Richmond dispensary sues over alleged monopoly on medical marijuana

Jars of medical marijuana are on display at a Richmond dispensary. File photo by Natalie Jones.

Jars of medical marijuana are on display at a Richmond dispensary. File photo by Natalie Jones.

After more than six years spent trying to open up shop, Richmond Compassionate Care Collective, a medical marijuana dispensary, has filed a lawsuit alleging that Richmond’s three existing dispensaries conspired with community organizers and a city council candidate to monopolize the local medical marijuana trade.

Richmond Compassionate Care Collective (RCCC) first obtained a license to sell medical marijuana in 2009. In the years that followed, it encountered zoning complications and opposition from residents that thwarted its attempts to secure a property. These obstacles were the product of collusion in violation of the Cartwright Act, a state antitrust law, said RCCC’s attorney, Ronald Foreman.

“The other licensees ganged up and did everything they could to prevent one of their competitors from being able to open and conduct business,” said Foreman, a partner at San Francisco-based Foreman & Brasso.

The complaint, filed in the Contra Costa County Superior Court on July 22, names local dispensaries Richmond Patient’s Group, Holistic Healing Collective and 7 Stars Holistic Foundation, six dispensary employees or advisers, community organizer Antwon Cloird, and then-president of Hilltop District Neighborhood Council Cesar Zepeda, who is running for city council this year.

The complaint alleges the defendants “conspired to restrain trade, fix prices and monopolize the cannabis dispensary business in the City of Richmond.” It also alludes to secret meetings and private real estate agreements designed to prevent RCCC from moving in. The lawsuit alleges that a number of the defendants held regular meetings at Cafe Pascal in Richmond to conspire against RCCC.

Lawyers for the defendants firmly denied these claims.

“My clients had no involvement whatsoever, direct or indirect,” said the attorney for defendant Richmond Patient’s Group, Barry Himmelstein of Himmelstein Law Network in Emeryville.

Speaking after a campaign event Thursday, Zepeda too denied the lawsuit’s allegations.

“It’s a frivolous lawsuit,” Zepeda said. “I think they’re after everyone and my name just got caught up in it because I was president of the neighborhood council at the time.”

According to court documents, the last location RCCC attempted to lease was a building on the 3100 block of Klose Way in the Hilltop District. Because the city council rejected the dispensary’s proposed move to a prior location due to community opposition, RCCC proprietors sought out Zepeda’s group in order to address neighborhood concerns in advance, the complaint states.

However, at the May 19, 2015 city council meeting at which RCCC’s move to the Hilltop area appeared on the agenda, about half of the 70-some people who lined up to speak during the public comment period voiced concerns about the dispensary.

Judith Herman, a Hilltop Village resident, said she wasn’t against medical marijuana—she’s a patient herself, she said—but that her neighborhood has enough dispensaries. “We already have two and, when I go there to buy my stuff, there’s never a line,” she said.

Herman added that RCCC paid community members “$50 a head” for favorable comments, which elicited objections from speakers in favor of opening the dispensary.

Public comment continued for nearly two hours, ending with councilmembers voting to deny RCCC’s application to move onto Klose Way but allowing the dispensary more time to find an alternate location.

RCCC’s lawsuit now alleges that opposition to the dispensary on display at the meeting was contrived and paid for by the defendants.

Himmelstein said his clients had nothing to do with community opposition to RCCC’s choice of location, and that this same issue had previously stymied RCCC’s efforts, when it attempted to secure a location in the Santa Fe neighborhood in July 2015.

The community opposition to RCCC’s Santa Fe and Hilltop locations was “sincere, community-based and widespread,” said Himmelstein, “and the city council denied those applications based on that legitimate and widespread opposition.”

Himmelstein said the dissent voiced at the city council meeting was an example of “democracy in action.” Citing the First Amendment and the right of citizens to petition government, Himmelstein said that he expects the court to dismiss the case.

Foreman called this defense “nothing more than a sham.”

“They don’t have the right to violate the law,” he said.

Lawyers for both the plaintiff and defendants indicated that this complaint could be the beginning of a legal battle that may continue for months.

The RCCC’s suit contends that the dispensary cannot afford to spend this time missing out on a “billion-dollar industry”— “the Green Rush” that is now considered “California’s next Gold Rush.”

2 Comments

  1. Robin Terry

    I know these accusations are true. I have a sellers permit and was denied a business license verbally. My application for delivery of medical cannabis was never put into the data base a Richmond City Hall nor the Richmod Police Dept. Both departments would not submit my application. I have lived in Richmond Ca 51 years, I am a black woman I know about the long Relationship with 7stars also Known as Goldenrul Market ppl and Richmond City. Allowed to open most liquor and grocery stores now allowed to take over the cannabis industry by the city of Richmond ca
    Sincerely
    Hilaluya Cannbis

  2. Robin Terry

    State ex rel
    Polin v. Hill 547SW2d916 (1977)
    Can the City of Richmond deny a business license verbally to a person. Whose business establishment is in violation of the city zoning ordinace. I’m which the ordinance is for a store front not delivery of medical cannabis.

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