Deep in the Weeds: California Leaves Marijuana Regulation in Hands of Cities and Counties

Some cannabis businesses are finding it difficult  to know what’s legal and permissible in the patchwork of California’s legal marijuana landscape, giving greater meaning to the “location, location, location” adage.

While thousands of licenses have been issued to cannabis businesses since recreational use became legal in January, California’s local governments continue to have the final say over what extent, if any, recreational or medical marijuana operations will be allowed in those areas.

Counties and cities  can choose to regulate and control medical or recreational marijuana activity, they can temporarily prohibit studying it —or ban it  outright.

Lance Rogers, an attorney in the law firm Greenspoon Marder’s cannabis law practice group, is spending a great deal of time educating clients on various local laws and regulations, such as zoning regulations that restrict where certain businesses can operate, as well as rules that local governments have in place for cannabis businesses.

“Under state law, municipalities have final say over whether to allow cannabis businesses or not,” Rogers said. “California is made up of a patchwork of different city and county laws that regulate or ban marijuana businesses. A state license requires local approval so even if a business is lawful under California law it must be in a property that is zoned for that use. In this sense, cannabis ventures have essentially become competitive real estate development projects in many places.”

He added, “It’s illegal under fed law, it’s legal under state law and it may or may not be legal under local law.”

The most recent figures from the California’s Bureau of Cannabis Control show the bureau has received 3,257 applications from cannabis businesses, and has issued 1,132 licenses from January to present.

The figures provided by the bureau also show the California Department of Food and Agriculture, which licenses growers, has so far issued 3,226 licenses since January, while the California Department of Public Health has received 1,229 temporary license applications and currently has issued 601 active temporary licenses.

Things seem to be going green at the state level, but local authorities are all over the map, particularly where counties are concerned.

The Los Angeles County Board of Supervisors in June 2018 left in place a ban on commercial cannabis  in unincorporated areas, despite numerous legal dispensaries open with state and local licenses in incorporated cities.

L.A. County’s Department of Consumer and Business Affairs on June 19, 2018, presented three options to the board: allow and regulate all types of medical and recreational commercial cannabis activity, limit the types of cannabis businesses that can open, or keep the ban in place.

The Kern County Board of Supervisors at a June 26 meeting took no action on a recommendation that could have led to the establishment of seven legal medicinal dispensaries throughout the county. The lack of action could result in the closure of several medical dispensaries already in operation in the county.

Supervisors wanted more information on the proposal, while others stated outright distrust for the cannabis industry, according to a story in The Record, a news site owned by the Bakersfield Californian.

“I don’t trust this industry,” Kern County Supervisor Mick Gleason was quoted in the Record article, following public comments on the proposal. “I’ve heard all of you talk. I don’t care for many of the things I hear. I don’t believe in the integrity of the system. I believe there are patients in need, and I believe marijuana can deliver a quality medicine, but I don’t believe that the industry is mature enough to deal with it without the fraud I see rampant in the industry.”

A proposed ordinance creating rules for cannabis businesses in unincorporated Riverside County was scheduled for  a hearing before the county Planning Commission on Wednesday, July 18, 2018. The ordinance, which would allow a variety of marijuana business to operate in unincorporated areas, will eventually go to the Board of Supervisors for approval.

Monterey County appears to be moving forward with regulations for allowing limited outdoor commercial cannabis growing. The board voted in early July 2018 to direct staff to start drafting rules for allowing outdoor cannabis cultivation in certain areas.

The San Joaquin County Board of Supervisors also in July 2018 approved ordinances to regulate commercial and private cannabis cultivation, all of which must be grown indoors under the rules, which are expected to be given final adoption on Aug. 7, 2018.

David Rheins, founder and executive director the Marijuana Business Association, told that what California is now going through isn’t much different than what states like Washington and Oregon have already dealt with.

“What we are seeing in California is consistent with what we’ve seen from other states as they transition from black to grey to legally regulated markets,” Rheins said. “The sausage-making of reform is not pretty.”

He noted that California is the largest, oldest, and most unregulated “medical marijuana legacy market” in the country.  

“There will undoubtedly be disruption and heartache as hard decisions and compromises are made in the transition to a legal industry,” he said. “The process of integration of legal cannabis into the local communities — the mainstreaming of marijuana into the local economy and the local culture — is iterative. It will take time and experience to right-size regulations, taxes and oversight.”

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