Fighting California Cannabis License Revocation Lawsuit

Revocation of a cannabis license can prove fatal to a marijuana business, unless one takes swift and decisive legal action. All legal remedies should be discussed with an experienced and highly qualified L.A. cannabis business lawyer.

Recently, it was announced that a marijuana dispensary has filed a lawsuit against the city of South Lake Tahoe after the city council of the California community on the Nevada border revoked its business license for failure to open on time. The delay, according to the plaintiff, was directly related to the COVID-19 pandemic, something entirely outside the firm’s control.

According to the Associated Press, the company had been awarded two microbusiness marijuana licenses two years ago. Part of the deal was the firm would open up shop within one year. However, the pandemic created an unforeseen situation that prevented the company from meeting the deadline. The agreement became effective in February 2020, but the world effectively turned upside down with the pandemic, with both business and construction coming to an abrupt halt the following month. When construction picked up again, the demand for construction materials and workers was such that the business couldn’t keep up.

The city gave the company 30 days past the one-year deadline to open their doors, but they failed to do so. The city’s attorney said the business hadn’t even begun to cure their default, and thus the license was revoked after a unanimous vote by the city council. The mayor was quoted as saying that while she sympathized with the plight, her own business having stalled on construction in the wake of the pandemic, all the other cannabis companies with pending start dates prior to the pandemic did manage to open their doors on time.

The lawsuit filed in El Dorado County alleges the city is liable for breach of contract, with plaintiffs asking that the city be required to honor the original development agreement and cover the loss of profits the company sustained as a result of the dispute.

Ensuring Due Process, Fighting for Cannabis Company Rights

Cannabis companies facing license revocation in Southern California are entitled to due process, and our longtime Los Angeles marijuana business license lawyers are committed to ensuring their rights and best interests are protected. Business licenses revoked for procedural issues may possibly be restored through settlement negotiation with the help of your attorney.

Just recently, for instance, the license of a marijuana testing lab in the Bay Area was restored after reported testing errors. The company sued, arguing it had no way to administratively appeal the revocation. The company did agree to pay a fine and will destroy previous testing samples, while the revocation was reverted to a temporary suspension. That court battle was watched closely because most marijuana businesses currently operating in California are still working with provisional permits, rather than full annual licenses. Provisional licensees don’t have the same full rights to due process as those with annual licenses, though this case underscored that they still may have recourse following revocation.