BREAKING NEWS: Marin County Rejects All Cannabis Dispensary Appeals

Marin County Cannabis
Marin County Cannabis: fog with a bit of sun

We’ve written recently about Marin County in our Cannabis Countdown series. We started with a history and update of Marin County’s medical cannabis ordinance. We then followed up with an update when the County Administrator rejected all ten applicants for medical cannabis dispensary licenses in Marin County (unincorporated Marin that is). Of the ten applicants that were denied, eight filed appeals to the rejections by the County Administrator and seven presented oral arguments before the Marin County Board of Supervisors and the public on May 23rd (one applicant withdrew its appeal before the hearing).

Before hearing the appeals, the County Administrator and Marin County Board of Supervisors released their reasoning behind their rejection of the applicant’s request for medical cannabis dispensary licenses. Although they varied from applicant to applicant there were a couple of common threads our readers will find useful:

  1. Applicants that did not have prior experience running cannabis dispensaries were facing an uphill battle. Sure, people can learn on the job, but a lack of experience is not going to be viewed favorably. If an applicant did not have a substantial background running cannabis dispensaries it was one of the first things the Board of Supervisors pointed out.
  2. The tiniest details do matter, especially if you’re hoping to open up a cannabis business in a jurisdiction that’s apprehensive about allowing in cannabis businesses. The Marin County ordinance listed 17 criteria for review in determining whether to grant or deny a medical cannabis dispensary license (See Section 6.85.061 of Ordinance 3639). Make sure your application clearly and forcefully addresses every single one of these areas for review because if you don’t, your minor oversight(s) could very well be the cause for denying your application. This is something we know well from the hundreds of cannabis applications we have done in multiple states (mostly California, Washington and Oregon).
  3. Not every locality is ready to open up to for-profit cannabis businesses. Mind you, I’m not talking about recreational cannabis use under the Adult Use of Marijuana Act (AUMA) but for-profit medical cannabis businesses allowed under California’s Medical Cannabis Regulation and Safety Act (MCRSA). The Marin County Board of Supervisors was quick to point out if an applicant was well-positioned to convert from a non-profit entity to a for-profit one. They were concerned that a for-profit entity would be more concerned about sales than the health concerns of their patient members and being a good community partner. Such a concern may have been unfounded but it didn’t diminish the weight the board placed on the distinction between non-profit and for-profit cannabis businesses.
  4. This is California so don’t ever forget about traffic and parking. The Board considered either a likely increase in traffic or insufficient parking spots as an issue with every single applicant. America is a pretty divided country on many issues right now, but I’ve yet to see a pro-traffic party so be prepared to address this issue as everyone is concerned with it.
  5. Public support is important. What was clear from the start was that most of the applicants had learned their lessons from the public hearings previously held during the application process – which were overwhelmingly attended by those against cannabis businesses. There were many people in the audience there to support of the applicants, as demonstrated by stickers favoring certain dispensary applicants and more encouraging comments when the floor was open to the public. Practice, practice, practice. Although not a stated reason for their rejection, it was clear some of the applicants did not spend enough time properly preparing their oral arguments to the Board of Supervisors. Your attorney represents your business so select them wisely. It’s also important to highlight that tone matters. One applicant seemed to treat the Board with outright contempt. You may find yourself before that board again or word of your behavior will travel across the state and imperil your future endeavors; so take a deep breath before you tell a Board of Supervisors at a public hearing how you really feel. Not a good strategy.

Professionalism, tone, and demeanor are especially important because although the Marin County Board of Supervisors dished out heavy doses of stick, they also dangled a carrot at the end of the hearing by requesting the County Administrator’s office and its working group report back to the Board with suggestions for a medical delivery business licensing plan. There’s no denying that these hearings were a momentary setback for the medical cannabis movement in Marin County but there were some positives to take away. First and foremost, the Board of Supervisors reiterated its desire to provide Marin County residents with safe access to medical cannabis and to structure a licensing program to meet that need. Second, Marin County and its municipalities will want to address this issue or they will continue to lose significant tax revenue to neighboring counties. Yesterday was not a good day for cannabis in Marin County, but there are more days ahead.