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In this April 30, 2012 photo, Police Chief Terry Holderness poses outside his office in Ashland, Ore. Holderness says a new medical marijuana restaurant in town is not at the top of his priority list, but if authorities determine it violates the law, he w Jeff Barnard, Associated Press
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In this April 30, 2012 photo, co-owner Kevin Wallace pours a shot of hashish-infused grapeseed oil over an order of stir-fried vegetables and meat at the Earth Dragon Edibles Restaurant & Lounge in Ashland, Ore. While medical marijuana cafes abound in Por Jeff Barnard, Associated Press
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In this April 30, 2012 photo, medical marijuana patient Christine Totten uses a cereamic heat stick to light a bong loaded with hashish April 30, 2012 in the Earth Dragon Edibles Restaurant & Lounge in Ashland, Ore. Only medical marijuana cardholders are Jeff Barnard, Associated Press
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In this April 30, 2012 photo, co-owner Michael Shea displays some hashish available for smoking at the Earth Dragon Edibles Restaurant & Lounge in Ashland, Ore. While people have to pay for a bowl of stir-fried vegetables and meat at the restaurant for me Jeff Barnard, Associated Press
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In this April 30, 2012 photo, Michael Shea, left, and Kevin Wallace walk out of their Earth Dragon Edibles Restaurant & Lounge in Ashland, Ore. Medical marijuana patients have to pay for the food, but the hashish-infused oil poured over the stir-fry is fr Jeff Barnard, Associated Press
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In this April 30, 2012 photo, co-owner Kevin Wallace prepares a bowl of medical marijuana stir-fry at the Earth Dragon Edibles Restaurant & Lounge in Ashland, Ore. Owners had hoped they were within the law by not charging for the marijuana, but have hit a Jeff Barnard, Associated Press
By Associated Press

ASHLAND, Ore. — A new restaurant has opened in Oregon, where only medical marijuana cardholders can get in the door.

The owners of the Earth Dragon Edibles Restaurant & Lounge in Ashland were hoping they had come up with a business plan that fit within the gray area of Oregon's medical marijuana law. While they charge for bowls of Mongolian barbecue, they give away for free the hashish-infused oil added as medication.

But the city of Ashland is denying them a business license, saying a city ordinance bars licenses for anyone violating state or federal law.

Police say that if it is finally determined the restaurant is violating the law, they will shut it down.

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Owners Kevin Wallace and Michael Shea are staying open while they appeal.

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