Gilroy city officials have not yet issued a cease and desist order against a local marijuana dispensary, and Sgt. Kurt Ashley said he did not know when it would be delivered.

City Manager Tom Haglund said Tuesday evening that he expected a cease and desist order to be issued against MediLeaf - a medical marijuana dispensary that popped up Monday night at 1321 First St. without the city's permission - within 24 hours.

However, Ashley said he is not sure what a cease and desist order would entail.

"These aren't that common," Ashley said.

City attorney Linda Callon was still drafting the document as of 2:40 p.m., he said.

The store opened between Rock Zone and Andtdawg Universal Strength Headquarters, surprising city officials after the City Council had denied an ordinance that would have allowed it to operate under certain conditions.

City officials met to discuss the dispensary on Tuesday afternoon, and Police Chief Denise Turner noted before the meeting that the business had not obtained a business license and that Gilroy's City Council turned down an ordinance that would regulate such businesses and allow them to legally exist. In addition, the city building department did not issue a building permit for interior construction work at the dispensary, city building department staff said.

Dispensary Co-director Batzi Kuburovich said Monday that his attorney advised him that the dispensary could operate without a business license because it was a nonprofit.

"That's not correct," Turner said, adding that the dispensary is "illegal."

All nonprofits must go through the licensing process just like any other business, though they are not charged fees, Sgt. Kurt Ashley said. In addition to licensing issues, the city will also consider whether MediLeaf's operations constitute illegal drug sales, he said.

Dozens of people, including many Gilroy residents, showed up to the clinic on Monday, and even more came on Tuesday as word began to get out about the dispensary. Members and potential members complained of ailments ranging from pain surrounding amputated limbs to anxiety.

Many of them said they were happy to see a dispensary opening in Gilroy to prevent them from traveling to Santa Cruz or Oakland for cannabis.

Gilroy resident Robert Vaca said he suffers from back spasms and he is glad to have the dispensary in town.

"The medicine is just so much better than what you get from the doctor," he said, referencing other painkillers, such as Vicodin.

Vaca said he does not have to increase dosages with cannabis as he does with other painkillers and that the dispensary staff treated him with respect.

Kelley-Jo Wendlandt, a MediLeaf member who volunteers at the dispensary, said she has undergone four back surgeries for spinal disorders, including botched operation. As a result, she has used medical marijuana for the past nine years and has traveled to dispensaries as far as Oakland.

"They're doing everything right," she said of MediLeaf. "There have been a couple of places in Oakland that I didn't think were right at all."

Neighboring businesses this week had mixed reviews. Staff members at Togo's Eatery and Rock Zone both said Monday that they were happy to see the dispensary open, touting its medicinal value for patients.

However, Anthony Figueroa, owner of Antdawg's Universal Strength Headquarters, a martial arts studio that stands next to the dispensary, said he thinks the dispensary should move next to other pharmacies. Both he and his brother Angel, who co-owns the business, said several children belong to their martial arts studio, and they thought the dispensary was a bad fit for the area. The Figueroas also complained of particularly young-looking people walking into the dispensary. They would likely move their business elsewhere if MediLeaf stays in the shopping center.

Owners of First Street Coffee House also were not enthused.

"I'm not a fan," said Kassi Thomas, whose parents John and Konni Thomas own the business. "I'm not happy about it. I think it's pretty rude that they opened without the city's (approval.)"

Konni Thomas said she understands that medical marijuana can help people such as cancer patients. However, she thought there was a better location for the dispensary, and she was concerned about its potential clientele.

"This parking lot has a bad history of drug dealing," she said.

Although many residents who showed up at the dispensary on Tuesday said they patronized the cooperative solely to help with medical ailments, a few teenagers - at least one of whom claimed to have no medical problems at all - were scoping out the store.

As Rock Zone manager Cassie Lopez explained the differences between medical cannabis and street-bought marijuana, 16-year-old Jeremiah Loyd proclaimed, "It's the same thing, though - bud's bud."

Loyd had previously entered the front lobby of the dispensary, and he was flipping through a copy of a magazine and looking at a picture of an EZ Grow Mushroom Kit as he stood in Rock Zone. Lopez kicked him out of the store following his comment.

Loyd and his friend, 18-year-old Edwin Dominguez, said they checked out the inside of the dispensary, but they did not become members.

They said they advised MediLeaf staff to have a menu of their marijuana options.

Dominguez believed he would be able to obtain a card because he was 18, although he said he does not suffer from any ailments.

MediLeaf staff members have maintained that only adults with a doctors note will be able to apply for membership at the cooperative.

Gilroy-based Enterprise Protective Services is providing security for the clinic, and sales director Miriam Vega said staff will aim to prevent loitering in the parking lot and prevent problems with any protesters who might show up. Security measures included 16 cameras and patrol units, she and Kuburovich said.

Eric Madigan, who is serving as the dispensary's ombudsman and is handling its security issues, said cities cannot keep up with changes in the industry.

The American Medical Association this week urged federal officials to reconsider marijuana's classification as an illegal controlled substance to allow for clinical research and the use of cannabis-based medicines, he said.

MediLeaf is working out business license issues, Madigan said, telling a potential member that the business license was a matter for "technocrats and bureaucrats to work out."

Still, Haglund said the dispensary must adhere to all federal, state and city laws, and he said the situation in Gilroy is similarly to one in the city of Claremont. In that case, a state appellate court ruled in the city's favor after a dispensary chose to operate without a business license.

"Unfortunately, (MediLeaf) is an illegally operating business at this time," Haglund said.

What's is the dispensary like?

After entering the business's glass front door into a sterile lobby devoid of furniture except for a chair facing a window and counter, clients pass through another door into a waiting area lined with several chairs. There, they fill out a clipboard of paperwork, receive an oral briefing by Kuburovich on the rules and regulations of medical marijuana, and are searched by a security guard with a metal-detecting wand. Clients are escorted through two more doors before entering a large room lined on one wall with a glass counter topped with several varieties of cannabis - some of the 31 different types the dispensary sells, Kuburovich said.

What does the law say?

State law permits medical marijuana dispensaries but federal law prohibits cannabis across the board. Without a local law, City Attorney Linda Callon said last month that staff are unable to process MediLeaf's business application. The applicants had argued they deserve due process in front of the planning commission, which can impose project-specific conditions on unorthodox business applications.

One of many cases winding its way through state courts came from the Second District Court of Appeals last month. The court upheld a Claremont city ban on dispensaries, a move which suggests cities can bar citizens from setting up shops that are specifically permitted by state laws. In addition, the Los Angeles County District Attorney announced last month that prosecutors would pursue hundreds of "over the counter" collectives in the area that exchange marijuana for cash - a sticky situation Santa Clara County Deputy District Attorney Steve Lowney told the council it should avoid by working with District Attorney Dolores Carr on any proposed ordinance.

While the proposed ordinance would have regulated store hours, security requirements and products, council members said they were swayed to vote against it by an outpouring of e-mails and phone calls from constituents. They also expressed concerns of a dispensary inviting legal interference from above.

Reporter Sara Suddes contributed to this article.