Cannabis · Fresno

Up in Smoke? Companies push to halt Fresno weed program over mistakes

As the City of Fresno works to get cannabis dispensaries up-and-running, one major hurdle remains: a growing stack of lawsuits waged by companies denied licensing from city officials.

While 20 companies were ultimately awarded licenses after the appeal process shook out, Catalyst, Haven, Perfect Union and SKG Trinity were left on the outside looking in and filed lawsuits over the last several months. 

For the companies that are moving forward, the city recently announced that they have four months to complete the conditional use permit process. 

The Artist Tree, located in northwest Fresno, is the only business to complete the conditional use permit process so far. 

There is one license remaining for the city to award, which opened up in February when the council appealed the preliminary approval for social equity applicant High Speed Healing, which was targeting a location in Chinatown. 

Since that time, the city press the reset button on the process and will address changes to the cannabis ordinance before awarding the final license. 

In the meantime, here is a look at the four lawsuits against the city: 

Catalyst-Fresno LLC v. City of Fresno

Catalyst ranked fourth in District 1 in the city’s scoring process and filed its suit on the grounds that the other applicants in the district lied on their applications. 

At the center of Catalyst’s claims is that the local owners for the other businesses are not actually majority owners as stated in the applications. 

One such target was Authentic 559 and former Fresno State Bulldog and MLB pitcher Matt Garza. 

But Catalyst’s legal attempts failed to make an impact in the appeal process as Garza and Authentic 559 were awarded preliminary approval last December and kept the license after a council appeal hearing last month. 

The court will hear a motion to strike on April 13 from Authentic 559’s legal counsel. 

Haven #20, LLC v. City of Fresno

Haven, which would be located in District 3, initially received preliminary approval for a license. 

But Council member Miguel Arias appealed the decision, and during the hearing last October the council denied the license to Haven. 

In response, Haven filed a lawsuit against the city to fight the appeal and asked the court to prevent the other companies in the district that were awarded licenses from completing the process and opening up. 

Haven contends that Arias did not follow the city’s own cannabis ordinance by filing his letter of appeal 23 days after the preliminary approvals were awarded, when the ordinance states that such an appeal must be filed within 15 days. 

“The city’s Decision is unlawful, erroneous, and an abuse of discretion because the City’s appeal hearing did not proceed in the manner required by law,” the lawsuit reads. 

Along with the issues surrounding the timeliness of Arias’ appeal filing, Haven claims that the city did not provide adequate notice to the dispensary of the reasons for the appeal, the city violated its ordinance by not giving Haven the opportunity to be heard by an impartial fact-finder. 

Haven is also seeking the court to rule that it was denied a fair appeal trial and to reverse the appeal decision. 

Perfect Union v. City of Fresno

Perfect Union suffered a blow in court this week when the court denied the dispensary’s request that the city’s entire cannabis application process be halted. 

The rest of the lawsuit is still pending, however, with a hearing scheduled for Aug. 17. 

Perfect Union, which would have been located in north Fresno, was not granted a preliminary from the city because and claims the city did not accurately review its application. 

In the lawsuit, Perfect Union said it lost points in the scoring process for not disclosing the owners’ educational history even though such information is listed in the resumes that the dispensary submitted as part of the application. 

“This demonstrates that not only are Respondents (the city) not disclosing their true requirements, but Respondents also failed to properly review Perfect Union’s Application,” the lawsuit reads. 

Perfect Union also claims the city did not correctly score its application for answers regarding social equity business support and for not providing a satisfactory definition of what a living wage is. 

The dispensary is seeking the court to force the city to publish “a complete and clear list of all criteria to be used” in the application and to have the whole application process restart or simply award Perfect Union with a license. 

SKG Trinity, LLC v. City of Fresno

SKG Trinity was targeting a location just south of the Tower District in District 3 and was a social equity applicant that was not selected for preliminary approval last year. 

Similar to Perfect Union, SKG claims that the city did not disclose that points would be awarded during the application process for disclosing the owners’ educational experience. 

“SKG was shocked to see that the CITY had requirements that the CITY did not disclose to SKG or the public during the application process,” the lawsuit reads. “For example and without limitation, in the application procedure guidelines… the CITY did not disclose that points would be given for owners’ education and retail business experience.” 

The dispensary also claims the city only gave points to owners who had previous regulated cannabis experience and discriminated against those who did not. 

SKG also claimed that the city failed to properly vet applicants to ensure that the majority owners of the social equity dispensaries actually qualified under the social equity rules. 

“This misstep ultimately led to the award of the preliminary business permit approvals to individuals or businesses that are not truly ‘social equity’ applicants, but instead were funded and operated by big businesses and/or out-of-state owners, in contravention of the social equity purpose as promulgated by the [Fresno Municipal Code],” the lawsuit reads. 

SKG is seeking the court to order the city to vacate all licenses that were awarded. 

A hearing date has not been scheduled yet.

Daniel Gligich is a reporter for The San Joaquin Valley Sun, focusing on Fresno State Athletics and the southern San Joaquin Valley. Email him at daniel.gligich@sjvsun.com.