As cannabis business lawyers, it is our job to be very precise. As such, there are two issues about which we frequently find ourselves having to correct our clients. In many different states.
The first is when our clients in states or counties or cities where marijuana has been decriminalized tell us that marijuana is legal there. It isn’t.
You can be fined for parking in a no parking zone but you cannot be jailed for that. The same is true for decriminalized marijuana.
The other big difference between decriminalized marijuana and legalized marijuana is that when marijuana is legalized, it can and is regulated and taxed–there’s a legal chain of distribution. Decriminalization typically means that it is not regulated and many normal taxation rules do not apply.
The second is when our clients just assume that because marijuana is legal in their state that it is also legal wherever they may be in the state. Unfortunately, that is not always true.
Let’s look at four states by way of example:
Washington. Recreational marijuana is legal in Washington State for both licensed entrepreneurs and adults 21 and over, but there are a number of cities and counties that have prohibited selling marijuana within their city limits. This prohibition is of questionable legality, but unless and until someone prevails on a lawsuit against one of these cities, the prohibition is there. It bears noting that a bill is currently pending in the state legislature to prohibit cities and counties from banning marijuana.
California. California obviously doesn’t have recreational marijuana as they’re still operating under a medical marijuana system. Sales of marijuana are prohibited and the usual business model is a non-profit based on donations. Nonetheless, each city literally has a different ordinance or ban in play (Los Angeles seems to constantly ban and repeal its local marijuana laws). Moreover, California’s State supreme court last year ruled that cities could freely ban marijuana commercial activity because the law never said they couldn’t.
Illinois. Illinois is moving forward with legalizing medical cannabis, but there is already talk by a number of cities and counties of banning medical cannabis locally or looking to aggressively zone it into near non-existent areas. We urge cannabis stakeholders in Illinois to contact their state lawmakers and suggest that they follow the lead of the politicians in Washington and seek to enact a state law prohibiting the balkanization of medical cannabis laws within the state. If the locals don’t participate, the industry will never successfully get off the ground.
Nevada. Nevada is also in the throes of revising its medical marijuana program to allow for licensed dispensaries. Though the state has finally clarified that a licensed chain of distribution will take place, we recently blogged about the Las Vegas City Attorney’s absolute refusal to move forward with implementation in Sin City. Even though what happens in Vegas stays in Vegas, the authorities there have cold feet over marijuana.
Oregon. Oregon, like Nevada, has revised its dispensary laws to provide for a licensed State system. Nonetheless, cities are still continuing to ban marijuana commercial activity, characteristically hanging their hats on waiting until the legislature and regulatory agencies make their decisions. This is a mistake for cities if a State law has passed and the regulatory agencies are promulgating rules. It’s incumbent upon all industry players to get a seat at the table with their city councils to ensure that their voice is heard. Education and participation, people. That’s the way to prevent one of these draconian bans.
The bottom line? Marijuana regulation is a moving target on the local level. Even though state legislatures may be enlightened enough to listen to their constituents to pass these laws, that in no way means that all cities and counties within the state are on the same page. What that means for you is that you must stay educated on the laws and politics in your area because it could be the difference between commerce and crime.