Despite a nearly 90-minute argument from legal counsel for LLXP Corporation aiming to repeal the March 4 decision by City Manager Brett Miller to revoke all three of the company’s cannabis permits, the Hollister City Council voted June 7 to uphold Miller’s decision.
The public meeting was held to hear LLXP’s statement and motion to either overturn or uphold Miller’s action to revoke its cultivation, manufacturing and distribution permits in a cannabis manufacturing facility at 1791 Airway Drive issued to Nicholas and Joseph Maxwell.
LLXP attorney David Morales objected to the June 7 discussion being held in open session, pointing out that in 2018 the Hollister Police Department and the city required that confidential information related to an ongoing investigation should only be discussed in closed session.
He objected to the city bringing back in a public forum “confidential and perhaps erroneous information” that might harm the reputations of the company and its owners. He said it appeared the city intended to “disparage LLXP or the persons affiliated with LLXP” through the use of unsubstantiated allegations.
“We’re concerned that this appears to be retaliatory and improper, and it may violate LLXP’s rights to due process and equal protection,” Morales said.
He accused the city of intentionally withholding from the company the specific grounds and documents it used to base its recommendations to revoke the permits and asked the city to return to closed-session discussions and if that were not to happen, he wanted the city attorney to explain why not. Mayor Ignacio Velasquez asked City Attorney Jason Epperson for an opinion. Epperson recommended to note the objections and move on. Velazquez agreed.
Morales asked if he could call on Miller to ask him some questions. Velazquez told him they were not in court and there would be no cross examinations. Rebuffed, Morales continued his statement, claiming that the city staff, including Epperson, failed to comply with the council’s instructions and had not provided documents to support the allegations being used to revoke the permits.
He said he spoke to Epperson on May 24 seeking more information and to obtain the promised documents and said that Epperson could offer no information beyond what was included in the vague May 14 letter.
Epperson responded, “We provided what we were able to provide. I realize they would like more, but it is what it is.”
Morales said there was no explanation how unsubstantiated allegations could be used to revoke permits and the taking of valuable property rights. He said when he made a document request Epperson told him the city did not have any additional documents.
“It makes no sense that the city manager would revoke our licenses based on documents that it does not have,” Morales said.
Councilman Tim Burns asked the Hollister Police Cannabis Safety Officer Chris Wells for specifics about his investigation. Wells said when he made an unannounced inspection he discovered three individuals, including the two owners, smoking cannabis on the licensed property, which he said was a violation of the city code. He said he wrote a notice of warning on Jan. 4, 2019.
Burns questioned how the incident could be considered a threat to public safety. Wells claimed there were repeated violations concerning illegal grows in Santa Cruz County on one of the Maxwell properties and in San Benito’s South County in 2017. Wells said there was no criminal action and that the violations were resolved through civil penalty.
Councilman Rolan Resendiz asked if the smoking of the cannabis represented sufficient grounds to revoke the permits. Wells told him by the letter of the law it was.
Apart from Burns asking Epperson about the number of documents the city provided the company, none of the council members addressed any of Morales’ accusations or requests.
BenitoLink requested comments from the council on why no questions were asked regarding Morales’ accusations and why they voted to uphold the revoking of the permits.
Tim Burns responded: “The questions the attorney asked were legal questions that I do not have expertise to understand in some cases as a lay person. I believe those questions and arguments will be better asked, answered and resolved by a judge in a court of law should the council’s decision be appealed.”
Velazquez said he supports the police department’s assessment of the situation and accused many of those who obtained cannabis permits as playing a game to get city permits in order to ultimately obtain state permits and that the promised millions of dollars in profits for the city never materialized, as he predicted.
“The whole thing is wrong and needs to be cleaned up and that’s why I said we need to come back for a study session,” he said. “We had a good document [cannabis ordinance] that was changed at the last minute that makes this confusing. I said from the very beginning people would try to exploit it [the ordinance] and these loopholes to get around the rules. And that’s exactly what has happened.”
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