City of South Lake Tahoe and Tahoe Wellness Cooperative reach settlement

SOUTH LAKE TAHOE, Calif. - An agreement has been reached between the City of South Lake Tahoe and Tahoe Wellness Cooperative (TWC) after over two years of court proceedings between the two.

During the closed session portion of Tuesday's City Council meeting, the four councilmembers allowed to participate voted unanimously to accept the signed agreement between the City and TWC. Councilmember Cody Bass had to recuse himself from voting since he is the owner and president of TWC.

The Third Appellate Court must still approve the signed agreement signifying compromise on all issues between the two parties.

If the court approves, Bass and TWC will be able to operate the adult-use cannabis portion of the business under the City's new ordinance requirements for the next three years. With approval from the Building Department, TWC will be able to temporarily expand the retail portion of the business into the former El Dorado Savings portion of the building Bass purchased for TWC last year.

"It's great to be settled," said Bass after the council meeting.

Three things addressed in the settlement:

TWC will not be able to expand the square footage of the cultivation, distribution, and manufacturing area of the business until the Tahoe Regional Planning Agency and City's zoning rules change to allow those features in their Bijou area location. Currently, the cannabis business types TWC will operate don't meet current zoning rules where the Bijou center Bass purchased is located.

TWC will pay for the new approved uses of their business. They will pay six percent of their gross receipts for the adult-use sales on a monthly basis. Should the voters approve a cannabis tax in the meantime, these payments will be offset by that tax.

In three years, TWC will have to apply for the same permits and licenses the soon to be approved adult-use cannabis businesses will operate under.

They will still operate part of their business as a medical marijuana dispensary.

In 2016 TWC filed a Petition for Writ of Mandate against the City to challenge their denial of TWC's medical marijuana dispensary permit. In July 2018 the trial court denied TWC's petition and found the City acted correctly in denying their permit.

The City Council approved a new cannabis ordinance in August 2018 but TWC and Bass filed a referendum aginst the ordinance through their attorney and gained enough valid signatures. The City then rescinded their ordinance as they recreated one to meet the TWC demands.

Since then, TWC and Bass agree the changes the City made to the ordinance are substantial enough.

The settlement means neither side will be able to collect legal fees from the other side, and they agree to not sue each other.