Until recently, the “Wild West” of U.S. cannabis lacked robust statewide regulations which left California cannabis companies subject to unclear rules and risk of federal shutdowns. The Medical Marijuana Regulation and Safety Act (MMRSA) created these regulations, but ultimately left control in the hands of local cities and counties.
At last count, California has 58 counties and 482 incorporated cities across the state, each with the option to create its own rules or ban marijuana altogether. In this California Cannabis Countdown series, we plan to cover who is banning, who is waiting, and who is embracing the change to legalize marijuana — permits, regulations, taxes and all. For each city and county, we’ll discuss its location, history with cannabis, current law, and proposed law to give you a clearer picture of where to locate your cannabis business, how to keep it legal, and what you will and won’t be allowed to do. Our last California Cannabis Countdown post was on the City of Los Angeles, and before that, the City of Desert Hot Springs, Sonoma County, the City of Sacramento, the City of Berkeley, Calaveras County, Monterey County and the City of Emeryville.
Welcome to the California Cannabis Countdown.
Los Angeles County has followed a long and winding road on the path to marijuana legalization. Though at one point the County passed comprehensive regulations for medical marijuana dispensaries, which remain in the County Code to this day, it has since instituted a ban on almost all marijuana activities within unincorporated areas of the County. Following a ban on medical marijuana dispensaries, this year the County adopted a ban on marijuana cultivation, manufacturing, testing, and distribution as well.
Location. Los Angeles County is the most populous county in the United States encompassing the City of Los Angeles as well as 87 other incorporated cities and many unincorporated areas. It has a population of more than ten million people that includes more than one quarter of all California residents and is one of the most ethnically diverse counties in the country.
History with Cannabis. On May 31, 2005, the Los Angeles County Board of Supervisors adopted Interim Ordinance No. 2005-0042U, prohibiting the establishment of medical marijuana dispensaries within unincorporated areas of the County pending the development of appropriate regulations. The temporary ban was later extended twice.
On May 9, 2006, the Board passed Ordinance 2006-0032, which established regulations and use and development standards for medical marijuana dispensaries in the County Code, including requiring a conditional use permit to operate in specific zones.
On May 16, 2006, the Board passed Ordinance 2006-0036, which established categories, processes and fees for medical marijuana dispensaries.
On December 7, 2010, the Board amended the County Code to institute a complete ban on medical marijuana dispensaries within all unincorporated areas of the County. The ordinance went into effect on January 6, 2011.
On February 2, 2016, the Board voted to draft a temporary ban on medical marijuana cultivation and to consider a permanent ban. However, a ban on mobile marijuana delivery services was withdrawn.
On April 12, 2016, the Board enacted a temporary 45-day ban on marijuana cultivation, manufacturing, laboratory testing, and distribution under Interim Ordinance No. 2016-0022U.
On May 24, 2016, the Board voted to extend the temporary ban for an additional month through Interim Ordinance No. 2016-0027U. At this time, the Board decided to postpone extending the ban for a longer period.
On June 28, 2016, the Board voted once again to extend the temporary ban for an additional year.
Current Cannabis Laws. There is currently a ban on all medical marijuana activities, except for mobile delivery, in all unincorporated areas of Los Angeles County.
Under Section 22.56.196(B) of the County Code, “medical marijuana dispensaries which distribute, transmit, give, or otherwise provide marijuana to any person, are prohibited in all zones in the County.” The ban is to remain in place unless and until a California Court of Appeal or the California Supreme Court holds that the ban is unlawful, at which point the pre-existing requirements and restrictions in the County Code regulating the permitting and operation of medical marijuana dispensaries will become effective.
Interim Ordinance No. 2016-0022U provides that “[n]o facilities, premises, or property shall be established, developed, leased, rented, or used for ‘cultivation,’ ‘manufacturing,’ ‘laboratory testing,’ or ‘distribution’ of medical marijuana” as these activities are defined in the ordinance. This ban has been extended through June 28, 2017.
Current Cannabis Enforcement. As we did in our post on the City of Los Angeles, we will now forgo our usual discussion of “Proposed Cannabis Laws” (once again considering that there are currently no published proposed ordinances in Los Angeles County), and instead discuss how the County is currently enforcing against illegal marijuana businesses.
In March, the Los Angeles County Board of Supervisors voted to crack down on illegal marijuana dispensaries and recommended setting up a streamlined Medical Marijuana Dispensary Enforcement Team “to shut down and prosecute” these illegal businesses. The team would include representatives from the Department of Regional Planning, Sheriff’s Department, and the offices of the County Counsel, District Attorney and Treasurer-Tax Collector.
Later that same month, the Board adopted an ordinance which made explicitly clear that it is illegal to rent or lease property to medical marijuana dispensaries in unincorporated areas of Los Angeles County. The targeting of landlords in the Los Angeles area is a serious issue that anyone even thinking of renting property to an illegal marijuana business should consider. The penalties for offenders are high – including daily fines, risk of property forfeiture, and possible jail time – and should be weighed against any potential profits from renting to an illegal business that will in all likelihood be forced to shut down by the County or by the state when state licensing begins in 2018.
Though it seems Los Angeles County is not planning to permit and regulate medical marijuana businesses anytime soon, it did recently consider an initiative to impose a 10% tax of the gross receipts of medical marijuana businesses in order to fund the County’s homelessness efforts. Some hoped the tax was a sign the County would remove its current marijuana ban, however, the County later decided to pull the marijuana tax initiative from the November ballot. Most of the anticipated tax proceeds would only have been raised if California voters decided to legalize recreational marijuana later this year.
In conjunction with inquiries regarding the City of Los Angeles, our California cannabis lawyers often receive calls requesting advice on how to start and operate a marijuana business in unincorporated areas of Los Angeles County. Yet Los Angeles County is even less friendly than the City of Los Angeles when it comes to allowing marijuana businesses within its boundaries. For both interested marijuana business owners and prospective landlords in Los Angeles County, the best advice at this time is to look elsewhere if you hope to operate a legal medical marijuana business. There are several cities and counties in Southern California that are welcoming marijuana businesses with open arms that we would almost certainly be better choices. Unfortunately, Los Angeles County simply isn’t open for discussion, at least right now.