The 22nd District Court has reversed the Cortez City Council’s denial of a marijuana retailer, meaning it will be granted another public hearing and a chance to open its doors.

NuVue Pharma LLC approached the council in 2018 for permission to open a shop on the east side of Cortez, but its application was denied. NuVue Pharma sued the city, alleging the denial was “arbitrary” and “capricious,” and after about 12 months of litigation proceedings, Judge Todd Plewe remanded the decision to the council in November.

“It is hereby ordered that this matter is remanded to Defendant – City Council in and for the City of Cortez with directions to vacate the ‘Findings and Decision Regarding the Application of NuVue Pharma LLC for a Retail Marijuana Store at 503 Patton Street’ and to grant Plaintiff a new hearing to be held in accordance with applicable law as directed in this Order,” Plewe wrote in the ruling.

NuVue Pharma LLC is a Pueblo-based company that applied to open a marijuana dispensary in Cortez in the summer of 2018, looking to set up shop at 503 Patton St., across U.S. Highway 160 from Denny Park.

The dispensary met distance requirements set by the city and state, and the company’s owner, Dr. Malik Hasan, passed a background check, according to the Sept. 11 meeting minutes. By law, marijuana shops must be located at least 1,500 feet from a school, day care center or other dispensary.

But several community members opposed the dispensary, voicing concerns in letters to the city and at a public hearing on Sept. 11, 2018. Some opponents to the dispensary said Cortez already had too many marijuana shops.

At that September public hearing, the City Council unanimously voted to deny NuVue’s proposed retail marijuana license.

And at a subsequent meeting on Oct. 9, 2018, the council again denied the license, with a clarification to the motion to explain the rationale for the denial. Councilor Jill Carlson moved to include the three factors the council was allowed to consider as part of the public hearing testimony: reasonable requirements of the neighborhood, desires of the adult inhabitants and the character of the applicant.

Councilors said that their primary reasons for denial had to do with neighborhood concerns. Mayor Karen Sheek noted that most other marijuana dispensaries are in more commercial areas of town.

On Nov. 8, 2018, NuVue Pharma filed a complaint for judicial review, alleging that the council exercised “arbitrary and capricious abuse of discretion” in its denial, that the residents opposing the motion didn’t live close enough to the proposed location to be directly affected, and that the concerns were ungrounded.

The Cortez City Council and each individual councilor were named as defendants.

After about a year of litigation proceedings, the court ruled on Nov. 7 that the council’s denial was a “misapplication” of the Cortez Retail Marijuana Code, adopted in 2014.

In his court order conclusion, Plewe found issue with the three-pronged rationale for the decision. He wrote that denying the application based on he “character of the applicant” was an “abuse of discretion” and “unsupported,” and that the other two factors (“reasonable requirements of the neighborhood” and “desires of the adult inhabitants”) shouldn’t be a consideration when looking at approving or denying an application – at least not under the city’s current retail marijuana code.

And by allowing people to speak at the public hearing who were not residents or business owners of the “neighborhood under consideration,” the council did not correctly interpret the code, Plewe wrote.

The code prohibits retail marijuana establishments in residentially zoned areas and sets strict limits on their proximity to schools and other dispensaries, to avoid a “cluster of retail marijuana businesses,” according to the court order. It does not, however, set a limit on the number of dispensaries in areas of Cortez zoned as “Central Business District” or “Commercial Highway District.”

Since the Retail Marijuana Code doesn’t specify what a “neighborhood under consideration” is, Plewe added that the city should determine what that means for each retail marijuana application before proceeding.

J. Greg Whitehair, one of NuVue’s attorneys, said the corporation is in talks with the city and expects the issue will return to the council in February, when the council next has an opening on its agenda.

Whitehair has requested some clarification from the court, though, because of his concerns that the council may seek to change its Retail Marijuana Code before NuVue has a chance to bring its application back for approval.

“There’s strong case law that says cities can’t just change the laws in the middle,” he said.

ealvero@the-journal.com