Gilroy Pot Club Forced to Close

Gilroy's first pot club could be its last.

Medileaf opened its doors Monday but was forced to shut down two days later -- not because of what's going on at the business but because of the owners of Medileaf didn't get their business license before they opened the club, the city says.

The owners applied for a permit last month but were denied. Authorities say the club is clearly in the wrong because it doesn't have a permit and is violating zoning ordinances.

Eric Madigan, acting as an ombudsman for the club, told local TV station KPIX that he's been working with police and city officials on a business permit "for months now." According to a timeline provided by city officials, that's true: Club owners first applied for a license in May, and then again in June. Both were rejected.

The cofounder of the dispensary told the Gilroy Dispatch that their attorney advised them they didn't need a business license because it's a nonprofit. But police say that's not the way the law works.

Nonprofits still have to obtain a business license, they just won't have to pay fees for it, Gilroy police Sgt. Kurt Ashley said.

The city issued a cease-and-desist order to the club on Wednesday and again on Thursday, stating that it was operating illegally for several reasons and warning the operators that they could be forced to shut down.

But if Medileaf had obtained a business license, would they be allowed to serve patients?

Not so simple. It seems blocking Medileaf with the business-license excuse is just that -- an excuse to not allow the city to broaden its laws to include pot dispensaries.

The city says businesses must comply with federal law and because marijuana is illegal under federal law, it's not allowed in Gilroy. In October, Gilroy's city council members voted down an ordinance that would have made medical cannabis clubs legal.

Medical marijuana patients in the South Bay do have a place to go for their prescriptions, however. The San Jose Cannabis Buyers Collective opened near Santana Row four months ago and is thriving. Membership at the club skyrocketed last week after the Mercury News mentioned it in an article about a proposal to allow medical cannabis clubs in San Jose and regulate them heavily, with taxes going toward city improvements.