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City challenges pot lounge over failure to disclose

Hearing for Studio 420, formerly iBake Englewood, could bring license loss


Studio 420, a father-and-son-owned shop that offers a marijuana consumption club service in Englewood, faced questions June 16 in a hearing to determine whether its business license would be revoked for alleged misrepresentation made on a city application.

"This is the first license revocation case we've ever had in City of Englewood history," City Manager Eric Keck said outside the hearing. "They did not discuss with us that cannabis consumption would take place there."

In sometimes testy wrangling over laws concerning marijuana, clean air and even fire codes, the city and the shop gave different accounts that turned largely on whether allowing customers to consume marijuana on-site was something Studio 420 needed to tell the city it planned to do. Kathleen Rinkel, director of finance and administrative services, oversaw the eight-hour hearing.

The city said Rinkel has 30 days to decide whether to revoke the shop's license.

Craig Fuchs and his father Martin Fuchs opened Studio 420, at 3995 S. Broadway, in June 2015 under the name iBake Englewood. Its sales and use tax license - which allowed it to operate in Englewood - described it as a retail shop selling tobacco products, pipes, shirts and hats. The shop says it does not sell marijuana, but it does sell pipes and other paraphernalia used to consume marijuana. In a back room, people who have bought memberships can consume marijuana and marijuana products that they bring.

Englewood City Council last year passed an ordinance that prohibits marijuana consumption clubs, Keck said. The attorney for the shop argued that Studio 420 should be grandfathered in and allowed to continue because the law passed after it started up, while the city argued that the shop's license should be revoked for not disclosing the activities that would take place there.

The city also brought witnesses to discuss its concerns with impaired driving because of the business. Studio 420's attorney said there have been no reported impaired driving incidents related to the shop.

The attorney sparred with Keck over whether Studio 420 is a private enough space to consume marijuana legally.

"Sir, with all due respect, I've seen consumption coming out the front window," said Keck, who was called to testify. "My wife and I attended (adjacent) Acres restaurant on 4/20, and there was no parking because (Studio 420 had many customers). And a woman walked out the front door wearing marijuana leaf pants and a large hat, and there was smoke coming out the front door."

Keck acknowledged he did not know what kind of smoke it was.

The shop has been mostly free of complaints. Early on, before installing a new ventilation system, there were complaints from a neighboring business about odor, according to testimony.

The city, however, took issue with what it sees as misleading conduct by Studio 420. The shop's sales tax application to the city, which is necessary for conducting retail sales, did not list that Studio 420 would provide memberships to an area for marijuana consumption. The shop argues that Englewood's application form only asks for taxable activities, but the city asked why it did not list it under a section that asked for other services.

The shop and its attorney, Judd Golden, a board member for Colorado's chapter of the National Organization for the Reform of Marijuana Laws, and a former head of the Boulder County ACLU chapter for two decades, argued that the owners did not list it because they don't consider the membership to be a service, but rather a "membership retention" effort, similar to how Costco and Sam's Club conduct their business.

But, said Keck, "what I would expect to see is that if they were going to allow consumption, they would put that down."

Englewood Fire Marshal Laura Herblan also testified and said the city was not made aware of the shop's intent to allow consumption.

"At no time has anyone come to me with factual information that told me they were using (lighting devices like torches) at that facility," said Herblan, who also said such activity would bring fire code issues into play. Their application "indicated that I would not have to worry about any flammable or hazardous materials at that business location."

Craig Fuchs said the membership part of the business was originally intended to be a slight aspect that became more popular than anticipated.

"It helps people get off the street and consume legally," Fuchs said. "There are a lot of people in apartments, or with children and animals, that won't (or can't) smoke in their homes."

A Colorado man who said he smokes for medical reasons and has a brain tumor also testified on behalf of Studio 420. He said like many people, the property where he lives doesn't allow marijuana consumption, and he found a place to smoke at the shop. He said he's met other "terminal cancer patients" there.

Keck said he couldn't say if the the Fuchses intended to mislead the city. But he maintained crucial information was omitted in licensing. And he took issue with Studio 420's claim to be a retail tobacco shop. Under the Colorado Clean Indoor Air Act, tobacco and marijuana are regulated similarly.

To be exempt from the act, the majority of products sold have to be toward tobacco, Keck said. Hats, T-shirts, snacks, pipes or other such items can't be the main part of the retail, he said.

"We see them as a shop that sells tobacco as incidental to other things they do there," Keck said.


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