts are under attack from a variety of legal fronts, with lawsuits filed in both the superior court and federal court challenging the lottery and measure BB itself, which opponents argue was too restrictive as to where dispensaries can be located.

A May raid by police on the Sky High Holistic collective dispensary also drew headlines, when footage from one of the shop‘s security cameras showed officers with ski masks forcing people to the ground, one officer seemingly eating a food product from the shop, and another officer disparaging a collective member who has an amputated leg.

Chaffee’s ruling came several hours after a packed Friday morning hearing at the Orange County Superior Courthouse in Santa Ana. More than three dozen people attended the hearing, which the judge noted is far more than usually show up for civil cases.

The judge earlier this month approved a temporary restraining order, which halted the city process until there was time to hear arguments about a preliminary injunction.

Westen pointed out that only five applications were thrown out prior to the lottery, with applicants who didn’t meet the criteria not vetted before being chosen among the 20 winners. She said that since no permits have been issued yet, it is a “crucial juncture” in the process.

“Once the permits are issued, we can’t undue that,” Westen told the judge. “We should go back and have the trial, then decide and move forward."

Attorney Patrick Bobko, who represents the city, said there was a short period of time to vet the applications before the lottery took place. The more detailed background checks are taking place now, he added.

“They said ‘look, we aren’t going to throw anyone out of the process now,“ Bobko said of the run-up to the lottery. “So everyone got in who could meet some very generalized qualifications."

He described the move to approved medical marijuana dispensaries as Santa Ana’s effort to “curtail the chaos.”

“I am not aware of anyone who has successfully done that in this area yet,” Bobko said.

During the hearing, the judge seemed unconvinced that there was any harm in allowing the city to move forward with the process, despite the lawsuit. If the lawsuit prevails, the judge argued, the city could just take the licenses back.

“Couldn’t the city very well say ‘your license is revoked, so you are out of business? They could even, as we’ve seen on the news, send a whole lot of police officers down there,“ Chaffee said, drawing laughs from the courtroom audience.

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