City upholds cease-and-desist order issued to marijuana club

Studio 420 challenged cease-and-desist order in June, but appeal fails; shop will appeal again

Posted 7/31/17

The City of Englewood appeared unfazed by the legal arguments of a father-and-son-owned shop that fought against a cease-and-desist order to revoke its business license, dealing a blow to the South Broadway business where people gather to consume …

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City upholds cease-and-desist order issued to marijuana club

Studio 420 challenged cease-and-desist order in June, but appeal fails; shop will appeal again

Posted

The City of Englewood appeared unfazed by the legal arguments of a father-and-son-owned shop that fought against a cease-and-desist order to stop allowing marijuana consumpion, dealing a blow to the South Broadway business where people buy memberships to do so.

The shop, called Studio 420, does not meet the “definition of a ‘tobacco business’ and therefore does not meet criteria for exemption” under law related to smoking restrictions, said the decision, which was signed July 17 by Kathleen Rinkel, the city’s director of finance and administrative services. Rinkel oversaw the June 16 hearing in which Studio 420 challenged the city’s original Dec. 9 cease-and-desist order.

Under the Colorado Clean Indoor Air Act, tobacco and marijuana are regulated similarly, Studio 420’s legal counsel argued in June. Smoking is allowed in retail tobacco shops in which the sale of other products is only a small part of the business, under that law. Studio 420, formerly known as iBake Englewood, argued it qualified for the exception.

The city roundly rejected that argument. Studio 420 has filed to appeal the July 17 decision, said co-owner Martin Fuchs.

“I think this is a very pivotal point in history,” Fuchs said. “This is the guide that the country is going to be going by. We knew when we started out as pioneers it wouldn’t be easy.”

Co-owner and son Craig Fuchs said, “We feel we’ve done nothing wrong,” and Martin Fuchs said his son went through “all the right channels” and said what their business was going to be when applying.

Craig Fuchs said the city’s next step would be to appoint someone to conduct an independent review of the appeal, and if they upheld the order and Studio 420 wanted to challenge it further, it could go to Arapahoe County District Court. June’s hearing was the first “license revocation hearing” in Englewood history, City Manager Eric Keck said at the time.

If Studio 420 is ultimately unsuccessful, it could have its business license revoked related to the cease-and-desist order. That’s not the only legal issue in the case, though.

The recent decision on the June hearing found that evidence supported all 12 statements of fact supporting the order. Those points heavily touched on the city’s argument that Studio 420 misrepresented itself on its business license application in 2015.

The decision said the business at 3995 S. Broadway, which opened in June 2015, obtained a license by “fraud, misrepresentation or false statements.”

Its business application did not list that it would charge a membership fee that would provide access to a back room for consumption of marijuana and marijuana products brought by members.

Keck said in June that he couldn’t say if the owners, Martin Fuchs and his son Craig Fuchs, intended to mislead the city, but said that the majority of a store’s sales must be tobacco sales if it is to be exempt from the smoking restriction. Studio 420 does not meet that criteria, in the city’s view.

Studio 420’s business license application described it as a retail shop selling tobacco products, pipes, shirts and hats. The shop says it does not sell marijuana, but it does sell pipes and other paraphernalia used to consume marijuana, in addition to the memberships.

Several city officials, including Rinkel, did not respond for comment on the ruling. Keck declined to comment further. A city official told the Englewood Herald in June that the city had 30 days to issue a decision, but Rinkel later clarified that the limit was 30 days from when “final attorney documents” were supplied to her, which occurred July 3.

Craig Fuchs said at the June hearing that the membership part of the business was originally intended to be a slight aspect that became more popular than anticipated.

“It helps people get off the street and consume legally,” Craig Fuchs said at the time. “There are a lot of people in apartments, or with children and animals, that won’t (or can’t) smoke in their homes.”

A witness at the June hearing said he smokes for medical reasons and can’t smoke at the property where he lives. He also said he’s met others who smoke for medical reasons at Studio 420.

“Would you rather have people smoking by parks or schools or city hall? Or in here, in a safe environment?” Martin Fuchs said in July.

Fire Marshall Laura Herblan said at the June hearing that she was not aware that Studio 420 would be using lighting devices like torches and said such activity would bring fire code issues into play.

The city argued that hats, T-shirts, snacks, pipes or other such items, or memberships can’t be the main part of a tobacco retailer’s sales if it wants to be exempt from smoking restrictions.

“We see them as a shop that sells tobacco as incidental to other things they do there,” Keck said in June.

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