The BCC’s Battle to Permit Residence Supply All through California
It’s no secret that California’s hashish operators are at present in a regulatory and enterprise setting the place pink tape, the unlawful market, and important taxes make life exhausting. On the similar time, the state is making an attempt to guard, promote, and develop the trade in a wide range of methods, one in every of which is combating off cities and counties to make sure that retail hashish house supply is allowed in each metropolis and/or county it doesn’t matter what.
As a short historical past primer, California is a really sturdy native management state in the case of hashish. Pursuant to the Medicinal and Grownup-Use Hashish Regulatory and Security Act (“MAUCRSA”), earlier than you possibly can safe a state license to your hashish enterprise you have to first acquire native approval from town or county wherein you propose to function. And the vast majority of cities and counties nonetheless ban industrial hashish exercise; those that do enable it are likely to lean in direction of medical-only gross sales and/or there may be some severe limitations to entry relying on town or county. Additional, Proposition 64 (which co-exists with MAUCRSA) has clear guarantees and directives to take care of native management and a metropolis’s or county’s potential to ban any type of industrial hashish exercise outright (excluding the transport of hashish between licensees through public roads).
At present, in keeping with MAUCRSA:
“[MAUCRSA shall] not be interpreted to supersede or restrict the authority of a neighborhood jurisdiction to undertake and implement native ordinances to manage companies licensed underneath this division, together with, however not restricted to, native zoning and land use necessities, enterprise license necessities, and necessities associated to lowering publicity to secondhand smoke, or to utterly prohibit the institution or operation of a number of forms of companies licensed underneath this division inside the native jurisdiction.”;
“A neighborhood jurisdiction shall not forestall supply of hashish or hashish merchandise on public roads by a licensee performing in compliance with [MAUCRSA] and native regulation. . . .”; and
“Licensing authorities shall not approve an utility for a state license underneath this division if approval of the state license will violate the provisions of any native ordinance or regulation [. . .] The licensing authority shall deny an utility for a license underneath this division for a industrial hashish exercise that the native jurisdiction has notified the [Bureau of Cannabis Control (“BCC”)] is prohibited [. . .].”
In January of this yr, pursuant to the ultimate MAUCRSA rules, and regardless of the foregoing, the BCC decided–seemingly primarily based on the “use of public roads” language above–that house supply doesn’t require any metropolis or county native approval underneath MAUCRSA. Subsequently, BCC defined that retailer licensees can undertake house supply in any jurisdiction within the state– even in those who utterly ban supply. Particularly, the BCC adopted Rule 5416(d), which says that “A supply worker could ship to any jurisdiction inside the State of California offered that such supply is performed in compliance with all supply provisions of this division.”
Because of BCC’s motion, 24 cities sued the BCC in Fresno County court docket earlier this yr to overturn the brand new supply rule. Right here’s the criticism to your viewing pleasure. The crux of the combat is whether or not the brand new supply rule is according to Proposition 64 and MAUCRSA and whether or not the BCC has the authority to undertake and implement the rule. The cities argue the brand new supply rule is totally inconsistent with each, and that the BCC has gone past its rulemaking authority underneath MAUCRSA. The cities additionally allege that if the BCC needs statewide supply with none type of native management the California Meeting is the physique to lawfully make that decision through a change to the statute.
Whereas the cities and the BCC duke it out over interpretations of MAUCRSA and the BCC’s regulatory authority (with a calendared trial date of April 20 subsequent yr), a brand new litigation matter has developed the place a hashish operator (East of Eden) is suing Santa Cruz County to implement its rights underneath the brand new supply rule. Earlier this month, the BCC (through the State Legal professional Basic) filed a movement to hitch the native lawsuit to guard the brand new supply rule. The BCC is in any other case staying mum for every other strategic causes it has for becoming a member of the native beef. We’ll know by January 2 whether or not or not the BCC will get to be a celebration within the Santa Cruz lawsuit. And we totally anticipate that this will not be the final native combat over the brand new supply rule.
The underside line is that within the wake of the BCC and the cities combating it out over the brand new supply rule, hashish operators dangle within the steadiness but once more. Threat tolerant companies will little question attempt to benefit from the brand new supply rule, however they accomplish that at important threat the place cities and counties are nonetheless taking the place that the rule is invalid anyway. In flip, except and till we’ve a ultimate determination from a court docket on the matter, hashish retailers can be sensible to pump the brakes on supply into cities and counties that explicitly ban it.