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Medford tamps out another pot shop

A medical marijuana club known as The Lounge lost an appeal Thursday to the Medford City Council in its quest for a business license.

Klamath Falls lawyer Phil Studenberg, who represents The Lounge, said his client will be headed to court.

"It's an issue that's going to be resolved somewhere else, but probably not here," Studenberg said.

According to Medford police, The Lounge, 617 E. Main St., asked for a $10 cover charge at the door, and patrons with valid medical marijuana cards were given a gram of pot to consume on the premises.

The city of Medford prohibits issuance of business licenses to anyone engaged in activities illegal under federal, state or local laws.

Medical marijuana is acceptable under state laws, but is illegal under federal laws.

The city of Medford has placed a permanent moratorium on medical marijuana dispensaries, even though dispensaries can receive a license to operate from the state.

The council recently revoked the business license of MaryJane's Attic and MaryJane's Basement in the WinCo shopping center on Barnett Road.

Jackson County Circuit Court Judge Timothy Gerking partially reinstated the business license, pending a decision on an appeal, but didn't allow MaryJane's to dispense medical marijuana.

Kevin McConnell, deputy city attorney, said the owner of The Lounge, Phil Carvalho, indicated that he collected the $10 to help pay for utilities.

At $10 a gram, that works out to $4,500 for every pound of marijuana from The Lounge, McConnell said.

"That's a pretty hefty price, and that's doing more than paying Mr. Carvalho's utilities," he said.

Councilor Bob Strosser said he wondered how many patrons the Lounge saw on a given day, but McConnell said he didn't have that information.

"It seems to be very expensive utilities," Strosser said.

Councilor John Michaels said The Lounge's business model is similar to a ticket scalper.

"It seems like the ticket is free, but the envelope is $50," he said. "It seems like the classic case of bait and switch."

After the council unanimously voted down the business license request, Councilor Karen Blair urged her colleagues to study the issue in more depth.

"Pretty quickly we could find ourselves in a big mess," she said.

The council has been trying to navigate through conflicting laws to get its arms around a bigger national debate on marijuana. Colorado and Washington have opted for outright legalization.

"We're the pawns," Councilor Chris Corcoran said. "The Legislature has not done us any favors at all."

Corcoran said he didn't understand how The Lounge could let people smoke marijuana then let them drive away a couple of hours later, presumably impaired.

Strosser said, "I'd like to see the train wreck of marijuana laws cleared up."

Councilor Daniel Bunn said Medford's stance on medical dispensary laws might be one of the first to make it into the courts in the state.

"It might come down to us," he said. "On this issue, we drew the short straw."

Reach reporter Damian Mann at 541-776-4476 or dmann@mailtribune.com. Follow him on Twitter @reporterdm.