HomeMy WebLinkAboutItem No. 01 - Revocation of Business License 024-751 Issued to Medcare Farms1)Revocation of Business License 024-751 Issued to Medcare Farms
Find and declare Medcare Farms, located at 29395 Hunco Way, a public nuisance and
uphold the City’s revocation of business license 024-751.
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REPORT TO CITY COUNCIL
To:Honorable Nuisance Abatement Board Members
From:Jason Simpson, City Manager
Prepared by:Shannon Buckley, Assistant City Manager
Date:June 18, 2024
Subject:Revocation of Business License 024-751 Issued to Medcare Farms
Recommendation
Find and declare Medcare Farms, located at 29395 Hunco Way, a public nuisance and uphold
the City’s revocation of business license 024-751.
Background
The City of Lake Elsinore received written notification from the California Department of Tax and
Fee Administration that Medcare Farms' seller’s permit was revoked due to back taxes owed.
Operating a cannabis business without a valid, state-issued seller's permit violates City code.
Discussion
Case History
On November 29, 2023, Agents from the California Department of Fee and Tax Administration
came into city hall to advise staff that the State is revoking Medcare Farms seller’s permit due to
back taxes owed. Staff was told the revocation could take up to 60 days. On January 31, 2024,
City Staff met with State Officials and were told Medcare Farms seller’s permit was revoked
effective January 29, 2024. Medcare Farms filed an appeal with the State and submitted revised
taxes, automatically triggering an audit by the State. Medcare Farms seller’s permit would remain
revoked, but the State would take no enforcement action until the conclusion of the audit. The
city asked for and received a copy of the revocation letter.
Medcare Farms Business License Revocation
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The Finance Division audited Medcare Farms and determined they owe the city $1,693.841.16 in
outstanding Community Benefit Fees (“CBF”). Based on Medicare Farms' inability to pay, the city
decided not to renew its business license, which expired on December 31, 2023. On April 3,
2024, the City’s Prosecutor, Matt Silver, drafted a letter to Medcare Farms advising that its
business license (024-751) would not be renewed due to outstanding CBF fees and a revoked
State seller’s permit, violations of the Lake Elsinore Municipal Code (“LEMC”) sections
5.08.290(A), (B), (D), 8.18.020 (F), and 17.156.040(A). The letter was emailed to the business
owner and mailed out certified.
City Staff immediately received an email from the business owner advising that he wanted to
appeal the city’s decision not to renew his business license. The business owner asked for and
was given the necessary information to file his appeal. On April 15, 2024, the City Clerk’s Office
received the business owner's appeal and a hearing before the Nuisance Abatement Board was
scheduled for June 18, 2024. On May 15, 2024, Officer Lopez contacted Agents from the
California Department of Tax and Fee Administration to inquire about the audit. They advised that
the audit had been concluded and found Medcare Farms liable for all back taxes owed. The
agents said they would contact Medcare Farms to inform them of the audit's outcome and resume
enforcement action.
On May 22, 2024, Officer Fred Lopez was contacted by Agents with the State of California
Department of Cannabis Control (DCC), letting him know that they were at Medcare Farms
responding to complaints received. The case agent asked for assistance, and Officers Lopez and
Burnett responded. Once on scene, Agents advised Lopez and Burnett the original complaint
was for the lack of security on site, but further investigation yielded additional violations, including
black market marijuana, missing invoices, doctored manifest, and untraceable product. There
was also a separate cannabis business being operated in the warehouse portion of the building
utilizing Medcare Farms cannabis license because their own license had been revoked.
After discussing options with the State Agents, it was decided that the city would formally order
Medcare Farms to shut down and cease business operations; the onsite manager was advised
via a notice of violation that the business needed to remain closed until they could get their state
seller’s permit re-instated. DCC Agents remained at Medcare Farms for a total of three full days;
on Friday, May 24, 2024, Officer Lopez received a call from the case Agent advising him that
employees from Medcare Farms were removing equipment from the building and loading it onto
a large U-Haul truck.
Conclusion
On duty, Code Enforcement Officers conducted random checks of Medcare Farms and concluded
that the business remained closed and appeared to have vacated the premises. The last
inspection, on June 6, 2024, showed a note taped to the front doors referring Medcare Farms
customers to another local cannabis business. On June 11, 2024, Officer Lopez received an
update from DCC advising they were moving forward with revoking Medcare Farms'
state-issued cannabis permit.
Medcare Farms Business License Revocation
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Fiscal Impact
Medcare Farms owes the City of Lake Elsinore $1,693,841.16 in outstanding Community Benefit
Fees, $315,031.15 in interest, and $56,331.88 in penalties, for a total of $2,065,204.19.
Attachments
Attachment 1 - Locational Map
Attachment 2 - Photos
Attachment 3 - Notices and Documents
Attachment 4 - Business License App
Attachment 5 - Development Agreement
Code Enforcement