Carson City District Court rejects Carson City’s motion to dismiss in $15 million Tahoe Hemp case
Submitted by Kelsey Penrose on Fri, 04/24/2020 - 9:55am
On April 17, Carson City District Court rejected the city’s motion to dismiss the case involving Tahoe Hemp LLC.
Tahoe Hemp is suing Carson City for $15 million after the city refused to allow the company to grow hemp on the Buzzy’s Ranch property, despite an agreement with the Jarrard Family Trust.
To learn more, read our earlier coverage here.
The Jarrard Family Trust sold the valley of Buzzy’s Ranch to the city with the agreement that the Jarrard Family Trust would be able to use portions of the valley for agricultural purposes.
The Trust entered into an agreement with Tahoe Hemp for the purpose of growing hemp on those portions of the valley designated for the Trust.
However, the city stated that allowing hemp to be grown in the plain would jeopardize the grant funding the city received to purchase the property from the trust, and it would also cause a negative impact on the aesthetics on the open space property.
The city also argued that growing hemp, (which contains no THC, the chemical in hemp’s cousin cannabis that produces psychoactive responses when consumed) would become a liability issue for those who did not recognize the differences between hemp and cannabis.
The Trust leased the property to Tahoe Hemp on June 6, 2019, which the parties argue is completely legal within the bounds of the agreement between the trust and the city.
The motion to dismiss filed by the city in district court argued that Tahoe Hemp does not have a valid lease with the trust and therefore lacks standing to use.
However, the courts found that there is valid contract and lease between Tahoe Hemp and the Trust, therefore this portion of the motion was denied.
They stated that growing hemp on the property would violate Carson City Municipal Code 13.06.100. The city also argued growing hemp would “fundamentally alter the natural landscape of the property, because it would require 98 acres of the property to be stripped and plowed, destroying the natural habitat,” according to the motion.
However, the court ruled that the city has not provided any evidence that growing hemp is not an agricultural activity, or that growing hemp on the property would interfere with the objective of promoting quality of life through the preservation and protection of the natural environment.
The city had also argued that growing hemp was illegal when the city and the Trust made the purchase and sale agreement, therefore it should not be allowed to be grown since it was not specified as an allowed crop at the time of sale.
However, the court ruled that the PSA does not limit the term “agricultural activities” in any way, therefore it must be thrown out. If, for example, the purchase and sale agreement had stated “the Trust had the right to conduct agricultural activities that are legal as of this date,” that would be a different story.
The city stated there were numerous ways that growing hemp would be a liability. However, Tahoe Hemp argued that they did not offer any evidence to support their allegations. Because the city offered no evidence to support these allegations, the motion states, the court will deny the argument of breach of contract.
The Court Orders are as follows:
The motion for summary judgement on the writ of mandamus claim is granted and the mandamus claim is dismissed.
The motion regarding Tahoe and the Trust being required parties is granted. If Tahoe wants to proceed with this action it will need to add Tahoe and the Trust as parties.
The motion for summary judgment in all other respects is denied.
