Jackson County Circuit Judge Timothy Gerking Wednesday allowed MaryJane's Attic and Basement in Medford to reopen as long as it doesn't dispense medical marijuana.
"This will allow us to get MaryJane's Attic back up and running," said owner Marlene Nuckols. "We're hopeful."
Gerking said Marlene and her husband, Richard Nuckols, could operate the business as long as medical marijuana or other controlled substances are not exchanged on the premises.
The Nuckolses appeared in Gerking's court because they have appealed the city of Medford's revocation of their business license.
Their attorney, Robert Graham of Grants Pass, said MaryJane's is awaiting approval of an application for a license from the Oregon Health Authority to dispense medical marijuana.
If the license is approved, the Nuckolses will ask Gerking to allow the dispensing of medical marijuana, Graham said.
MaryJane's, located in the WinCo shopping center on East Barnett Road, closed after the City Council last Thursday upheld Finance Director Alison Chan's decision to revoke its business license.
The Nuckolses have two separate businesses under one roof. MaryJane's Attic sells clothing, candles and other products. MaryJane's Basement dispenses medical marijuana to patients who display a valid Oregon Medical Marijuana Act patient card.
The city issued a business license to MaryJane's on April 9, 2012.
Gerking said that MaryJane's dispensing of medical marijuana appears to potentially violate federal law.
He cited a case heard before the Oregon Supreme Court in 2010 known as Emerald Steel Fabricators Inc. v. the Bureau of Labor and Industries.
The court ruled Emerald Steel had the right to fire a pot-smoking employee who operated a forklift even though the employee had a medical marijuana card and limited his marijuana use to when he wasn't working.
"The federal Controlled Substances Act preempts the Medical Marijuana Act," Gerking said.
Medford Deputy City Attorney Kevin McConnell requested the court dismiss the appeal. He also objected to the court allowing MaryJane's to continue operating by granting a stay to the business license revocation.
"These people had their day in front of the city," he said. "They could not convince the City Council that they are operating legally under state or federal law."
Gerking rejected the motion to dismiss, saying the Nuckolses provided sufficient evidence to proceed with a writ of review.
However, he said that if the city had based its arguments on the Emerald Steel case, he might have been inclined to dismiss.
The Nuckolses' Portland attorney, Leland Berger, questioned whether Gerking had a "pre-judgment" of the case and asked whether the judge could be fair to his clients.
Gerking said he would give lawyers for both sides until 9:30 a.m. May 7 to come up with arguments about the federal preemption question.
"I would like a briefing on the applicability of the Supreme Court analysis of Emerald Steel in this case," Gerking said.