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Dispensary can continue to operate over dance studio's objections, judge rules 

One of Grover Beach's first commercial cannabis dispensaries was handed a legal victory after a SLO County judge shot down a neighboring dance studio's request to halt its operations.

In an Oct. 2 ruling, SLO County Superior Court Judge Linda Hurst denied a request for an injunction to prevent the dispensary, Natural Healing Center, from distributing and selling marijuana out of its storefront at 998 Huston St. in Grover Beach. The request for the injunction is part of a lawsuit against the dispensary filed by the owner of Coastal Dance and Music Academy, a dance studio located across the parking lot in the same building complex.

click to enlarge STILL IN BUSINESS Natural Healing Center (above), a cannabis dispensary in Grover Beach, can continue operating despite attempts by a nearby dance studio to shut it down. - PHOTO BY CHRIS MCGUINNESS
  • Photo By Chris Mcguinness
  • STILL IN BUSINESS Natural Healing Center (above), a cannabis dispensary in Grover Beach, can continue operating despite attempts by a nearby dance studio to shut it down.

"We are pleased with the Judge's decision," David Separzadeh, co-founder of Natural Healing Center, wrote in an email to New Times. "Natural Healing Center is a first-class operation and a proud member of the community."

The lawsuit against the dispensary, which sells both medicinal and recreational cannabis products, is the latest chapter in a long-running dispute with the dance studio's owners. Beginning as early as January, Kathleen Schultz, one of the academy's owners, raised concerns about the dispensary and called on members of the Grover Beach City Council to deny the company a permit to operate. Schultz claimed that the studio was a "youth center," and that Natural Healing Center couldn't legally operate within 600 feet of the business. In a written declaration to the court, Schultz also claimed that the studio's business had been hurt by the dispensary, which officially opened for business in July.

"From the time that [Natural Healing Center] filed their application with the city ... we have seen unprecedented lowering in enrollment for our courses, leading to lost revenue," Schultz stated. "We have also been told by many parents that they would not come to the studio with their children if the marijuana dispensary became operational."

However, in a written declaration to the court, Grover Beach City Attorney David Hale stated there was not any evidence submitted to prove the academy was classified as a youth center. In her ruling, Hurst also stated that Schultz and other plaintiffs in the case didn't submit any evidence that the dispensary was causing a drop in enrollment.

In his declaration to the court, Separzadeh said he'd made offers to buy out the dance studio's lease and relocate Schultz's business, which he characterized as "generous and fair." He also said that his company spent more than $1 million in improvements to the dispensary building and hired 12 employees, at least eight of whom would have to seek other employment if the court halted Natural Healing Center's operations.

Concern about the negative impact on the dispensary's business and finances were, in part, why Hurst ruled against the injunction. In her decision, Hurst wrote that she must exercise discretion in favor of the party most likely to be injured by the injunction.

"If the court were to grant the preliminary injunction, [Natural Healing Center] would be forced to shut down their entire business," she wrote.

The dance studio's lawsuit, which also alleges breach of contract, interference with contractual relations, and infliction of emotional distress in connection with the dispensary's operations, will remain ongoing in court. A case management conference is scheduled for Jan. 23 of next year, according to court records. Δ

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