E-Mail Forum
  Richmond Takes Wait-and-See Approach on Pot Club Regulation
May 12, 2010

On April 27, the City Council voted to continue the moratorium on marijuana dispensaries until at least November to see if there is any significant change in the legal landscape following voter action on pending state propositions. To access the staff report from April 27, click on PROVIDE direction to staff regarding the sitting and operating characteristics of marijuana-related uses to prevent diversion of medical marijuana to non-medical uses and to preserve the public health, safety and welfare - Planning and Building Services Department (Richard Mitchell 620-6706).
There is a lot of pressure on City Council members to allow marijuana dispensaries in Richmond, and the existing illegal stores are pressing the hardest to maintain their priority in case the City Council does eventually allow a limited number of outlets. They continue to claim that the absence of a law allowing dispensaries gave them the right to file a fraudulent business license application and open a business. The Richmond city attorney has opined that they are all operating illegally, in violation of local, state and federal law, and the City Council has authorized legal action to shut them down pending resolution of public policy with respect to dispensaries in Richmond.
This issue has not drawn a lot of public comment over the past five years or so that it has periodically emerged as a public policy issue in Richmond. I would like to get a sense of where most people are on it, and I invite public response to this E-FORUM.
My sense is that virtually all of the speakers who have shown up at City Council meetings to speak on it are owners of existing illegal dispensaries, public relations people employed by them or their customers. We simply haven’t heard much from anyone else.
Advocates for the dispensaries maintain that there are thousands of “patients” in Richmond who depend on this medicine (one dispensary at Hilltop claims 10,000 patients), that the dispensaries are legal under state law and that they are legitimate businesses and good neighbors.
Detractors, which include the Richmond Police Department, maintain that dispensaries are a violation of both state and federal law and that they function to distribute marijuana far and wide beyond those who legitimately use it as medicine and are not good neighbors at all. For a police perspective, see http://www.ondcp.gov/news/speech10/030410_Chief.pdf. Just last week, one of the two Point Richmond dispensaries was robbed of cash and pot.
The fact is that most cities and counties in California have banned “dispensaries.” Those relatively few cities that have passed ordinances allowing and regulating dispensaries typically limit the number to about one per 100,000 of population. Under this approach, Richmond would allow one. Assuming Richmond embraced such a law, there would be only one instead of the existing eight or 10 illegal dispensaries now operating.
Following are several pertinent media excerpts, and I urge you to particularly read the pro and con +articles from the most recent issue of Western City.

  • “Robbers take money, pot from Richmond dispensary,” Contra Costa Times, 5/7/10
  • “Alameda passes pot club ban,” The Associated Press, 5/10/10
  • “Richmond takes wait-and-see approach on pot club regulation,” Contra Costa Times, 4/28/10
  • “Addressing the Issue of Medical Marijuana Dispensaries,” (“The Legal Basis for Banning Medical Marijuana Dispensaries” and “The Legal Basis for Allowing Medical Marijuana Operations”) Western City, May 2010
  • Also see City council continues ban on new pot dispensaries, Richmond Confidential, January 21, 2010 and Richmond Speaks on marijuana, December 11, 2009

Robbers take money, pot from Richmond dispensary

By Katherine Tam
Contra Costa Times

Posted: 05/07/2010 04:48:55 PM PDT
Updated: 05/07/2010 04:48:56 PM PDT

RICHMOND — Robbers stole money and marijuana from a Point Richmond dispensary Thursday night.
Someone walked into the Pacific Alternative Health Center on Washington Avenue at 11:30 p.m. and left the front door open, said police Lt. George Garcia. Three men wearing hooded clothing came in afterward and confronted an employee. They took cash and some marijuana.
No one was injured, Garcia said.
Anyone with information is asked to call the Police Department's robbery division at 510-620-6647.
Richmond city leaders are looking at a new law that would regulate medical marijuana dispensaries such as the number, location and fees they would pay. A new policy won't go into effect until after the November election because the city wants to see if a statewide initiative to legalize recreational use of marijuana for people 21 and older passes.
Katherine Tam covers Richmond. Follow her at Twitter.com/katherinetam.

Alameda passes pot club ban

The Associated Press
Posted: 05/08/2010 11:29:38 AM PDT
Updated: 05/08/2010 11:29:39 AM PDT

ALAMEDA, Calif.—City officials in Alameda have voted to ban medical marijuana dispensaries.
The City Council's unanimous decision on Tuesday came as a moratorium on the opening of any new pot club was set to expire.
The city currently does not have any medical marijuana clubs, so the law will not affect any existing businesses.
A pot club in the city closed last year after officials accused its owner of misleading them about the nature of the business on his business application and said the dispensary was a nuisance.
Mayor Beverly Johnson said she did not think pot clubs are what California voters envisioned when they voted to legalize marijuana for medical use in 1996.
But supporters of the clubs say they are safe way to purchase the marijuana they need for their medical conditions.
Information from: The Oakland Tribune, http://www.oaklandtribune.com

Richmond takes wait-and-see approach on pot club regulation

By Katherine Tam
Contra Costa Times

Posted: 04/28/2010 01:36:03 PM PDT
Updated: 04/28/2010 06:17:21 PM PDT

What happens in November could shape Richmond's policy for pot clubs in town.
City leaders are watching to see whether a statewide initiative to legalize recreational use of marijuana for people 21 and older succeeds before they assemble their own law regulating dispensaries.
"It doesn't make sense for us to spend time and energy to set up a plan that could become obsolete in November," Councilman Jim Rogers said.
Like other cities, Richmond is wrestling with how to regulate medical marijuana dispensaries, including the number, location, what fees they should pay and how the city can ensure cannabis doesn't go to those who aren't legally allowed to have it.
Richmond, with a population of 102,000, is home to seven confirmed pot clubs, although some say the number is as high as 10. One has been around for five years, but most opened roughly within the past year. At least one opened after the city passed an emergency moratorium to try to stop the influx.
The city attorney's office has issued cease-and-desist orders for all confirmed clubs and is following up with court proceedings. Dispensaries are not listed as a permitted use in the existing municipal code, City Prosecutor Trisha Aljoe has said.
Marijuana is illegal under federal law, but California voters passed a medical marijuana measure in 1996 allowing use with a doctor's recommendation.
Richmond's moratorium expires in 2011, and officials expect to pass a new law after the November election.
The City Council on Tuesday night offered a glimpse of what such a law might look like. Council members are leaning toward limiting dispensaries to commercial zones and capping the number allowed, although they didn't settle on a figure. Other cities vary widely, from those that ban pot clubs to those that offer over-the-counter permits. Oakland, which has a population four times the size of Richmond's, issues a maximum of four permits.
The council appeared divided on whether to start with a clean slate and have everyone apply for permits or grandfather in existing dispensaries.
Councilman Tom Butt doesn't want to permit those now operating.
"I'm really troubled by the idea of rewarding the pioneers in breaking the law," he said.
Councilman Nat Bates favors allowing dispensaries that have operated for two or three years, but not those that opened more recently. Vice Mayor Jeff Ritterman suggested reviewing the existing clubs and deciding which to permit because he said it doesn't make sense to shut them all down.
"We've already got a whole lot of patients who are depending on these," Ritterman said.
Katherine Tam covers Richmond. Follow her at Twitter.com/katherinetam.
Addressing the Issue of Medical Marijuana Dispensaries
by Michael Jenkins, Lauren Feldman, Sonia Carvalho and Jeff Dunn
Addressing the Issue of Medical Marijuana Dispensaries

About Legal Notes
 This column is provided as general information and not as legal advice. The law is constantly evolving, and attorneys can and do disagree about what the law requires. Local agencies interested in determining how the law applies in a particular situation should consult their local agency attorneys.

In recent years perhaps no other legal issue has affected California’s cities as much as medical marijuana. Cities have experienced a proliferation of dispensaries and other types of storefront medical marijuana distribution operations. While some cities allow dispensaries to provide medical marijuana, other cities have enacted outright bans on their use.

Although the possession, use and cultivation of marijuana is illegal under both state and federal laws,1 California law allows an individual to use marijuana for certain medicinal purposes and creates a narrow affirmative defense to state criminal prosecution. In other words, when a person is arrested for marijuana possession, he can avoid being found guilty by asserting the defense that he is entitled to possess marijuana for medical purposes because he has complied with state law. In 1996, California voters approved Proposition 215, an initiative called the Compassionate Use Act (CUA) that allows people to use marijuana under certain circumstances for medical reasons.2 The CUA was intended to “ensure that seriously ill Californians have the right to obtain and use marijuana for medical purposes where that medical use is deemed appropriate and has been recommended by a physician who has determined that the person’s health would benefit from the use of marijuana in the treatment of cancer, anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis, migraine or any other illness for which marijuana provides relief.”3

To further implement the CUA, the Legislature passed the Medical Marijuana Program Act (MMP) in January 2004.4 The MMP created, among other things, a voluntary program for issuing government identification cards to qualified patients and their defined primary caregivers, and it created rules and regulations pertaining to the operation of cooperatives and collectives. One of the MMP’s more interesting aspects is that it explicitly articulates that it does not pre-empt a city’s local land-use authority; it is primarily this section of the MMP that has sparked the ongoing debate over how a city may regulate dispensaries.

The two articles presented here examine the legal standards and practices under which cities may enact local laws either to ban or regulate medical marijuana dispensaries.

The Legal Basis for Banning Medical Marijuana Dispensaries

by Sonia Carvalho and Jeff Dunn

Sonia Carvalho is a partner in the Irvine office of the law firm Best Best & Krieger. She has served as city attorney for numerous California cities and can be reached at sonia.carvalho@bbklaw.com. Jeff Dunn is also a partner in the Irvine office of the law firm Best Best & Krieger. He represents cities throughout California on medical marijuana dispensary issues and can be reached at jeffrey.dunn@bbklaw.com.

 Cities traditionally exercise nearly exclusive control over land use. They regularly invoke their land-use authority to limit or prohibit the location of various types of businesses and operations within their communities. They do so under their basic police powers, which permit them to adopt laws protecting health, safety and welfare. In instances where the state has not pre-empted local law-making authority, a city is free to regulate. Medical marijuana dispensaries are not expressly mentioned in either the Compassionate Use Act (CUA) or in the Medical Marijuana Program Act (MMP); and in the recent City of Claremont v. Kruse case the court’s decision confirmed that these laws do not pre-empt a city’s enactment or enforcement of land use, zoning or business license laws as they apply to medical marijuana dispensaries.1
 When a city’s zoning code does not allow marijuana dispensaries or collectives, and it expressly states that any condition caused or permitted to exist in violation of its provisions constitutes a public nuisance, the city can ban the use. Accordingly, the city may enjoin the nuisance by filing a civil abatement action. Despite claims that the state’s medical marijuana laws prevent cities from regulating marijuana dispensaries, the California Court of Appeal’s thorough analysis of state pre-emption law in Kruse concluded that cities retain their police power to regulate and, if necessary, restrict the operation of dispensaries.
The courts have recognized that the CUA and the MMP create only narrow exceptions to criminal drug possession penalties. Numerous judicial decisions have confirmed that California voters approved limited defenses to possession of marijuana and did not intend to allow large-scale commercial operations. Most important to the theory that cities retain the right to ban dispensaries is the 2005 People v. Urcizeanu decision, in which the court of appeal noted that the CUA “creates a narrow defense to crimes, not a constitutional right to obtain marijuana.”2
Two Methods for Banning Marijuana Dispensaries
Some dispensary operators have obtained business permits under false pretenses, applying for city land-use and business permits under the guise of pharmacies or other permissible uses.3 In other cases operators outright refused to comply with city laws requiring business permits.4 Operators like these have been ordered by the courts to cease business based on the regulations that the cities had in place.
There are two primary methods cities use to ban dispensaries:
Adopt a business license provision that says licenses will be issued only to those operating in compliance with state and federal law; and
Prohibit dispensaries in all land-use zones.
Nearly 200 California cities have either banned pot collectives or have enforced moratoriums, according to Americans for Safe Access. The medical cannabis advocacy group reports on its website that 34 cities in California have specific ordinances that allow for medical marijuana cooperatives.
Pending Litigation
The City of Anaheim enacted an ordinance in 2007 banning all marijuana distribution facilities consisting of three or more people who otherwise qualified as patients or caregivers under California’s MMP and CUA. The ban imposed a criminal penalty.
A collective called the Qualified Patients Association filed a lawsuit challenging the ban. The collective argued that local governments’ ability to ban marijuana collectives is pre-empted by the California medical marijuana law. The collective argued that local governments may regulate but not ban marijuana distribution facilities.
The trial court disagreed, concluding there was no pre-emption and that Anaheim could use its police powers to ban marijuana distribution facilities and impose a criminal penalty for violating the ban. The collective has appealed and the matter is pending in the Fourth District Court of Appeal.
Unresolved Issues
While some cities have adopted ordinances permitting marijuana dispensaries under certain rules and regulations, the question of whether cities can authorize such uses by ordinance remains unclear. Government Code section 37100 states that a city’s “legislative body may pass ordinances not in conflict with the Constitution and laws of the state or the United States.” As all use of marijuana is illegal under federal law, cities may lack the authority to adopt enforceable ordinances permitting marijuana dispensaries under any rules or regulations.
 1 The California Supreme Court denied review and further denied requests to have the Kruse opinion depublished. City of Claremont v. Kruse, 2009 Cal. LEXIS 12497 (Cal., Dec. 2, 2009).
2 People v. Urcizeanu (2005) 132 Cal.App.4th 747.
3 City of Corona v. Naulls (2008) 166 Cal.App.4th 618.
4 City of Claremont v. Kruse (2009) 177 Cal.App.4th 1153.

The Legal Basis for Allowing Medical Marijuana Operations

by Michael Jenkins and Lauren Feldman

Michael Jenkins and Lauren Feldman are attorneys in the law firm of Jenkins & Hogin, which serves as city attorney for 11 Southern California cities and as special counsel for cities throughout the state. Jenkins can be reached at mjenkins@localgovlaw.com. Feldman can be reached at lfeldman@localgovlaw.com.

This article addresses how cities that support patients’ access to medical marijuana can use an effectively drafted ordinance to permit properly run cooperatives or collectives, regulate them and keep them from proliferating.
 California cities may adopt ordinances that do not conflict with state or federal laws.1 Marijuana is a controlled substance that may not be cultivated, possessed or used under federal law.2 The U.S. Supreme Court determined that strict compliance with California’s medical marijuana program will not insulate a marijuana user or supplier from federal prosecution.3 Nonetheless, the current U.S. Justice Department has indicated that dispensaries operating in accord with California law will not be a priority for federal prosecution.
In California, marijuana can be used legally for personal medical use. Two panels of the California Court of Appeal found in recent years that California’s medical marijuana program is not pre-empted by federal law;4 they concluded that the state’s decriminalization of medical marijuana does not conflict with federal law because it does not purport to “legalize” marijuana or immunize marijuana possession or use from federal prosecution. Rather, California has decided not to punish certain marijuana offenses when used for medicinal purposes.5 Until a court determines otherwise California’s program does not conflict with federal law, and a local ordinance sanctioning medical marijuana collectives meets the requirement to be consistent with federal law.
A local ordinance regulating cooperatives and collectives is also consistent with state law. The Legislature stated a clear intent to enhance medical marijuana access through collective and cooperative cultivation projects,6 indicating the law contemplates collective distribution. Nothing in state law prohibits collectives from maintaining a place of business,7 and each city must determine how to regulate this use to ensure collectives operate within the narrow parameters of state law. Consequently, an ordinance permitting a use that is contemplated under state law and implements a state policy by making medical marijuana more accessible to seriously ill patients should be considered a proper exercise of a city’s legislative authority.
The California Court of Appeal has determined that the state’s authorization of cooperatives and collectives is intended to facilitate the transfer of medical marijuana to qualified patients. The court also found that storefront dispensaries that qualify as “cooperatives” or “collectives” and otherwise comply with state law, as interpreted by the attorney general, may operate legally.8
The attorney general published guidelines to clarify how a legitimate cooperative or collective is operated. The guidelines:

  • Limit lawful distribution activities to true agricultural co-ops and collectives that provide crops to their members;
  • Prohibit collectives and cooperatives from profiting from the sale of marijuana;
  • Allow members to be reimbursed for certain services (including cultivation), provided that the reimbursement is limited to the amount to cover overhead costs and operating expenses;
  • Allow members to reimburse the collective for marijuana that has been allocated to them.9 Marijuana may be provided free to members, provided in exchange for services, allocated based on fees for reimbursement only, or any combination of these; and
  • Declare that distribution of medical marijuana is subject to sales tax and requires a seller’s permit from the State Board of Equalization.

Unlike an agricultural cooperative, a “collective” is not defined under state law, but it similarly facilitates agricultural collaboration between members. A co-op, by definition, files articles of incorporation and must abide by certain rules for its organization, elections and distribution of earnings. A co-op’s earnings must be used for the general welfare of its members or be distributed equally in the form of cash, property, services or credit. Both co-ops and collectives are formed for the benefit of their members and must require membership applications and verification of status as a caregiver or qualified patient; they must also refuse membership to those who divert marijuana for non-medical use. Collectives and co-ops should acquire marijuana from and allocate it to only constituent members.
Storefront dispensaries that deviate from these guidelines are likely outside the scope of state law and may not be permitted at the local level.
Regulating Medical Marijuana Collectives and Cooperatives
The most obvious methods for regulating the distribution of medical marijuana are through a zoning ordinance or regulatory business license ordinance — or a combination of both. Some cities require that collectives obtain a conditional use permit. West Hollywood recently rejected this approach. The city wanted a mechanism to examine an operator’s criminal background and did not want the use to run indefinitely with the land. Consequently, the city’s medical marijuana collectives are a permitted use in certain commercial zoning districts subject to distancing requirements from sensitive uses and other collectives, with a cap of four facilities operating at one time.
West Hollywood consulted with existing collective operators when drafting the operating requirements contained in its regulatory business license ordinance.10 The requirements include criminal background checks, compliance with the attorney general’s standards for collectives (such as cash management practices), security requirements, limitations on operating hours, and a requirement that marijuana cannot be consumed onsite. Collectives may not occupy a space larger than 4,000 square feet, may not issue doctor recommendations onsite and are subject to limitations on the source of the collective’s marijuana. The city holds bimonthly meetings with law enforcement and collective operators to address any negative impacts associated with the operations.
On the other hand, the cities of Arcata,11 Santa Cruz12 and Malibu13 effectively regulate collectives by requiring a use permit and imposing strict distancing requirements and operating standards. Arcata additionally subjects each collective to an annual performance review.
Most cities that permit collectives have determined that the distancing requirement and a cap on the number of facilities are the most effective ways to prevent an overconcentration of this use. The combination of the effective regulatory mechanism and the working relationship with collective operators has also proven to meet the goals of supporting access to medical marijuana while controlling negative impacts and the proliferation of collectives in a city.
1 Cal. Govt. Code section 37100.
2 21 U.S.C. Sections 801 et seq.
3 Gonzalez v. Raich (2005) 545 U.S. 1.
4 San Diego et al v. NORML (2008) 165 Cal.App.4th 798; Garden Grove v. Superior Court (2007) 157 Cal.App.4th 355.
5 Garden Grove 157 Cal.App.4th 355; see also Attorney General August 2008 Guidelines for Security and Non-Diversion of Marijuana Grown for Medical Use (“Guidelines”).
6 Stats, 2003, c. 875 (S.B. 420), Section 1, subd. (b)(3).
7 People v. Hochanadel (2009) 176 Cal.App.4th 347, 363.
8 Hochanadel 176 Cal.App.4th at 363.
9 See Cal. Health and Safety Code Section 11362.765.
10 West Hollywood Municipal Code Chapter 5.70.
11 Aracta Municipal Code Section 9.42.105.
12 Santa Cruz Municipal Code Section 24.12.1300.
13 Malibu Municipal Code Section 17.66.120.