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SAN BERNARDINO>> Superior Court Judge David Cohn brushed aside a request for an injunction and has allowed seven contested cannabis-related businesses to continue seeking city of San Bernardino approvals to operate.
The city’s approval process for these businesses came under fire in a lawsuit filed in February by Stephanie Smith, a Pacific Palisades real estate investor.
Smith’s Washington LLC was not granted a permit and her lawsuit alleges that multiple applications that did win approval failed to meet basic zoning criteria.
The lawsuit alleges an elaborate “pay for play” scheme which benefited businesses making contributions to the reelection campaign of former Mayor Carey Davis.
Cohen found that Ben Eilenberg, the attorney representing Washington did not demonstrate the necessary harm to those applicants not receiving permits to halt their progress through remaining hurdles on the path toward opening.
Eilenberg had argued, among other points, that the city has a limited number of cannabis permits and some of the companies which won permits did not meet general plan or zoning criteria.
Allowing these businesses to continue with their flawed applications is causing “irreparable harm” to businesses that met these standards but were not selected, he said.
On Feb. 21, during a specially called City Council meeting, 16 commercial cannabis licenses were awarded.
In his decision, Cohn sided with Daniel Shimell, an attorney representing San Bernardino, who said there was no “evidence of irreparable harm demonstrated to those who did not receive permits.”
The lawsuit filed by Washington “is asking the court to substitute its judgement for what the city staff is doing now” in reviewing the application process, Shimell said.
Granting the injunction could delay tax revenues from the sale of cannabis products from coming into city coffers and thwart the will of voters who approved Measure X, he said.
Measure X, approved in November 2018, caps the number of commercial marijuana business permits to one per 12,500 residents, allowing the city to authorize up to 17 permits.
“I understand why Judge Cohn ruled the way he did,” said Eilenberg of the March 29 decision.
“Judge Cohn is an excellent judge, and his goal is to make sure that the least harm is done until there is a full trial,” he said.
“I disagree with his analysis of the way we get to the least harm being done,” he added. “But I understand and respect it.”
Attorney Jim Penman, who represented Central Avenue Nursery LLP, which was awarded a permit, said he would hate to see the delay of anticipated marijuana related tax revenues come to San Bernardino and risk the irreparable harm of San Bernardino winding “up in bankruptcy again.”
Central Avenue’s permit was not contested by the Washington lawsuit. Among the partners in this venture is Wendy McCammack, a former San Bernardino city councilwoman.
Eilenberg said he will soon be receiving all documents related to the controversial city licensing process.
The city’s responses are due April 9 and HdL Companies, the firm hired by San Bernardino to establish guidelines for permit selection, are due the following day, he said.
A trial setting conference is scheduled for 8:30 a.m. on June 17 in San Bernardino Superior Court.
