After an unfavorable decision at the state appeals court and a mixed decision by a local hearing examiner, Black Diamond’s only medical marijuana-related business is shutting down.

The owners of Lady Buds withdrew their appeal against the city’s decision to revoke its business license on April 4, three days before its scheduled hearing.

In the withdrawal document, Lady Buds’ attorney Jay Berneburg wrote that business owners Vali Bauer and Angie Reed stick by their beliefs that they did not violate federal law or Black Diamond’s various moratoriums, however, the recent state court of appeals decision that allows cities to ban medical marijuana businesses gave the women no chance at a fair fight.

“The city would still refuse to renew their business license claiming that Ms. Bauer and Ms. Rand were violating the city’s various moratoriums,” Berneburg wrote.

The city issued Lady Buds a business license on Aug. 9, 2012 and renewed the license four months later. The city revoked and denied its reapplication for a license for “holistic therapies, retail sales, massage, teas and herbs” on Feb. 7, 2014. Lady Buds appealed later that month. The city claimed that the shop misrepresented its application and role with marijuana. Bauer and Rand asserted that there were forthright about their business practice and that the city always knew what was going on.

“Ms. Bauer and Ms. Rand have conducted themselves with integrity, made a sincere effort to comply with all laws, make a positive contribution to the city and to be of service to those in need,” Berneburg wrote. “However, Ms. Bauer and Ms. Rand are not naive. They know that in spite of their integrity, conduct and best efforts, the people who currently make up the Black Diamond city government will go to any lengths to make sure Lady Buds does not survive.”

Besides the appeals court decision, a ruling issued April 2 by a Black Diamond hearing examiner granted partial summary judgment on the appeal to the city.

The examiner wrote that Lady Buds’ business license may be revoked/not renewed if it violated the federal Controlled Substance Act or provided false or misleading information on their license application.

“There is no question that Lady Buds, Inc., has been purposely obtuse about its business activities, but its lack of transparency is not sufficient by itself to support any factual determination,” the hearing examiner wrote.

The hearing examiner wrote that the evidence suggested that Lady Buds played “at least some tangential role in the handling of marijuana” and that “reasonable minds can certainly differ as to what that role may be and whether Lady Buds involvement rises to the level of noncompliance with the (controlled substance act).”

The city argued that revocation is proper because Lady Buds is in noncompliance with the city’s medical marijuana moratorium. However, the revocation letter only alleged noncompliance with federal law, not city code.

The case could not be resolved by summary judgment because there was a material question of fact on whether Lady Buds is involved in illegal marijuana activities. Despite “highly circumstantial evidence,” there was no direct evidence that placed marijuana at the business.

“Although it is clear that Lady Buds, Inc. has some role in the distribution or use of medical marijuana, it is entirely unclear how it is involved and whether that involvement is unlawful,’ the examiner wrote.

However, the fact that marijuana was at the business was never something the Lady Buds owners claimed.

“What we claimed is that we were not buying or selling marijuana,” Bauer said. “We never claimed there wasn’t anything on site.”

Black Diamond City Attorney Carol Morris said she didn’t know why the hearing examiner needed more proof on the matter.

“I can’t understand his decision making as to why more evidence was needed,” Morris said. “When have someone admit that it is something they are doing and it is against the law it should be end of story.”

Bauer said Lady Buds has ceased operations and are directing patients to other locations until their lease officially ends at the end of the month.

Bauer said the pair is in the process of creating a website — omniweed.com — that would direct patients to information on doctors, grow shops and lawyers. They will be applying for an internet business license from the city.

“We would like to stay here if we can,” Bauer said.