The Battle for California Cannabis Access is a Roadmap for States Considering Legalization

22 Apr The Battle for California Cannabis Access is a Roadmap for States Considering Legalization

Over the last few years, California has gained a reputation of being a state where cannabis is completely legal and out in the open. In reality, cannabis isn’t nearly as “free” as people think it is in the Golden State, with many cities outright banning commercial cannabis activities. Right now, there is an ongoing battle between the state and local governments for access to cannabis, which should be the first place that states (and possibly even Congress) look when considering legalization.

For background, the operative state cannabis law in California—the Medicinal and Adult-Use Cannabis Recreation and Safety Act (“MAUCRSA”)—allows cities and counties to “adopt and enforce local ordinances to . . . completely prohibit the establishment or operation of one or more types of businesses licensed under this division within the local jurisdiction.” This provision (as well as some other related ones) have created a great deal of tension between state and local governments.

The result of this comprehensive local control is that some local governments reject commercial cannabis activity altogether, or only allow very limited licensing and/or no retail sales or delivery. For example, only a small handful of the approximately 90 cities in Los Angeles County allow cannabis retail sales. To boot, many other localities throughout the Golden State prohibit deliveries within their borders. This continued prohibition even occurs in many cities whose voters approved of adult use cannabis sales back in 2016.

Local bans have created a good deal of regulatory and administrative chaos throughout the state, including the fact that the state is not netting the expected tax revenue it would otherwise receive if all local markets were open. One sticking point in particular is the fact that cities that don’t allow cannabis businesses also don’t even allow delivery to their citizens. According to the state though, that’s going to change. And fast.

The Bureau of Cannabis Control (“BCC”) recently created a regulation that allows deliveries by licensed cannabis retailers into any city or county in the state regardless of any local delivery ban. This was widely praised in the cannabis industry but was immediately attacked by localities.

To combat open deliveries, legislation was introduced (AB-1530) to specifically allow cities to forbid deliveries. AB-1530 recently failed passage on April 9, 2019 but may be reconsidered. A number of California cities also recently sued the BCC over this regulation. The litigation was only just filed, but we expect that the cities will move to enjoin the BCC’s implementation of this new open delivery rule—the result would be that deliveries could only occur in cities that allow them, which is the status quo. We don’t yet know how that litigation will unfold but will continue to follow it as it progresses.

Another recently introduced piece of legislation is AB-1356 would require local jurisdictions to allow certain local retail permitting if local voters voted in favor of the Control, Regulate and Tax Adult Use of Marijuana Act of 2016. In other words, AB-1356 would overrule local governments where local voters approved of the adult-use precursor to MAUCRSA.

One thing that’s obvious from these recent challenges and new bills is that there is room for compromise. Cities that don’t want to have brick-and-mortal cannabis operations, for example, could agree to allow regulated deliveries. Whether they agree or not, any total ban is likely to be ineffective and may only result in the further proliferation of the existing black market. Cannabis prohibition didn’t work previously; it’s not likely to work now on the local level either.

This battle is ultimately important for jurisdictions considering adopting cannabis laws. The point of legalization, regulation, and taxation is to outpace the black market and ensure safe and reliable access to cannabis with public health in mind—not to impose additional costs on the state and to shift disputes from the criminal courts to the civil ones. While local control is important and serves a legitimate purpose for protecting communities, lack of access to cannabis will really only serve to harm communities where the unregulated and unscrupulous black market rages on.