California City’s Marijuana Delivery Rule Sparks Lawsuit by Cannabis Co.

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On Jul 28, 2019

A California city is facing litigation brought by a cannabis company claiming the rule barring deliveries from out-of-county retailers into unincorporated areas violates state statute.

In East of Eden Cannabis Co. v. Santa Cruz County, filed in the local Superior Court, the Salinas-based firm is fighting for the right to be allowed to deliver to these regions. Los Angeles cannabis attorneys know that precedence set in this case could potentially impact how other courts decide similar cases in the future.

In particular what is interesting about this case is not so much the substance of the complaint, but the fact that it echoes a familiar refrain echoed following the passage of Prop. 64, which gave local governments broad discretion in regulating marijuana growth, sales and distribution in their jurisdictions. This has led to a patchwork of laws that can be as confusing as they are frustrating.

What is allowable in county or city may not be in those neighboring. The onus is on the company or individual to know what the rules are – which is why consulting with an attorney in the course of your business planning is imperative.

Attorneys for the plaintiff say the county has taken a position that is untenable and illegal. It’s worth noting that many jurisdictions opted to ban cannabis sales altogether, leaving large areas of population with no means to purchase. Some within the marijuana industry have complained that these so-called cannabis deserts are against the spirit if not the letter of state law.

Some restricted only delivery sales or, like Santa Cruz, barred outside deliveries.

California Regulations Favor Marijuana Delivery Businesses

Late last year, the California Bureau of Cannabis Control made it clear that cities couldn’t entirely restrict marijuana deliveries. It was controversial, with the California League of Cities vehemently protesting.

Although pursuant to California Business and Professions Code Section 26200, local governments do have the express permission to regulate and/or ban marijuana businesses, another section of law, California Business and Professions Code Section 26090(e), a local jurisdiction can’t prevent delivery of marijuana or related products on public roads, so long as the company is licensed and in compliance with state law (specifically the Control, Regulate and Tax Adult Use of Marijuana Act).

Per California Code of Regulations, Title 16, Division 42, § 5416(d), a state delivery employee can deliver to any jurisdiction within the state of California, so long as the delivery is conducted in compliance with all state delivery provisions.

Although there were many groups opposed to these rules, the proposed rules were created with the express intent of giving fledgling cannabis delivery companies the opportunity for greater success.

California Cities Continue to Resist Cannabis Delivery

The cannabis control board’s holding on this and the purported conflict between that and the part of Prop. 64 that gives local government free reign to make their own rules means case like this are ripe for the courts.

A couple of the larger communities with noteworthy cannabis bans include:

Huntington Beach
Most Cities in San Diego (though county is silent on the issue of deliveries, but bans all other marijuana businesses).

Other communities, like Merced County, have bans on storefront cannabis, but allow deliveries. Only a few of embraced both outright.

Los Angeles marijuana attorneys know this has made for a confusing patchwork for companies trying to abide the rules. Discussing your operations with an attorney who can carefully research your local ordinances and ensure compliance is an imperative to avoid civil forfeiture, arrest and/or heavy fines.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 714-937-2050.Additional Resources:

Salinas pot company sues Santa Cruz County over ban on out-of-area deliveries, July 17, 2019, By Nicholas Iberra, Santa Cruz Sentinel