CO Supreme Court Finds Substantial Evidence Supported City’s Decision to Deny Applicant’s Request for License to Operate Medical Marijuana Center

Rocky Mountain Retail Management, LLC, d/b/a Rocky Mountain High, filed an application for a license to operate a medical marijuana center in the City of Northglenn. The Northglenn City Council denied Rocky Mountain’s application after receiving evidence at two public hearings. Rocky Mountain sought judicial review of the City’s decision in the district court, arguing that the denial was not based on substantial evidence in the record and was therefore arbitrary and capricious and an abuse of discretion. Rocky Mountain also asked the district court to declare certain licensing provisions of the Northglenn City Code unconstitutionally vague, including section 18-14-7(h), which set forth factors a local licensing authority may consider before approving or denying a medical marijuana center license. The district court ruled that section 18-14-7(h) is unconstitutionally vague, and that the City’s denial of the license in reliance on that invalid provision was arbitrary and capricious.
On appeal, the court found that the district court erred in concluding that section 18-14-7(h) was unconstitutionally vague, as the ordinance neither penalized nor criminalized any conduct. Instead, the ordinance provided a framework within which the City Council could use its discretion to grant or deny a license application. The court determined that the factors listed in section 18-14-7(h)—“number, type, and availability” of other facilities “located in or near the premises under consideration”—provided sufficient notice to applicants regarding what information the licensing authority would consider. Moreover, people of ordinary intelligence could readily understand the meaning of “number, type, and availability” of existing medical marijuana facilities near the premises under consideration. Additionally, even though the licensing authority retained discretion under the ordinance to consider other pertinent matters, and “may” consider the factors listed, this discretion did not render the ordinance impermissibly vague.
Rocky Mountain next argued that the City’s decision was arbitrary and capricious, Although the City Council used the term “need” in its discussions and written findings, the evidence it considered at the hearings and discussed in its written findings reflected that its decision was based in the factors expressly outlined in the code: “number, type, and availability” of existing facilities in Northglenn. The City found that four medical marijuana business licensees existed in the City, with three in operation. The City Council also received evidence from Rocky Mountain about the type of products it proposed to sell and the type of products offered by other facilities. Finally, the City Council considered evidence regarding wait times at existing facilities. As such, the City’s decision to deny Rocky Mountain’s license was supported by substantial evidence when the record was considered as a whole. The court therefore reversed the judgment of the district court.
Rocky Mountain Retail Management, LLC v City of North Glenn, 2017 WL 1450103 (CO 4/24/2017)