A controversy is growing over a medical marijuana dispensary that wants to do business in East Sacramento.

There's mixed reaction, but not everyone is happy a medical pot shop may be operating out of a storefront and attached house at 3257 Folsom Blvd. There's disagreement over whether the dispensary has opened shop yet.

Questions arose after representatives of the dispensary and the landlord notified some neighbors the building's lease had been taken over by the dispensary and the storefront's windows were tinted black in late December, then retinted darker in January. The space has been vacant since a charitable thrift store, This 'n' That Thrift & Gift, left in early September.

Half a dozen nearby business and property owners expressed concerns about the dispensary's legality, operations and impact on neighboring businesses. At least three have voiced their concerns to the city, which is in the process of legalizing and regulating such dispensaries following a City Council vote in November.

"I just don't think it's an appropriate venue for what we're trying to do in this corridor," said Peggy Orr, who took over ownership of The Pink House, a shoe and accessory shop, at 1462 33rd St. in September. "I'm not making a judgment on medical marijuana. I'm just saying I don't think it enhances the neighborhood."

But others said they don't think the dispensary will harm business in the area.

"Anybody's welcome to open any business they like, as far as I'm concerned," said D. Neath, who moved Archival Framing to 3223 Folsom Blvd. three weeks ago. "I just went through the death of a friend from cancer. And that (marijuana) was the only way she could eat."

Sacramento's new city ordinance, which took effect Jan. 7, only allows the 39 existing medical marijuana dispensaries to apply for permits. The 39 dispensaries had all been registered as operating within the city by August 2009.

However, the city told about six of those to move because they were operating in residential areas, rather than areas zoned for commercial or industrial use. The dispensaries had to move by Oct. 26, said city Revenue Division Manager Brad Wasson.

All dispensaries now have to go through an extensive, two-phase application process. The first phase includes getting a special use planning permit from the city Planning Commission, which helps ensure locations are appropriate. Those decisions can be called up by City Council members. The second phase involves getting a special operating permit from the city Finance Department's revenue division, he said.

The deadline to apply for the first phase is Feb. 7. Only one of the 39 dispensaries has applied so far, Wasson said.

Some neighbors said the dispensary didn’t meet the city's deadline for dispensaries to move and violates a criteria that dispensaries not be located within 300 feet of residential areas. Two said the black windows make the business look like an adult store.

A political fundraising group – reportedly Republican – recently leased a small office space next door.

None of the business or property owners saw any activity at the site until late December or early January, said Paul Jorjorian, who owns buildings across the street from the dispensary.

Some people believe the dispensary has not opened. The only activity has come from contractors renovating the building, said one person.

Jorjorian and some of his tenants said they are concerned that people might congregate outside the business and cause problems. Parents may not allow their children to go to the businesses, which include a skateboard shop, he said.

The dispensary is called THC, or "The Healing Center," said Justin Karapetyan, who identified himself and Ted Smith as owners.

The dispensary, which has about 350 customers, will sell two types of medical marijuana: one that relaxes and increases appetite, and one that energizes. The shop will also sell small starter plants, edibles such as brownies and cookies, plus cannabis massage oil, lotions and lip balms. They will offer counseling and classes, Karapetyan said.

No one will smoke marijuana on site, he said.

"There is no medicating on premises. That is a stigma we're tyring to get away from," he said. "I would not want somebody opening up a shop and having a smokeout there. Or drive from the premises and, god forbid, get into an accident."

Karapetyan initially said THC had occupied the space for six months, or since mid-July. He later said the dispensary moved into the space in mid-September and began selling marijuana by appointment Oct. 1.

The dispensary that signed the lease for the 4,800-square-foot space had previously registered with the city as a mobile dispensary called CC 101, which was based in Paradise and whose owner was listed as Theodore Smith. The dispensary operated within Sacramento and had initially tried to register to dispense from a private home, but the city wouldn't allow that, Wasson said.

THC hasn't turned in an application to the city yet. However, the owner sent a letter stating that it began operating at the location Oct. 1. The owner or owners now have to prove that they were operating there before Oct. 26, Wasson said.

"I'm not saying they were, I'm not saying they weren't," he said. "I haven't gotten an application to look at."