California Hashish Supply Lawsuit: “It’s NOT a Revenue” for the Trade
As of 2019, cannabusiness owners in California have been involved in a lawsuit over a lawsuit aimed at further restricting access to legal marijuana for recreational use. A verdict was finally passed last week.
What at first seemed like a victory for the cannabis industry eventually revealed the reality that these litigation are likely far from over. In case you need a refresher, the first lawsuit was filed by 25 local city governments suing the California Bureau of Cannabis Control, arguing that “the delivery policy violates state law by undermining its ability to regulate the cannabis trade locally Level overrides “.
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Basically, they have already banned pharmacies within the city limits, and now they want to ban delivery services too. And this new regime enables them to do just that, with two important aspects to consider.
It upheld state rule that allows licensed marijuana delivery companies to offer services anywhere in the state. It has been confirmed that cities and counties can ban these operations, although enforcement of the bans is also a responsibility of local governments.
In other words, marijuana companies and delivery companies might choose to continue delivering to cities where they are banned, but they are at risk of costly litigation with these local governments. Or they could abide by the ban but would immediately lose all of their income from this entire city.
“It’s not a loss, but not a gain for delivery,” said Zach Pitts, CEO of Los Angeles-based Ganja Goddess and a board member of the California Cannabis Couriers Association. “What I really don’t like is the possibility that we have yet to litigate this,” said Pitts. “And in many ways, it means small businesses are getting into litigation … with every single town and county deciding to ban delivery.”
Sacramento-based attorney Khurshid Khoja called the verdict a disaster and said, “I don’t see this as a victory at all,” said Khoja. “If this is a victory for anyone, it is a victory for the cities.”
Marijuana industry lawyer Dana Cisneros of Anaheim Hills described the decision as “disappointing,” adding, “I think a lot of people are going to be confused today. I’ve seen headlines before … that shipments can be made in any jurisdiction, even if a city prohibits it. It was a very hair-raising decision, with the court simply saying, “These are regulations governing licensees, not local jurisdiction, so there is no conflict.”
Cisneros went on to say that the “real” impact is the extra hoops cannabis operators have to jump through when they are already drowning in compliance regulations.
“It’s just another level of insane compliance that our retailers have to adhere to because if you ship in California now, you better know what local laws apply in each and every city,” she added.
As of last month (November 2020), only 187 of California’s 540 jurisdictions allow marijuana businesses to operate. Another 42 jurisdictions in California have banned pharmacies from the store front, but allow businesses outside of their borders to provide delivery services.
Enforcing such laws is notoriously difficult anyway, as city regulators would have to scrutinize every single pharmacy that opens where there are many. Not to mention the fact that most of them no longer advertise on weedmaps or a central marketing website. Hence, it is next to impossible to know exactly how many pharmacies exist in a given area and what they do.
According to Pitts, it all boils down to one thing. “So it’s really going to come out: how do these cities that have bans decide to enforce them?”
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