California’s Medical Marijuana Regulation and Safety Act (MMRSA) (comprised of AB 266, AB 243 and SB 643) has raised the question for many producers, processors and dispensary operators of who or what governing body will have the ultimate say in regulating their future businesses. And those entrepreneurs looking to crack into big markets like Los Angeles want to know what kinds of opportunities the new regulations will produce, if any.
And the answer, for better or for worse, is that a multitude of California state entities, including the Bureau of Medical Marijuana Regulation (part of the Department of Consumer Affairs), the Department of Food and Agriculture, the State Department of Public Health, the Board of Equalization, the California Department of Pesticide Regulation, the Department of Fish and Wildlife, the State Water Resources Control Board, the California Medical Board, as well as all local governments will get a piece of the authoritative pie. AB 243 states that, “[i]f a city, county, or city and county does not have land use regulations or ordinances regulating or prohibiting the cultivation of marijuana, either expressly or otherwise under principles of permissive zoning, or chooses not to administer a conditional permit program pursuant to this section, then … the [state] shall be the sole licensing authority for medical marijuana cultivation applicants in that city, county, or city and county.” We expect most local governments will choose not to relinquish their regulatory powers to the state.
Cannabis businesses currently operating in California cities or counties with highly restrictive marijuana zoning regulations are concerned, and rightly so, that not much will change for them with the implementation of the MMRSA. Ultimately, no matter how many licenses the state is willing to issue, cities and counties can essentially opt out and prevent people from doing business there.
Los Angeles is an excellent example of a city in which we do not expect to see many new opportunities under the MMRSA. We’ve written extensively about Los Angeles’ challenges in regulating its medical marijuana market (see here, here, and here) and of how the city’s tactics via Proposition D are often unique and ineffective. Not to mention there’s the following special carve-out for (only) the City of Los Angeles in AB 266:
Issuance of a state license or a determination of compliance with local law by the [state] shall in no way limit the ability of the City of Los Angeles to prosecute any person or entity for a violation of, or otherwise enforce, Proposition D, approved by the voters of the City of Los Angeles on the May 21, 2013, ballot for the city, or the city’s zoning laws. Nor may issuance of a license or determination of compliance with local law by the [state] be deemed to establish, or be relied upon, in determining satisfaction with the immunity requirements of Proposition D or local zoning law, in court or in any other context or forum.
We blogged earlier this week about L.A.’s stance on delivery services, which we agree (unfortunately) are still illegal. So what hope is there for those looking to expand into Los Angeles? Or into any California city with exceedingly restrictive marijuana zoning requirements, moratoria or bans in place? Unfortunately, the answer seems to be “not a lot.”
California’s new medical cannabis laws will go a long way toward lending legitimacy to new and existing medical cannabis businesses, but they will not do much to change local laws (or, likely, attitudes). If anything, we’ve seen local governments in California tightening their regulations in anticipation of the new legislation. So, keep abreast of what’s happening with your local regulators and how they’ve treated medical marijuana to date – it’s likely an indication of what’s to come.