RegTalk: California State Vs. Municipal Battle Heats Up As The 42% Of Cities That Said No To Cannabis May Be Forced To Open Stores

By Susan Ameel, co-founder and partner of Global Regulatory Risk Advisors.

The United States is witnessing the rise in state power. The states are uniting to fight the federal government, lead social causes such as global warming, and they are driving innovation. We are also witnessing the rise in municipal power as cities fight to retain control over regulating the place, time and manner of businesses within their jurisdiction. Recently, twenty-five (25) cities banded together to sue the state over its implementation of cannabis regulations that allowed marijuana delivery in every city, regardless of whether the city prohibited this activity.  The cities believe that cannabis delivery is a public nuisance that will increase crime. 

The California Legislature ratcheted up this debate by scheduling a public hearing on a bill tomorrow that preempts a local municipalities control to prohibit cannabis establishments. The bill would require a city to permit adult-use cannabis storefronts if 50% of the voters in the municipality voted for Proposition 64.  The bill requires the city to permit one (1) retail cannabis licenses for every four (4) liquor licenses.

The cities are fighting back.  Cities such as Carpinteria are submitting letters to the California Legislature objecting to the preemption of local control over these businesses and the arbitrary 1 for 4 license requirements.  This is significant given that our database for California indicates that over 42% of cities prohibit cannabis altogether.  Although we are seeing a slight trend of cities revisiting this decision as a part of budget considerations.

As states fill the federal void, we are seeing an increased battle between the state and local municipalities in other states such as Oregon and Florida.  California’s cannabis delivery lawsuit will provide us some insight on the future of a state’s ability to drive the growth of an industry at the local level.

Related Links:

RegTalk: Whether You Want To Sell Your Cannabis Business Or Go Public, Embrace Compliance

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