The same real estate developer who’s suing San Bernardino over its marijuana ordinance just filed suit against neighboring Colton, claiming that portions of the city’s cannabis rules are unconstitutional.
If successful, the legal claims from Stephanie Smith — self-described as the biggest cannabis landlord in California — could affect similar cannabis ordinances in dozens of cities across the state.
Smith, of Pacific Palisades, filed the latest lawsuit Thursday on behalf of B Street Equities, a Riverside company that owns warehouses popular with the cannabis industry.
Smith’s lawsuit argues that Colton’s decision to only allow two marijuana cultivation facilities creates a monopoly that’s ripe for cronyism. The suit also claims a requirement that residents must register if they want to grow marijuana at home as allowed under Proposition 64 violates medical privacy laws and rights against self incrimination.
“The city has proposed a triple-whammy of bad law,” Smith said. “This is an illegal and offensive ordinance.”
Colton spokeswoman Jacqueline Shook said Thursday that the city had no comment on the recently filed suit.
State law grants cities the authority to regulate or ban cannabis businesses as they choose. Two-thirds of cities block all businesses, and many others have placed caps on the number of operations allowed in their borders.
But Smith, who owns industrial properties in Colton, claims the city’s two-license limit would “create an unfair duopoly.”
“Colton’s ordinance has no criteria as to how applicants will be selected or rejected,” she said. “(That) strongly indicates a give-away to political cronies. Prop. 64 expressly prohibits this kind of corrupt king-making.”
The lawsuit also alleges a potential violation of due process, since Colton’s ordinance says city officials can declare any part of an application a “misstatement” and then reject the applicant without a process in place to correct or appeal the decision.
Smith’s lawsuit is also critical of Colton’s policy for growing marijuana at home.
Prop. 64, passed by 57 percent of California voters in 2016, says cities and counties can’t completely prohibit residents 21 and older from growing up to six marijuana plants per household. But state law does say local governments can enforce “reasonable” regulations on in-home marijuana cultivation.
Check out our updated map showing shops licensed to sell recreational cannabis in California.
A statewide database of local marijuana policies created by the Southern California News Group shows that nearly three-quarters of California cities have banned all outdoor marijuana gardens. And 71 cities — including Colton — require residents to register or get permits if they want to grow plants indoors.
Fontana is already being sued by the American Civil Liberties Union and Drug Policy Alliance over its restrictive home permitting policy.
Colton makes residents who want to grow marijuana at home fill out a four-page application, including agreeing to allow multiple agencies to inspect their home and pay a $335 fee. City officials said no one had applied for one of the permits.
Smith’s lawsuit says an ordinance that would force residents who grow medical marijuana to register with the city violates the Health Insurance Portability and Accountability Act, the privacy law better known as HIPPA. It also alleges that the city’s ordinance will effectively create a database of people who are violating federal law, which it claims is a violation of the Fifth Amendment.
Smith made headlines in late 2017 when San Bernardino police raided her home and seized nearly 25,000 marijuana plants at three locations she owned. None of those locations was licensed for marijuana cultivation. She was not arrested, though eight men at the sites were booked on suspicion of illegally growing marijuana.
In March, Smith sued San Bernardino, citing the same monopoly concern since the city allows 17 marijuana businesses in its borders. That suit also claims due process violations over a rule blocking licenses for applicants with prior cannabis-related convictions.
Smith has submitted cannabis-related initiatives for the November ballot in several cities, including Colton, that would replace existing policies with rules that she feels are more friendly to the industry.
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