Jackson County Circuit Court Judge Ron Grensky issued an injunction against The Greenery that blocks it from dispensing medical marijuana.
"We are disappointed in the ruling and are considering our next option," said attorney for The Greenery, Leland Berger.
Grensky issued the injunction after the city of Phoenix filed a restraining order to force the business to comply with city law.
Andrea Adams, executive director of The Greenery, said previously that her business had voluntarily stopped dispensing marijuana pending the judge's ruling.
The Greenery had been dispensing marijuana at 310 N. Main St. in Phoenix since January without a state license. Previously, it had operated in Ashland for about two years.
Ryan Kirchoff, attorney for the city of Phoenix, said Grensky held that dispensing marijuana is illegal under federal law.
"You can't condone something that is expressly illegal," he said.
Following the injunction, The Greenery is not allowed to operate as a medical marijuana facility, Kirchoff said.
The Oregon Legislature in 2013 approved Measure 3460 that allowed medical marijuana dispensaries, but after city officials across the state raised concerns, legislators agreed to allow them to impose a moratorium of up to one year before establishing local rules.
Greenery managers said they have a provisional license from the Oregon Medical Marijuana Program that will become a full license once the state signs off on security cameras they installed recently.
Medford has also imposed a moratorium on medical marijuana dispensaries. Jackson County Circuit Court Judge Tim Gerking last month shut down a medical marijuana dispensary at MaryJane's Attic and Basement.
Berger, who also represented MaryJane's, said his clients are still reviewing their legal options.
— Damian Mann