On November 17, 2020, the Fresno District Supreme Court dismissed a lawsuit filed by 24 California cities to invalidate state cannabis regulations that allow cannabis to be supplied to customers in jurisdictions where commercial cannabis is retail are forbidden. Many players and the media in the industry are touting the layoff as a “win” for California cannabis companies. We have a different attitude. This is because cities and counties are still allowed to ban delivery after the release. It’s just that the State Bureau of Cannabis Control (BCC) won’t be forced to enforce these prohibited local regulations.
As we stated last year, plaintiffs sought to invalidate and permanently prohibit enforcement of Title 16, Section 5416 (d) of the California Code of Regulations. According to plaintiffs, Regulation 5416 (d) allows the delivery of commercial cannabis to a physical address anywhere in the state, which is contrary to the plain language of sections 26090 and 26200 of the Business and Professions Code. Section 26090 (e) of the Business and Professions Code permits deliveries of cannabis, but only if such operations comply with local law. Section 26200 (a) allows a local jurisdiction to regulate or prohibit the operation of commercial cannabis businesses within its boundaries. Plaintiffs contend that “Regulation 5416 (d) is in direct contradiction to the plain language of sections 26090 and 26200 of the Business and Professions Code, which guarantee the right of local jurisdiction to regulate or restrict commercial cannabis operations within its boundaries to forbid.”
However, the BCC contended that the issues were not ripe for decision because “Regulation 5416 (d) does not directly contradict or anticipate plaintiffs’ local ordinances because the regulations do not order local jurisdictions to do anything, and Do not prevent them from doing anything. “The court agreed with the BCC, stating,”[s]especially [Regulation 5416(d)] does not order local jurisdictions, including plaintiffs, to permit delivery. It also does not override local ordinances that prohibit or regulate delivery. “The BCC advised that the delivery rules apply to state licensees, not local jurisdictions. Hence, the regulation and the plaintiffs’ local regulations do not occupy the same territory and do not conflict.
While many refer to this as a win for the industry, the decision only helps to maintain the status quo. In its decision, the court pointed out that “[l]Local jurisdictions may impose regulations and health and safety standards that are stricter than state law. The standards set by the BCC are the minimum standards for licensees across the state and local jurisdiction[s] can set additional standards, requirements and regulations. ‘(Bus. & Prof. Code, § 26201). The BCC is not required to enforce plaintiffs’ local ordinances. “
This ruling confirms that local jurisdictions may in fact have more restrictive regulations prohibiting delivery within their jurisdiction, as state law does not anticipate these regulations. Many jurisdictions, including here in the city of San Francisco, have already issued such delivery bans on companies that are not licensed in that jurisdiction. The problem was the ability of local jurisdictions to effectively enforce these restrictions, rather than the validity of the restrictions themselves.
This decision makes it clear that cities and counties can prohibit delivery within their jurisdiction, but the BCC is not involved in enforcing those prohibitions and the task of enforcement is left to the local jurisdictions.