Rave Radio: Offline (0/0)
Email: Password:
Anonymous
New Account
Forgot Password
News (Media Awareness Project) - US CO: FTC Complaint Haunts Boulder Med-Pot Business Owner
Title:US CO: FTC Complaint Haunts Boulder Med-Pot Business Owner
Published On:2012-01-17
Source:Daily Camera (Boulder, CO)
Fetched On:2012-01-19 06:00:20
FTC COMPLAINT HAUNTS BOULDER MED-POT BUSINESS OWNER

City of Boulder, Top Shelf Alternatives Headed to Court Over
Background Checks, License Denial

Three years ago, Michelle Tucker was the director of Resolve Credit
Counseling, a for-profit debt settlement business that was the
subject of a Federal Trade Commission complaint of deceptive business
practices.

The company reached a settlement in which it agreed to pay $350,000
in fines (Tucker says they were "remedial fees") but didn't admit any
fault. A federal judge excoriated the FTC for taking a "nuclear"
approach to enforcement.

Now, the city of Boulder thinks that the previous complaint about
Resolve Credit Counseling should disqualify Tucker from running a
medical marijuana business.

"We don't have the resources to do that kind of monitoring," said
Senior Assistant City Attorney Kathy

Haddock, referring to the oversight that was part of the FTC
settlement. "Legitimate medical marijuana patients are a vulnerable
population and fraud is a crime of moral turpitude."

Tucker bristles at the city's description of her past acts. The FTC
complaint was a civil matter, not a criminal charge, and she wasn't
found guilty of anything.

"I've done -- as a mom and a business owner -- the best that a person
can do, and I'm being labeled as a person of bad moral character,"
Tucker said. "I'm not a bad person. I'm trying to feed my family."

An administrative hearing officer agreed with Tucker and said the
city couldn't use the FTC complaint as evidence of bad moral character.

The city still denied a business license to Top Shelf Alternatives,
1327 Spruce St., on the grounds that it exceeded the maximum square
footage allowed under city code, though Tucker said the extra space
is just storage and she has reduced her business' footprint.

Now the whole issue is headed to Boulder County District Court as the
city appeals the background check issue and the business appeals the
square-footage issue.

So far, Top Shelf remains in business.

The meat of the matter

The city had threatened to shut down the business after the license
was denied, but after Top Shelf filed a request for an injunction
that would allow them to stay open, the city backed off, at least for now.

Last month, a district judge granted an injunction allowing another
dispensary, The Station, run by Buffalo Enterprises, to stay open
pending an appeal.

Haddock said The Station's success in getting an injunction is a
factor in not moving to shut down Top Shelf Alternatives, but Boulder
may still try to force the closure of the dispensary if they can't
get an "expedited" hearing schedule that quickly gets to the meat of
the matter. And if the city moves to shut Top Shelf down, Tucker will
again request an injunction.

Haddock said there are other issues with Top Shelf's license,
including not operating on a "wellness center" model that includes
other services.

However, the FTC filing is a significant issue. Haddock said many
regulatory agencies use civil enforcement measures, and it's
essential for the city to be able to look at those when considering
background and moral character.

The FTC alleged that Resolve and Debt-Set, a related company, were
not up-front with customers about fees or about exactly what work the
companies would do to reduce their debts. Attorneys for both
companies denied any wrongdoing and said their terms were clearly
spelled out in client contracts.

Tough rules in Boulder

Tucker said she is on track for state approval, and state regulators
have no problem with her background.

Julie Postlethwait, a spokeswoman for the Department of Revenue's
medical marijuana enforcement division, said she cannot comment on
the progress of specific applications.

However, marijuana businesses need local approval -- which Top Shelf
doesn't have -- to get their final state license.

State statute on who is prohibited from holding a marijuana license
makes no mention of civil complaints, except to say that licensees
must "pay any judgements due to a government agency."

That the city of Boulder has tougher standards than the state -- even
unreasonably tough standards -- has been an ongoing complaint of some
marijuana business owners, particularly those who have been denied licenses.

State law allows cities to have standards that are stricter than the
state's, but some business owners in Boulder have also complained
that the city's standards aren't clear.

The city code says that anyone "not of good moral character" can be
denied a license and allows a wide range of factors to be considered
in making that determination, though it doesn't explicitly mention
civil complaints by federal regulators.

Kenneth Morris, an attorney representing Top Shelf and Tucker, said
the business has complied with every city request, but officials keep
finding other reasons to deny a license.

"They've been unfairly attacking the owners of Top Shelf because of
the FTC filing," Morris said.

Treated the same?

Tucker said she has worked for nearly three years to build her
marijuana business and paid thousands in application fees and
building code compliance. Just a few weeks before the city denied her
a license, she said she was told in an email that she had passed her
background check.

"Every time they couldn't find something, they switched gears," Tucker said.

Haddock said the city strives to treat every business the same. Many
businesses were pressing to know if they had passed their background
checks so they could pull building permits. Haddock said the city was
clear with Top Shelf and other businesses that the preliminary Tier 1
approval was just that -- preliminary -- and dependent on a more
thorough review. Building permits are pulled at the owner's risk.

"The opportunities that they've gotten have been the same as everyone
else," she said. "Everyone gets treated the same."

Tucker is about to lose her dispensary in Fort Collins after that
city's voters approved a ban on marijuana businesses. Now she hopes a
Boulder district judge will save her Boulder business.

"I hope I have a fair judge who doesn't hate marijuana," she said. mera.
Member Comments
No member comments available...