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Popular medical marijuana provider in Los Osos wins legal fight, but may leave area

Megan's Organic Market, a cannabis delivery business, is owned Megan Souza and Eric Powers seen here at their marijuana farm in Los Osos.
Megan's Organic Market, a cannabis delivery business, is owned Megan Souza and Eric Powers seen here at their marijuana farm in Los Osos. jjohnston@thetribunenews.com

A popular Los Osos medical marijuana cultivation and delivery service won a recent victory in its ongoing legal battle with county officials, but the business’s future remains uncertain.

San Luis Obispo County alleges Megan’s Organic Market — co-owned by Eric Powers and Megan Souza and operated on land they lease from Susan Veley — is unregistered and violating an urgency ordinance developed last year, after a marijuana boom in California Valley.

On Sept. 13, a judge denied a county motion that would have allowed officials to shut down Megan’s Organic Market while the lawsuit continues. According to legal documents, Powers said he spent about $40,000 in rent, materials, labor and other expenses to maintain his current marijuana crop, which will be ready for harvest in October.

The judge ruled that forcing the business to close before harvest time would cause too much of a hardship to Megan’s Organic Market and the thousands of patients it supplies, according to court documents.

“Other arguments regarding the operations of an unpermitted cultivation site under these facts do not outweigh the harm alleged by the defendants,” the judge wrote.

The business’s registration was denied due to a 2012 complaint regarding an unpermitted living structure and equestrian facility. The county requested a judge declare the Megan’s Organic Market farm a public nuisance and order the marijuana plants’ removal.

Andrew Joseph Hafler shows his marijuana grows and talks about what it's like to grow cannabis in California Valley in eastern San Luis Obispo County.

“What is a nuisance with this crop?” Powers asked in July. “They’re saying this is energy intensive? We’re using the same methods any other farmers would use.”

San Luis Obispo County leaders are still grappling with how to regulate marijuana cultivation in unincorporated areas. The Board of Supervisors extended the county’s ordinance for a year in August, but they’ll consider new, permanent regulations on Oct. 3 that would replace the urgency rules.

The Planning Commission on Sept. 14 recommended an ordinance that would prohibit all marijuana cultivation in the Carrizo planning area, including California Valley, where most of the grows are located. The ordinance would also permit just 50 outdoor cultivation sites and unlimited indoor sites throughout unincorporated areas in the county.

More than 330 marijuana cultivation sites are currently registered with the county.

Most grows in California Valley are located outdoor, said Brandi Cummings, a county planner. North County cultivation sites include a mix of indoor and outdoor grows, she said. North Coast and South County sites are primarily indoor.

Indoor cultivation is favored because sites are perceived as more secure, less visible and not as smelly, Cummings said.

But outdoor grows like that operated by Powers and Souza will have to fight for a limited number of permits. Under the Planning Commission’s recommended ordinance, 30 grows would be allowed in the North County planning area, three in the San Luis Obispo area, 11 in the South County and seven in coastal areas, including the North Coast, according to the county staff report. It could not be determined late Monday why 51 are listed in the breakout.

Powers said he and Souza plan to apply for a cultivation permit, but the Planning Commission’s restrictive recommendation led them to begin looking for cultivation space in another, undisclosed county in California with “more favorable regulation.”

We have a hard time accepting that the (Board of Supervisors) may intentionally put hundreds of small cultivation operators out of business, but that seems likely.

Eric Powers, co-owner of Megan’s Organic Market

“We have a hard time accepting that the (Board of Supervisors) may intentionally put hundreds of small cultivation operators out of business, but that seems likely,” Powers said in an email. “San Luis Obispo County has excellent terroir for cannabis cultivation; by forcing all cultivation indoors and to greenhouses, none of the cannabis produced will reflect the native terroir.”

Powers also said increased indoor cultivation will cause environmental concerns: “Greenhouse and indoor production creates a large carbon footprint and favors larger-scale businesses over the family business.”

“I don't believe in the sustainability of indoor cultivation in California, as the energy costs related to indoor cultivation will make indoor cannabis unable to compete with those using sunlight,” he added.

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Lindsey Holden: 805-781-7939, @lindseyholden27

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