An appellate court has upheld its ruling that Chula Vista violated its own cannabis permitting laws. The state Fourth District Court of Appeal said on Aug. 12 that there was “no change in the judgment” it made last month, and rejected the city’s petition for a rehearing.
In January 2020, Chula Vista denied three applications submitted by Caligrown for storefront retail business licenses, saying the company failed to rank high enough on the city’s merit-based scoring because of “poor formatting and disorganization,” despite the business following the city’s directions.
Caligrown appealed the rejection and then-City Manager Gary Halbert ruled that they be rescored based on “the applicant’s qualifications and ability to operate a top-quality retail cannabis establishment, rather than application form,” read his July 2020 report.
The city’s former consultant, HdL Consulting Services, rescored one of four evaluation categories, leaving Caligrown short in points once again. The company then sued the city that year, arguing that they unfairly declined an application and sought for the city to re-evaluate dispensary applications. The San Diego Superior Court denied the business’ motion without explanation last year. Caligrown filed an appeal.
In July, the appeals court reversed the lower court’s denial and ruled that Chula Vista “acted in arbitrary and capricious manner” and ordered the city to reprocess the application in compliance with the city’s cannabis ordinance.
During oral arguments, the city’s outside counsel told the court that, to their knowledge, Chula Vista had not issued licenses in the three city districts Caligrown had applied. The city had, however, already issued two storefront retail licenses in those areas, which is the maximum allowed under its ordinance. City Attorney Glen Googins confirmed in a July 20 email that the city had given two in District 1, one each in districts 3 and 4, and two were “conditional” pending state license approvals for districts 3 and 4.
It is unclear how the city will respond to the court’s decision. Options include annulling the licenses or increasing the maximum number of storefront license permits. The city Attorney’s Office said via email it was evaluating the ruling.
In their petition, the city argued that they had new evidence to show that the city has issued storefront licenses and that current license holders should join the case as “indispensable parties” because they would be impacted by the ruling.
The court said “no parties need be joined in this action” because Caligrown is not looking to invalidate any licenses the city has already issued to others.
In its order denying the city’s rehearing, the court also said Chula Vista had sufficient time to present new evidence and that its failure to do so was “unexplained and inexcusable” and “an abuse of the resources of this court.”
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