Recently, California passed a rule to allow the statewide delivery of cannabis. However, a legal battle between the state and 25 cities is brewing after the cities went to court to have that rule overturned.
When California legalized marijuana, local governments were given the right to decide whether cannabis businesses and sales would be permitted in their jurisdictions and the conditions under which such operations could be permitted.
Many local governments exercised their right and opted to ban recreational cannabis from their jurisdictions. The new rule allowing cannabis retailers to deliver cannabis to “any address” within the state has angered the local authorities and 25 of them have gone to court over the matter since the rule would, in effect, render their position to ban cannabis ineffective.
At the core of this lawsuit is a desire to determine whether it is the state regulators in charge, or the local authorities where marijuana is cultivated and sold.
Marijuana companies and consumers advocated for the passing of the rule allowing the delivery of cannabis in the state because there were large “marijuana deserts” created by the action of local authorities that banned marijuana in their jurisdictions.
Those “deserts” made it difficult for people, especially frail patients, in those areas to access cannabis and yet the products were legal in the state.
Prop 64, the law under which cannabis became legal in California, indicates that cannabis can be delivered anywhere in the state by employees of a licensed cannabis retail business.
The cities that have gone to court therefore seem to be interested in establishing whether that provision overrides their power to restrict cannabis businesses from operating within their jurisdictions.
The state insists that the delivery rule is merely reinforcing what is already in the law while the cities argue that cannabis businesses are trying to circumvent the ban imposed by local governments. The cities insist that the deliveries should only be to the areas where the local governments have consented to the operation of cannabis businesses in their areas.
Currently, California is the largest cannabis market within the U.S., but many residents have been finding it hard to buy marijuana because of the ban imposed by several local authorities. This case is therefore going to be a landmark one since the ruling may make a definitive determination of how the cannabis industry in the state will operate.
The Green Organic Dutchman (TSX: TGOD) (OTCQX: TGODF), Therma Bright, Inc. (TSX.V: THRM) (OTC: THRBF) and the entire marijuana industry are watching with bated breath to see how the court will rule on this latest source of friction between the state and the local governments.
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