Santa Cruz City Council drops proposed moratorium on new cannabis businesses

SANTA CRUZ, Calif. (Bay City News Service)- The Santa Cruz City Council on Tuesday decided not to go through with adopting an emergency moratorium on new cannabis businesses.

The decision comes amid the threat of a lawsuit alleging collusion, Brown Act violations and a targeted attack on one marijuana dispensary, namely The Hook Santa Cruz.

The Santa Cruz Planning Commission in early March approved an Administrative Use Permit application from The Hook to establish a retail dispensary at 1129 Mission St., formerly Emily's Bakery. Santa Cruz City Schools Superintendent Kris Munro—along with several parents of students—have previously spoken out against the approval. An appeal against the Planning Commission's decision was later filed on March 18 and will go before the City Council on May 14.

Failing to gain unanimous support as required to pass the proposed 35-day moratorium—with councilmembers Sonja Brunner and Sandy Brown signaling they would not vote in favor—the Council instead this week agreed to form an ad hoc committee that would be tasked with digging into existing cannabis laws pertaining to taxation, licensing and safety, among other issues.

Prior to the decision to form the ad hoc committee, only one public speaker, who did not identify himself, expressed support for the moratorium. 

The remaining public speakers and those who wrote in ahead of the meeting expressed deep concerns that the City Council's proposed moratorium was specifically targeting The Hook, which is working in collaboration with Wo/Men's Alliance for Medical Marijuana Phytotherapies—a certified organic cannabis cultivator in Santa Cruz County. Through its partnership with WAMM, The Hook plans to ensure that a portion of medicinal cannabis sales are offered for free or on a sliding-scale to low-income patients suffering from chronic or terminal conditions. 

"Changing rules retroactively on this applicant is beyond absurd; it is unethical and sets an incredibly subjective and bad precedent for the future," wrote Jenna Gallant, who submitted a letter to the council. "I know for a fact it is not good government to serve the needs of a few powerful people instead of the needs of the citizens of this community."

Earlier this year in January, the city had approved the transfer of one of Santa Cruz's five available Cannabis Retail Licenses from WAMM to The Hook. Prior to the license transfer, however, The Hook president and co-founder Bryce Berryessa said his team experienced unexpected resistance from senior city officials beginning in December 2023 following what had previously been a smooth application process.

"The timing and specificity of this action provoke deep concerns regarding the fairness and legality of the city's stance toward our enterprise," Berryessa wrote in a letter to the city. "When the mayor disclosed his intentions to propose a moratorium, we engaged in direct dialogue, urging a postponement of this decision until after our scheduled city council meeting.

"Our argument was clear: introducing a moratorium at this juncture would not only inflict undue economic damage upon our business but also impede our right to a fair and transparent process. The singling out of our business for such a prejudicial action underscores a targeted approach that we find deeply concerning," Berryessa said.

In her letter to the Council, Corral explained that WAMM is working with The Hook to make it possible to continue WAMM's Equity Services, especially since the two organizations share the same ideals and service mission. She said if the city were to upend the permit approval for the dispensary on Mission Street, it could only be perceived as politically motivated.

At Tuesday's meeting, Corral urged the Council to follow the recommendations of the Planning Commission.

"It really breaks my heart to be standing here in this position after 32 years of work in this community. This is where we built medical cannabis—here, acting as allies," Corral said. "Our mission is to overcome every obstacle that will prevent us from continuing our decades of service to the poor, to the sick, to the dying, and that's really our mission. It hasn't changed. I haven't gotten rich doing this. As a matter of fact, it's quite the opposite."

Hours before the decision, the City Council went into closed session to in part discuss the threat of litigation from attorney Gavin Kogan of Hudson Martin PC, representing The Hook and WAMM. 

In a notice addressed to the City Council and the Santa Cruz City Schools District, WAMM and The Hook alleged Brown Act violations and a coordinated effort to unfairly deny an application for a use permit, saying that city staff, Council and Planning Commission members colluded with the school district to ensure the denial of the permit, while also intimidating district employees and students from speaking out.

Kogan's notice to the city demanded the preservation of all documents and digital communications relating to the claim going back to Feb. 1, 2023, and claimed members of the Council engaged in serial meetings—or communication without a quorum—in violation of the Brown Act, which guarantees the public's right to attend and participate in meetings of legislative bodies.

He further said it was regrettable that after all the efforts WAMM and The Hook have exhausted to mediate the "unfounded and prejudiced district concerns, that it must now resort to litigation against the city, the very partners with whom it successfully stood shoulder to shoulder to combat the ignorance of the federal government towards medicinal marijuana."