{"id":7366,"date":"2017-04-27T12:38:58","date_gmt":"2017-04-27T12:38:58","guid":{"rendered":"http:\/\/www.denverpost.com\/?p=2624273"},"modified":"2017-04-27T12:38:58","modified_gmt":"2017-04-27T12:38:58","slug":"pot-license-points-systems-in-aurora-thornton-invite-legal-scrutiny","status":"publish","type":"post","link":"https:\/\/cannitrol.com\/blog\/pot-license-points-systems-in-aurora-thornton-invite-legal-scrutiny\/","title":{"rendered":"Pot-license \u201cpoints\u201d systems in Aurora, Thornton invite legal scrutiny"},"content":{"rendered":"<div id=\"wp_fb_like_button\" style=\"margin:5px 0 5px 5px;float:right;height:100px;\"><script src=\"http:\/\/connect.facebook.net\/en_US\/all.js#xfbml=1\"><\/script><fb:like href=\"https:\/\/cannitrol.com\/blog\/pot-license-points-systems-in-aurora-thornton-invite-legal-scrutiny\/\" send=\"true\" layout=\"standard\" width=\"450\" show_faces=\"false\" font=\"arial\" action=\"like\" colorscheme=\"light\"><\/fb:like><\/div><p>Cities and towns in Colorado have devised all sorts of ways to decide how many pot shops can open and where, but two communities using a points-based system to evaluate and select prospective recreational marijuana businesses \u2014 Aurora and Thornton \u2014 are running into legal hot water.<\/p>\n<p>Aurora is facing a lawsuit alleging that it didn\u2019t follow its own rules for ranking pot shop applicants for the two dozen licenses it issued. Thornton, which has four available licenses for recreational marijuana retailers, could get hit with a similar challenge in the coming weeks.<\/p>\n<p>The two cities use a points-based system as part of their marijuana regulations. Other communities use random lottery drawings (Adams County), establish hard numerical caps on a first-come-first-served basis\u00a0(Wheat Ridge) or put in place buffer zones (Louisville) to manage the number and location of shops.<\/p>\n<p>The points-based ranking systems like those in Aurora and Thornton allows a city to more thoroughly vet business owners and limit licenses to entrepreneurs with solid business plans, adequate financing and clean criminal backgrounds, but inconsistencies in applying those formulas can subject community leaders to accusations of subjectivity, favoritism and fraud.<\/p>\n<p>\u201cThe problem with a points system is that it\u2019s going to have winners and losers and that opens everything up to scrutiny and litigation,\u201d said Sam Kamin, a University of Denver law professor who is an expert in marijuana law.<\/p>\n<aside class=\"related right\" \/>\n<p>That is exactly what Stan Zislis, co-owner of Silver Stem Fine Cannabis, alleges in a lawsuit he filed against Aurora after it denied him a license to open a shop near East Colfax Avenue and Tower Road. The city <a href=\"http:\/\/www.denverpost.com\/2014\/03\/17\/aurora-looks-at-points-system-for-pot-shop-applicants\/\">established a scoring and ranking system in 2014<\/a>\u00a0after it decided to allow recreational marijuana sales, awarding points to applicants in different categories of business expertise and preparedness. It limited the number of licenses citywide to 24 \u2014 four stores in each of the city\u2019s six wards.<\/p>\n<p>The case, which goes before a judge in Adams County on Thursday, alleges a number of things Aurora did or didn\u2019t do in evaluating Silver Stem for a license.\u00a0But the most egregious violation came down to what Zislis contends was a mathematical error that the city refused to fix.<\/p>\n<p>Specifically, he claims that the Aurora Marijuana Enforcement Division (AMED) erroneously rounded up a score in evaluating a competing applicant\u2019s operating plan rather than properly rounding it down, resulting in an overall score that knocked Silver Stem out of contention. A correct rounding of numbers would have resulted in Silver Stem and the competing applicant getting the same score, but the suit alleges the city \u201cmanipulated scores in order to avoid a tiebreaker scenario.\u201d<\/p>\n<p>The suit claims that Jason Batchelor, who was Aurora\u2019s finance director in 2014 when Silver Stem\u2019s application was denied, \u201cacknowledged that AMED committed a clear mathematical error\u201d but concluded that Silver Stem \u201cwas entitled to no relief.\u201d<\/p>\n<p>Aurora officials declined to comment on the suit, citing the ongoing litigation.<\/p>\n<p>Zislis, whose company has five locations in Colorado and one in Oregon, said there\u2019s nothing inherently wrong with a points-based system as long as it is utilized fairly.<\/p>\n<p>\u201cIt\u2019s not the scoring system we\u2019re challenging \u2014 it\u2019s the fact that they meddled with the scores to avoid a tiebreaker,\u201d he said.<\/p>\n<p>Since Silver Stem\u2019s suit was filed against Aurora, Zislis has cited a number of other problems with the city\u2019s marijuana licensing system. Those include using a city employee to review applications, which Zislis says doesn\u2019t qualify as an independent arbiter, and the fact that a license-holder has gone beyond the city\u2019s two-year window to start operations.<\/p>\n<p>Boulder marijuana attorney Jeff Gard said his client had a similar experience in Thornton, which last year<a href=\"http:\/\/www.denverpost.com\/2016\/08\/23\/thornton-says-yes-to-marijuana-sales\/\"> legalized the sale of recreational pot and decided to use a point system<\/a>\u00a0like Aurora\u2019s. Gard claims\u00a0a competitor\u2019s application for one of the city\u2019s four licenses included incorrect criminal background information, but despite bringing the issue to Thornton\u2019s attention, Gard said the city \u201cdidn\u2019t act on it.\u201d<\/p>\n<p>\u201cThey\u2019re not following their own point system,\u201d he said. \u201cWhen they created the rules, they\u2019re binding on both parties.\u201d<\/p>\n<p>Gard said his client, which didn\u2019t get a license, will likely sue Thornton over the issue.<\/p>\n<p>Thornton\u2019s assistant city manager, Rob Kolstad, said the city disagrees with Gard\u2019s accusation. Kolstad said Thornton chose to use a ranking system because \u201cthe evaluation process would provide the city with the best applicants, the best businesses and good neighbors.\u201d<\/p>\n<p>Licensing disputes are not exclusive to Aurora and Thornton. Last year, the Pig N\u2019 Whistle dispensary became the first pot business to <a href=\"http:\/\/www.denverpost.com\/2016\/06\/13\/long-legal-battle-over-sales-license-makes-denver-cannabis-history\/\">beat back a decision by Denver to deny it a license<\/a> after two judges ruled in the store\u2019s favor. And in 2015, a pot entrepreneur locked horns with <a href=\"http:\/\/www.denverpost.com\/2015\/05\/26\/pot-store-denials-in-denver-wheat-ridge-prompt-legal-backlash\/\">Wheat Ridge after the city set a cap of five stores<\/a> in response to neighborhood complaints about his plans to open a store in a residential area. His store would have been the city\u2019s sixth.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Aurora\u2019s and Thornton\u2019s points-based systems of awarding recreation marijuana are running into legal hot water. <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[7095,5062,6811,6897,6813,77,5577,5667,9,5019,1,3,61,1736],"tags":[7096,5063,6816,6898,6818,2655,5580,5673,5022],"_links":{"self":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/posts\/7366"}],"collection":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/comments?post=7366"}],"version-history":[{"count":0,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/posts\/7366\/revisions"}],"wp:attachment":[{"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/media?parent=7366"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/categories?post=7366"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cannitrol.com\/blog\/wp-json\/wp\/v2\/tags?post=7366"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}