Going into its third year of operation, the Ojai-based Shangri La Care Cooperative Inc. has been mentoring and teaching members about growing marijuana, organic herbs and vegetables.

Members of the cooperative who “do not have the mobility or cannot grow their own fresh, organic food for the table and herbs for their health needs” have access to one another’s crops, according to Shangri La’s website.

Adhering to the state’s legal medical marijuana programs under Prop. 215 and SB420, “We’ve had no problem in Ojai operating as a private horticultural social club,” said Jeff Kroll, who operates the private, nonprofit business.

But there are problems, now that the cooperative wants to expand its growing business and open a storefront in the city of Ventura.

Shangri La was denied a business license by the city and has filed a complaint with the Ventura County Superior Court about the city’s “unwritten de facto ban on medical marijuana dispensaries.”

The complaint states that the city’s medical marijuana moratorium is unconstitutional, pre-empted by state law, and requests that the court issue a permanent injunction against the city, mandating that it issue a business license to Shangri La.

On Aug. 31, 2011, Kroll applied for a business license that identified Shangri La as a “horticultural social club” under the business description section. The complaint alleges that city staff inserted the words “medical marijuana dispensary” after it was learned that Shangri La would also be providing cannabis.

About two weeks later the city denied the business license application because “the request to open a medical marijuana dispensary does not appear to fall within any of the existing use types classified by the city’s zoning ordinance.”

But the downtown location on Figueroa Street, from which Shangri La intends to operate, is zoned for medical and retail services, and perfectly suits the cooperative’s business, said Shangri La’s attorney, James Devine of Leiderman Devine LLP.

The city said in the business license denial that there is an administrative remedy available under the zoning ordinance that the cooperative must pursue before its appeal. In other words, Devine said, Shangri La would have to have to apply for a conditional use permit to operate in that zone.

“It’s not a conditional use,” said Devine. “You (the city) already permit this use in the zone. That is where the dispute arises. That is the crux of the legal issue. . . . These are uses permitted in this building — medical, retail and social gathering.”

Devine added that the CUP process can present unlimited expenses for the applicant.

“All the things that the city defines as activities that stem from being a horticultural social club are permitted in the zone, so why do they need to give the city money to do that?” said Devine.

Even if his client went through the entire CUP process, ultimately, based on the history of medical marijuana agenda items, it would be shot down by the City Council, Devine figured.

“I don’t think this Council will ever approve one (dispensary),” said Councilwoman Christy Weir. “They’re more trouble than they’re worth. Santa Barbara discovered that.”

The city of Santa Barbara adopted its medical marijuana dispensaries ordinance about two years ago, and a litany of legal issues has followed. Two months ago, federal agents working with local authorities raided the area dispensaries, successfully shutting them all down, or at least forcing them into clandestine operations.

Devine estimated there about 50 collectives operating in Ventura, and close to 150 in the county.

Since the Santa Barbara crackdown, Kroll said, he’s received approximately 500 phone calls from upset Santa Barbara and Ventura residents inquiring about his cooperative.

But Weir insists this current Council won’t budge on the issue.

“The feds have found the reason they’re cracking down in California is because the dispensaries are being misused,” said Weir. “True intent of a cooperative is not happening. It’s illegal big business.”

Even though Shangri La has 99 voting members and years of accurate bookkeeping, Devine said, he knows what he’s up against with the current City Council, which is why he is willing to take the case to the California Supreme Court.

“The Council has no interest in following state law,” said Devine. “They are more interested in protecting their own jobs, their self-interest and the people — the 4,500 people or so out of 100,000 in this city who voted them in. I don’t have belief or trust in City Council to review the Shangri La application unbiasedly or impartially.”

When California passed Prop. 215 in 1996, legalizing medical marijuana for qualified patients, 51 percent of Ventura County residents voted in favor of the bill.

“It wasn’t me that decided this lawsuit,” said Kroll. “It was unanimous by our (Shangri La) voters. If an organization is going to stay in 100 percent compliance of law, and to work with local authorities, it’s going to be us.”

Since Shangri La does currently operate its business in Ojai, the cooperative is not suing for financial damages; only, said Kroll, “for an order directing the city’s business license department to issue a business tax certificate for Shangri La to operate its horticultural social club.”