The Apothecarium, a cannabis dispensary set to open in Berkeley, is in danger of losing its permit because of its landlord’s refusal to lease the premise after the dispensary has paid more than $145,000 to secure the premise since 2015, according to a lawsuit.
BTHHM Berkeley LLC, owner of The Apothecarium, filed the lawsuit May 30 against Stewart Johnston, the landlord of the dispensary’s intended Berkeley location on 2578 Shattuck Ave. for alleged “breach of contract” and “other bad faith actions,” according to the lawsuit.
BTHHM Berkeley LLC and Landmark Real Estate Management, on behalf of Johnston, entered into a letter of intent in February 2015 to lease the property, the lawsuit alleges. The lawsuit also states that the letter of intent clearly outlined the use of the premise as a marijuana dispensary, after receiving approval by the city.
In September 2016, The Apothecarium became one of two marijuana dispensaries unanimously granted a permit by City Council after the city changed the legal limit of medical marijuana dispensaries from four to six. The Apothecarium and Berkeley Compassionate Care Center were selected out of five dispensary applicants.
As location of the dispensaries was one of the factors considered in selection, by refusing to allow possession of the premise for months after receiving permit, the dispensary may lose its permit according to the lawsuit.
In addition, the lawsuit states that BTHHM has spent more than $400,000 over the last two years, which includes $140,000 in rent toward Johnston, and additional fees to secure the location and obtain its permit.
Johnston has insisted on making changes to terms which were agreed upon, which includes raising the base rent from $6,400 to $12,600 every month, raising the security deposit from $12,800 to $50,000 and making structural improvements to the property which is estimated to cost $700,000, according to the lawsuit.
“Johnston’s actions since the Permit was issued make abundantly clear that Johnston has absolutely no intent of following through on his obligations under the Agreement to deliver passion of the Premises or execute a lease with BTHHM,” the lawsuit reads.
City Councilmember Kriss Worthington said, however, that there have been cases, such as with the Berkeley Permit Group, in which a dispensary relocates without losing its permit as long as they go through the standard procedure.
“I hope the sides can work out a compromise,” Worthington said. “I would be happy to help facilitate so neither side gets hurt too much getting the city to approve permit getting (The Apothecarium) moved to another property.”
In the case BTHHM is not allowed to move to another property and loses its permit, BTHHM will have to secure another location and go through the permit process another time which could take years and another $400,000, according to the lawsuit.
