As more and more cannabis businesses open up shop in California, cities and counties in the state are faced with a local enforcement problem. Over the past few years, several cities and counties have passed local ordinances to allow for and regulate marijuana businesses within their boundaries. By complying with these local ordinances and obtaining proper permits, as may be required, many marijuana businesses are able to operate legally in the state for the first time. However, the ongoing transition from an illegal market to a legal California marijuana market has also led to a divide between the legal marijuana businesses and those that continue operating illegally under not only federal but now state and local laws as well.
Local authorities in San Diego are facing this problem head on as they work to enforce their marijuana laws. There are currently 14 legally permitted dispensaries in San Diego that operate in compliance with the city ordinance adopted in 2014. The city has been attempting to enforce its ordinance against illegal operations through civil enforcement actions in court, which often result in multimillion dollar fines for the violating dispensary. Judges have also issued injunctions to keep the offending dispensary from reopening in the same location or anywhere else in the city. However, so far these civil penalties have not been an effective deterrent.
Thus, on April 20, 2016 (usually associated as a day of celebration for cannabis consumers), San Diego City Attorney Jan Goldsmith announced his office would begin pursuing harsher, criminal prosecutions against illegal San Diego dispensaries. The City Attorney’s office is aware of at least 35 dispensaries currently operating illegally in the city and it stated that the majority of these illegal businesses are repeat offenders, who reopen their stores in new locations even after being shut down. In addition, Goldsmith claims many of these illegal businesses lack security and at times have felons and weapons on the premises. These so called “hardcore offenders” are the target of the city’s new efforts to enforce its local rules through criminal prosecution.
The city’s position is also supported by the local community and legal marijuana business owners. Community members have expressed concerns that illegal dispensaries are located too close to schools and other protected locations that state and local rules require dispensaries to distance themselves from, and owners of legal dispensaries in San Diego have argued that the illegal business are unfair competition as they continue to operate illegally without having to shell out the roughly $500,000 cost of obtaining a proper city permit.
Under San Diego’s new and tougher enforcement approach, illegal marijuana businesses as well as their landlords will face the risk of serious criminal convictions, including a criminal misdemeanor for violating local zoning laws which can result in jail time. For anyone still considering operating an illegal marijuana business in California, it is time to reevaluate as cities and counties are quickly catching up and not hesitating to use force to shut you down. And when statewide regulation kicks in under the Medical Marijuana Regulation and Safety Act (MMRSA) in 2018, the state is also expected to take action to shut down any marijuana businesses in violation of state rules.
The takeaway is that operating an illegal marijuana business is not a good idea for anyone wanting to avoid individual liability, and also not a good long-term strategy if you’re hoping to form and grow a profitable marijuana business during the oncoming green rush. If you’re serious about getting in compliance, review your local ordinances, work with your local authorities, and consult a professional if you need more guidance. It’s finally possible to operate a legal marijuana business in California; so why not avoid the multimillion dollar fines and possible jail time by doing it right?