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SLO County's first permitted marijuana business shut down over warehouse dispute

Tami Peluso, left, and Cynthia Gonzalez co-founded Elite Care California, the only marijuana business in San Luis Obispo County to have obtained a state license. The business was licensed as a delivery, non-storefront retailer.
Tami Peluso, left, and Cynthia Gonzalez co-founded Elite Care California, the only marijuana business in San Luis Obispo County to have obtained a state license. The business was licensed as a delivery, non-storefront retailer. dmiddlecamp@thetribunenews.com

Just under a year ago, Elite Care became the first permitted medical marijuana provider in San Luis Obispo County after the Arroyo Grande City Council approved an application for the delivery business to serve patients in the city.

A year later, it is effectively closed for business, after months of failed back-and-forth with the city of Arroyo Grande over a warehouse led to Elite Care losing its state license — and being forced to stop deliveries suddenly.

"It's beyond frustrating," co-owner Tami Peluso told The Tribune on Monday. "We are good, upstanding citizens. This is not an easy thing to get a state permit, and we did because we dotted our i's and crossed our t's."

Peluso and co-owner Cynthia Gonzalez plan to ask for help before the Arroyo Grande City Council on Tuesday.

"It was our endeavor to present basically the first medical cannabis clinic to the area," Gonzalez said. "It's disappointing that the communication broke down, and now we are at this impasse, but we are optimistic that at (Tuesday's) City Council meeting, we will be able to give the community a much better idea of how much bigger, and how important, what we offer is."

The pair founded Elite Care California in 2014. After becoming the first locally permitted cannabis business in the county in June 2017, Elite Care received a temporary license from the state in December 2017 to operate as a medical "non-storefront retailer" (AKA, a delivery service).

They were the first business to receive that type of license anywhere in California, Peluso said.

During their application process, Peluso said they were told by the Bureau of Cannabis Control (which issues the state licenses) that their warehouse, where they would store their goods and supplies, had to be in the same city as their local permit to operate — i.e. Arroyo Grande — but city representatives said this would violate existing marijuana ordinance.

Arroyo Grande City Development Director Teresa McClish said city ordinance prohibits all commercial cannabis activities other than deliveries, including having a physical premises within city limits. This means Elite Care can't have a building in Arroyo Grande, she said.

"Elite needs to find a jurisdiction that allows commercial cannabis premises, but it doesn’t have to be in Arroyo Grande," McClish said. "Our ordinance prohibits it."

The city advised the bureau in a letter in May that Elite Care's warehouse would not be consistent with city ordinance; on June 5, the bureau revoked Elite Care's state license — forcing the business to stop making deliveries indefinitely.

Peluso said she and Gonzalez were upset by the news because they had met with and jumped through hoops for city representatives since January, trying to find a solution, including submitting to police searches of their warehouse and homes.

"We've been treated really bad this whole situation," Peluso said. "We've been treated like criminals, and we don't know why."

Additionally, losing the permit left roughly 400 local patients without access to Elite Care's medical marijuana deliveries, Peluso said, potentially pushing them toward less safe medicinal alternatives.

Peluso and Gonzalez will speak before the City Council Tuesday night, asking the council to send a letter to the state saying they are working toward a solution, to allow Elite Care to continue to operate through at least July 30, when their temporary permit was expected to expire.

If that's unsuccessful, Peluso and Gonzalez said they would be forced to move their business out of San Luis Obispo County.

"If it's happening to us, who else is it going to happen to in the county?" Peluso said. "We just happened to be the first ones to get the legal permit in the county, so we are the first ones to have the problem. People need to understand that this is a serious problem."

Gonzalez added: "Even though it is going to be a long process, Elite Care is going to be in the market a long time. Our patients deserve the best and we continue to intend to provide the best."

Editor's note: This article has been updated to include additional comments from Elite Care co-owner Cynthia Gonzalez.

Kaytlyn Leslie: 805-781-7928; @kaytyleslie

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