The city of South Lake Tahoe is suing a marijuana dispensary for $1 million, claiming the business violated federal laws.
The city of South Lake Tahoe, California, is being sued by a marijuana shop after the city council withdrew its cannabis and business licenses for failing to open on schedule – a delay the company blames on the COVID-19 outbreak.
Perfect Union SLT received one of two microbusiness cannabis licenses in November 2019, as part of a deal that allowed it a year to operate.
According to the Tahoe Daily Tribune, the cannabis company claims in the complaint that the pandemic caused the scenario that prohibited them from reaching the deadline.
“The world rapidly and irreversibly altered owing to the COVID-19 pandemic only weeks after the Development Agreement became effective on February 13, 2020,” the complaint says. “Both business and construction in California in large part came to a grinding stop in March 2020.”
“Furthermore, the COVID-19 epidemic sparked unprecedented demand for development in the South Lake Tahoe area,” according to the complaint.
After the year deadline passed, City Attorney Heather Stroud ordered the business 30 days to cure or begin the process of curing their default, which they failed to do, according to her.
The licenses were revoked by the council unanimously in June. The decision was overturned weeks later, with Mayor Tamara Wallace giving the lone opposing vote despite backing the revocation previously.
Wallace expressed sympathy since the epidemic caused delays in a major building project at her company. However, she pointed out that all of the other cannabis firms that had been granted licenses had opened on schedule.
The city is accused of breach of contract in a complaint filed in El Dorado County Superior Court last month. It wants a court to order the city to respect its development agreement and compensate the business for lost revenues as a result of the dispute.
Perfect Union’s legal counsel, David Wolfe, said the delay was justified under the development agreement, which allows “delay beyond a party’s reasonable control due to (a) calamities, including without limitation earthquakes, floods, and fire; (b) civil commotion; (c) riots or terrorist acts; (d) strikes or other forms of material labor disputes; (e) shortages of materials or supplies; or (f) vandalism.”
COVID, he said, was an acceptable delay.
Officials with the city said they don’t comment on ongoing lawsuits.
