Adult Use of Marijuana Act
While the League of California Cities has no position on Proposition 64, the Adult Use of Marijuana Act, in response to multiple inquiries from member cities, League Staff have prepared a Memorandum and a Frequently Asked Questions document, explaining how the regulatory landscape for local governments, particularly cities, will change if Prop. 64 passes in November. The presence of this information on our website should in no way be construed as an endorsement of the initiative, but rather a pro-active effort by the League to keep our members prepared for and forewarned about various local regulatory contingencies, with a view toward maintaining local control.
NOTE: Currently the only ordinances the League has received on recreational cannabis are bans. However, we do have resources providing guidance on local ordinances that regulate rather than ban recreational cannabis. Medical ordinances can provide helpful guidance on what recreational ordinances should look like, and can be a useful tool until local jurisdictions begin enacting recreational ordinances. Our medical cannabis ordinances webpage is therefore a helpful resource in this interim period which may last through January 2018.
A key fact to remember is that there is little appreciable difference between an ordinance that regulates medical marijuana, and an ordinance that regulates recreational cannabis. Both are agricultural products and are chemically identical for purposes of local regulation. For this reason, the ordinances on the League’s medical cannabis webpage provide a useful guide for those cities seeking to craft recreational marijuana ordinances.
There are just two key differences to bear in mind in crafting a recreational marijuana ordinance, post-Proposition 64:
- Since the passage of Proposition 64, local governments can no longer ban indoor cultivation for personal use. Such ordinances are now invalid, even if enacted before Prop. 64 took effect. However, locals can “reasonably regulate” indoor cultivation for personal use. For example, local cultivation permits with an appropriate fee may be required if that is the will of the jurisdiction.
- Proposition 64 prohibits state and local governments from levying sales tax of any kind on medical marijuana. Excise taxes such as business license taxes, cultivation taxes, or manufacturing taxes on medical marijuana remain valid. And, sales taxes on recreational marijuana can still be levied by locals.
With these governing principles, all that remains is to decide what you want the rules to be for both recreational and medical marijuana in your city. Cities are cautioned that their marijuana ordinances should be reviewed to be certain their scope specifically includes both recreational and medical marijuana. At least one city is now in litigation because it relied on a purely medical marijuana ordinance to regulate recreational marijuana businesses.
Sample Ordinances Regulating Adult Use Cannabis
- Coalinga Ordinance: Prohibits dispensaries but allows all of the following commercial cannabis activities: Cultivation, Processing, Extraction, Manufacturing, Testing, Distribution, Transportation
- Beverly Hills Cannabis Ordinance (Deliveries Only)
- Emeryville Cannabis Ordinance
- Fremont Cannabis Ordinance
- Santee Cannabis Ordinance
- Shasta Lake Ordinance: Regulates cultivation, manufacturing, testing, distribution, transportation and retail sales of cannabis.
- City of Santa Rosa: Regulates cultivation and establishes cultivation limits for personal medical and adult use; regulates commercial medical cannabis businesses, including dispensaries, non-volatile manufacturing, testing, distribution and transportation; sets standards for security, odor, lighting and noise; addresses over concentration of dispensaries with buffers to schools and other dispensaries.
Medical Marijuana Regulation and Safety Act
In a historic move, Gov. Jerry Brown signed a comprehensive package of bills to establish a regulatory structure around the state’s multi-billion dollar medical marijuana industry. For the first time since voters passed Proposition 215 in 1996, multiple stakeholders including local government, law enforcement, unions and portions of the industry, came to an agreement on what the regulatory structure should look like. Together, AB 266, AB 243, and SB 643 comprise the Medical Marijuana Regulation & Safety Act.
AB 243 (Wood) Medical Marijuana
- Places the Department of Food and Agriculture (DFA) in charge of licensing and regulation of indoor and outdoor cultivation sites. Creates a Medical Cannabis Cultivation Program within the department.
- Mandates the Department of Pesticide Regulation (DPR) to develop standards for pesticides in marijuana cultivation, and maximum tolerances for pesticides and other foreign object residue.
- Mandates the Department of Public Health (DPH) to develop standards for production and labelling of all edible medical cannabis products.
- Assigns joint responsibility to DFA, Department of Fish and Wildlife (DFW), and the State Water Resources Control Board (SWRCB) to prevent illegal water diversion associated with marijuana cultivation from adversely affecting California fish population.
- Specifies that DPR, in consultation with SWRCB, is to develop regulations for application of pesticides in all cultivation.
- Specifies various types of cultivation licenses.
- Directs the multi-agency task force headed by DFW and SWRCB to expand its existing enforcement efforts to a statewide level to reduce adverse impacts of marijuana cultivation, including environmental impacts such as illegal discharge into waterways and poisoning of marine life and habitats.
AB 266 (Bonta, Cooley, Jones-Sawyer, Lackey, Wood) Medical Marijuana
- Protects local control as it establishes a statewide regulatory scheme, headed by the Bureau of Medical Marijuana Regulation (BMMR) within the Department of Consumer Affairs (DCA).
- Provides for dual licensing: state will issue licenses, and local governments will issue permits or licenses to operate marijuana businesses, according to local ordinances. State licenses will be issued beginning in January 2018.
- Revocation of a local license or permit will unilaterally terminate the ability of the business to operate in that jurisdiction.
- Expressly protects local licensing practices, zoning ordinances, and local constitutional police power.
- Caps total cultivation for a single licensee at four acres statewide, subject to local ordinances.
- Requires local jurisdictions that wish to prevent delivery services from operating within their borders to enact an ordinance affirmatively banning this activity. No specific operative date for the ban is specified.
- Specifies that DCA will issue the following licenses: Dispensary, Distributor, Transport, and Special Dispensary Status for licensees who have a maximum of three dispensaries. Specifies various sub-categories of licensees (indoor cultivation, outdoor cultivation, etc.)
- Limits cross-licensing to holding a single state license in up to two separate license categories, as specified. Prohibits medical marijuana licensees from also holding licenses to sell alcohol.
- Grandfathers in vertically integrated businesses (i.e. businesses that operate and control their own cultivation, manufacturing, and dispensing operations) if a local ordinance allowed or required such a business model and was enacted on or before July 1, 2015. Also requires such businesses to have operated in compliance with local ordinances, and to have been engaged in all the covered activities on July 1, 2015.
- Requires establishment of uniform health and safety standards, testing standards, and security requirements at dispensaries and during transport of the product.
- Specifies a standard for certification of testing labs, and specified minimum testing requirements. Prohibits testing lab operators from being licensees in any other category, and from holding a financial or ownership interest in any other category of licensed business.
- Includes a labor peace agreement under which unions agree not to engage in strikes, work stoppages, etc. and employers agree to provide unions reasonable access to employees for the purpose of organizing them. Specifies that such an agreement does not mandate a particular method of election.
- Provides for civil penalties for unlicensed activity, and specifies that applicable criminal penalties under existing law will continue to apply.
- Specifies that patients and primary caregivers are exempt from the state licensing requirement, and provides that their information is not to be disclosed and is confidential under the California Public Records Act.
- Phases out the existing model of marijuana cooperatives and collectives one year after DCA announces that state licensing has begun.
- Preserves enforcement authority of the city of Los Angeles with respect to Measure D, the local regulatory structure for medical marijuana within the city limits.
SB 643 (McGuire) Medical Marijuana
- Directs the California Medical Board to prioritize investigation of excessive recommendations by physicians.
- Imposes fines ($5000.00) against physicians for violating prohibition against having a financial interest in a marijuana business.
- Recommendation for cannabis without a prior examination constitutes unprofessional conduct.
- Imposes restrictions on advertising for physician recommendations.
- Places DFA in charge of cultivation regulations and licensing, and requires a track and trace program.
- Codifies dual licensing (state license and local license or permit), and itemizes disqualifying felonies for state licensure.
- Places DPR in charge of pesticide regulation; DPH in charge of production and labelling of edibles.
- Upholds local power to levy fees and taxes.
In 2014, the League and the California Police Chiefs Association cosponsored SB 1262 by Sen. Lou Correa (D-Santa Ana).
Adult Use of Marijuana Act:
Key Guidance Documents
Webinar Briefing Presentation
In-Person Briefing Presentations
Medical Marijuana Regulation and Safety Act:
Key Guidance Documents
Webinar Audio
In-Person Briefing Presentations
Adult Use of Marijuana Act:
Rescission of Federal Marijuana Enforcement Policy Sends Shock Waves throughout California
January 8, 2018
The U.S. Department of Justice’s Jan. 4 announcement and memo on marijuana enforcement delivered a shock to the industry in California, causing stock prices in the few publicly traded marijuana-related companies to plummet by as much as 50 percent.
However, it is not certain that the new policy will lead to a significant increase in federal enforcement activity.
The memo represents a reversal of federal policy that conflicts with California state law, which expressly provides for local control and home rule in the context of marijuana regulation. This change is especially important for cities that are proceeding with implementation of legalized commercial marijuana sales.
In the Jan. 4 memo to U.S. attorneys, U.S. Attorney General Jeff Sessions specifically rescinded several guidance documents issued by the U.S. Department of Justice pertaining to marijuana enforcement going back to 2009, but most notably the August 2013 Cole Memo and the February 2014 Guidance regarding Marijuana Related Financial Crimes.
The Cole Memo provided guidance to states that legalized cannabis for either medical or adult use. Specifically, it listed eight criteria states should observe if they wished to avoid becoming a target for federal enforcement. They are:
- Preventing the distribution of marijuana to minors;
- Preventing revenue from the sale of marijuana from going to criminal enterprises, gangs, and cartels;
- Preventing the diversion of marijuana from states where it is legal under state law in some form to other states;
- Preventing state-authorized marijuana activity from being used as a cover or pretext for the trafficking of other illegal drugs or other illegal activity;
- Preventing violence and the use of firearms in the cultivation and distribution of marijuana;
- Preventing drugged driving and the exacerbation of other adverse public health consequences associated with marijuana use;
- Preventing the growing of marijuana on public lands and the attendant public safety and environmental dangers posed by marijuana production on public lands; and
- Preventing marijuana possession or use on federal property.
The Justice Department’s Jan. 4 announcement had two immediate effects:
- Any safe harbor for the marijuana industry that may have existed as a result of recent federal guidance issued under the Obama Administration has come to an end; and
- Prosecutorial discretion on the part of individual U.S. attorneys in the area of marijuana enforcement has been reaffirmed.
- While a total of five guidance documents issued by the U.S. Department of Justice since 2009 were rescinded by Mr. Sessions’ announcement, the two most relevant appear to be the Cole Memo, and the Guidance regarding Marijuana Related Financial Crimes. Of these, the latter may be the most important, as it helped identify criteria under which financial institutions could at their discretion accept deposits from the cannabis industry. The rescission of this document may make access to the banking and financial services industry even more problematic for cannabis industry operators than it has been to date, if only because it increases uncertainty for banking institutions.
Cities that have authorized cannabis businesses of any kind to operate within their borders should be aware that the repeal of the Guidance Regarding Marijuana Related Financial Crimes could have significant implications for municipalities seeking to establish a banking relationship for purposes of depositing cannabis tax revenue.
State of California officials responded late last week in a manner that signals that the business of implementing legal marijuana sales in California will continue as planned.
“We’ll continue to move forward with the state’s regulatory processes covering both medicinal and adult-use cannabis consistent with the will of California’s voters, while defending our state’s laws to the fullest extent,” said Bureau of Cannabis Control Chief Executive Lori Ajax.
“In California, we decided it was best to regulate, not criminalize, cannabis,” California Attorney General Xavier Becerra said in a statement. “We intend to vigorously enforce our state’s laws and protect our state’s interests.”
While the state may be gearing up to defend California’s marijuana laws, federal law remains unchanged. Marijuana is a Schedule 1 substance prohibited under federal law. This means state officials have no ability to block federal enforcement action by any of the four U.S. attorneys in California. Last week’s memo did not include an explicit order to U.S. attorneys around the country to open an assault on marijuana businesses. Instead, the Attorney General said he would leave that decision up to each of the country’s 93 U.S. attorneys, which may lead to responses that vary across the country and even within the state. It is important to note that three of California’s four U.S. attorneys occupy their positions on an interim basis — a factor that may have a bearing on how they respond. It is also not yet clear to what degree California’s U.S. attorneys have the interest or resources to pursue enforcement action against legalized cannabis operations in the state.
In general, increasing uncertainty seems to be the overall effect of the U.S. Department of Justice’s announcement — for investors, the cannabis industry, the banking industry, and the states and respective political subdivisions that have legalized cannabis for either medical or recreational use. The memo issued last week did not make a distinction between medical and adult use, or recreational cannabis, raising the question of whether Congress will renew, as it has every year since 2013, the provision in federal law prohibiting the use of federal funds for enforcement action interfering with the implementation of states’ medical marijuana laws. That is the sole action Congress has taken to date that might expressly limit future enforcement action on the part of U.S. attorneys, but it remains to be seen whether Congress will renew what has come to be known as the Rohrbacher-Farr amendment in the wake of last week’s action, or whether Congress will go further.
Of particular note is the fact that Attorney General Sessions has voiced specific concerns about marijuana policies in California. The Los Angeles Times reported that in a remark after a news conference last month, for example, he said he was disturbed about California's role as a pot-exporting state, noting that much of the state's crop ends up on the black market.
Next Steps
The League in partnership with other organizations will be in engaged in dialogue with state authorities and the State Attorney General’s office on what steps cities may need to take in the near future.
Medical Marijuana Regulation and Safety Act:
News Releases
News Articles and Editorials
- San Marcos City Council unanimously approves medical marijuana ordinance (KNSD), November 11, 2015
- Court ruling highlights federal, state discord over medical marijuana (The Sacramento Bee), October 28, 2015
- California marijuana growers reel from cannabis farms consumed by wildfires (International Business Times), October 26, 2015
- Major victory for marijuana dispensary in federal court (San Francisco Chronicle), October 19, 2015
- California marijuana market readies for ‘robust’ new era (The Sacramento Bee), October 18, 2015
- Opinion: An overview of California’s new (and improved) medical marijuana laws (Above the Law), October 12, 2015
- Opinion: Bipartisan medical marijuana reform cause for optimism in capitol (Fox & Hounds), October 12, 2015
- 20 marijuana stores seek San Jose's blessing (San Jose Mercury News), October 7, 2015
- Marijuana delivery services in L.A. could live or die by new laws (LA Weekly), October 7, 2015
- Historic pot bills passed (Eureka Times-Standard), September 14, 2015
- Seven months after medical marijuana lottery, only 2 of 20 winners open pot shops in Santa Ana (The Orange County Register), September 8, 2015
- California cities create their own rules for medical marijuana (News21), August 25, 2015
- California medical marijuana regulations might reflect laws for booze (The Sacramento Bee), August 19, 2015
- Pot club shuttered for good but fight for medical pot not over in Livermore (Bay Area News Group), August 12, 2015
- Op-Ed: Medical marijuana needs California regulation on labor standards, San Jose Mercury News, Aug. 9, 2015
- Gavin Newsom’s panel: Marijuana shouldn’t be California’s next Gold Rush (The Sacramento Bee), July 20, 2015
- Raids bust dreams of tribal marijuana bonanza, Sacramento Bee, July 18, 2015
- California Regulatory Bills on Medical Cannabis, Americans for Safe Access, IndyBay.org, July 17, 2015
- Cannabis bills clear another round of legislative committees, Times-Standard, July 17, 2015
- Op-Ed: Time to regulate medical marijuana, BOE Member George Runner, Sacramento Bee, June 20, 2015
- Editorial: Rules for medical pot, finally?, Los Angeles Times, June 18, 2015
- Medical marijuana regulations advance in the state Legislature, Los Angeles Times, June 5, 2015
- Historic California medical cannabis regulations advance, SFGate blog, June 5, 2015
- Medical marijuana regulation measure clears California Assembly, Sacramento Bee, June 4, 2015
- California medical marijuana may finally get elusive guidelines, Sacramento Bee, May 31, 2015
- Rival bills to regulate medical pot advance in California Legislature, Los Angeles Times, April 28, 2015
- Cities, police take another hit at legitimizing medical marijuana, Sacramento Business Journal, April 20, 2015
- California cops, cities offer new medical marijuana bill, Sacramento Bee, Feb. 11, 2015
- New Push To Regulate Medical Marijuana In California, Capitol Public Radio, Feb. 12, 2015
Adult Use of Marijuana Act:
Disclaimer
The League does not prepare or post model ordinances, recognizing that individual cities may approach issues differently and one approach for a city may not be ideal for another. Accordingly, here are our disclaimers about the ordinances posted:
- The ordinances have been adopted by individual member cities and provided to the League for informational purposes. They are posted as a resource for the same informational purposes. They have not been reviewed by the League’s attorneys and do not constitute legal advice.
- The League does not endorse any ordinance as the only valid approach, recognizing that municipal codes vary and must be approached individually.
- City staff and elected officials should consult with their city attorney to prepare an ordinance that is appropriate for that city.
Sample Ordinances Regulating Marijuana
- Coalinga Ordinance: Prohibits dispensaries but allows all of the following commercial cannabis activities: Cultivation, Processing, Extraction, Manufacturing, Testing, Distribution, Transportation
- Emeryville Cannabis Ordinance
- Fremont Cannabis Ordinance
- Santee Cannabis Ordinance
- Shasta Lake Ordinance: Regulates cultivation, manufacturing, testing, distribution, transportation and retail sales of cannabis
- City of Santa Rosa: Regulates cultivation and establishes cultivation limits for personal medical and adult use; regulates commercial medical cannabis businesses, including dispensaries, non-volatile manufacturing, testing, distribution and transportation; sets standards for security, odor, lighting and noise; addresses over concentration of dispensaries with buffers to schools and other dispensaries.
- City of Portola: Regulates personal cultivation and deliveries; prohibits commercial cultivation, manufacturing and distribution.
- City of Oakland: Allows and regulates retail sale, cultivation, testing, distribution and manufacturing of adult-use cannabis; allows on-site consumption with appropriate permitting; includes an Equity Permitting program for those residents convicted of a cannabis offense after November 5, 1996.
- City of Berkeley: Imposes 1.8 percent gross receipts tax on medicinal cannabis.
Sample Ordinances Prohibiting Regulated Activities
Ordinances Prohibiting Cultivation, Processing, Delivery, Dispensaries or Some Combination Thereof:
- City of Ceres: Prohibits cultivation and deliveries.
- City of Eastvale: Prohibits commercial cannabis activities, deliveries, and cultivation.
- City of Jackson: Prohibits cultivation, delivery and dispensaries.
- City of Lathrop: Prohibits cultivation, processing and storage.
- City of Live Oak: Prohibits cultivation and dispensaries.
- City of Lodi: Prohibits delivery and processing.
- City of Los Banos: Prohibits dispensaries, delivery, cultivation, and processing.
- City of Manteca: Prohibits cultivation, deliveries, transportation and storage.
- City of Merced: Prohibits commercial cannabis activities, deliveries, and cultivation.
- City of Newman: Prohibits business licenses for dispensaries, commercial cannabis activity, distribution, cultivation, delivery, testing, or processing; prohibits commercial cannabis activity, delivery, activity for which a state license is required under the MMRSA, cultivation; will apply to recreational marijuana if legalized in the future.
- City of Newport Beach: Prohibits cultivation, processing, delivery and dispensaries.
- City of Petaluma: Prohibits dispensaries, cultivation, deliveries, and commercial cannabis activity generally.
- City of Riverbank: Prohibits dispensaries and outdoor cultivation.
- City of San Marcos : Prohibits cultivation, processing, delivery and dispensaries.
- City of Waterford: Prohibits commercial cannabis activities, deliveries, and cultivation.
- City of Oceanside: Prohibits commerial culitivation and deleivery
Medical Marijuana Regulation and Safety Act:
Disclaimer
The League does not prepare or post model ordinances, recognizing that individual cities may approach issues differently and one approach for a city may not be ideal for another. Accordingly, here are our disclaimers about the ordinances posted:
- The ordinances have been adopted by individual member cities and provided to the League for informational purposes. They are posted as a resource for the same informational purposes. They have not been reviewed by the League’s attorneys and do not constitute legal advice.
- The League does not endorse any ordinance as the only valid approach, recognizing that municipal codes vary and must be approached individually.
- City staff and elected officials should consult with their city attorney to prepare an ordinance that is appropriate for that city.
Sample Ordinances Regulating Medical Marijuana
- City of San Francisco
- City of San Diego
- City of Richmond
- City of Berkeley
- City of San Jose
- City of Sacramento
- City of Oakland: 2016 Ordinances
- City of Oakland: Original ordinances
- City of San Leandro
- City of Emeryville
- City of Gustine
- City of Oceanside
Ordinances Prohibiting Cultivation but Allowing Limited Indoor Cultivation for Qualified Patient Use
- City of Capitola
- City of Etna
Ordinance, Temporary Ban on Medical Marijuana Cultivation and Delivery
Ordinances Prohibiting Cultivation, Processing, Delivery, Dispensaries or Some Combination Thereof:
- City of Ceres: Prohibits cultivation and deliveries.
- City of Eastvale: Prohibits commercial cannabis activities, deliveries, and cultivation.
- City of Jackson: Prohibits cultivation, delivery and dispensaries.
- City of Lathrop: Prohibits cultivation, processing and storage.
- City of Live Oak: Prohibits cultivation and dispensaries.
- City of Lodi: Prohibits delivery and processing.
- City of Los Banos: Prohibits dispensaries, delivery, cultivation, and processing.
- City of Manteca: Prohibits cultivation, deliveries, transportation and storage.
- City of Merced: Prohibits commercial cannabis activities, deliveries, and cultivation.
- City of Newman: Prohibits business licenses for dispensaries, commercial cannabis activity, distribution, cultivation, delivery, testing, or processing; prohibits commercial cannabis activity, delivery, activity for which a state license is required under the MMRSA, cultivation; will apply to recreational marijuana if legalized in the future.
- City of Newport Beach: Prohibits cultivation, processing, delivery and dispensaries.
- City of Petaluma: Prohibits dispensaries, cultivation, deliveries, and commercial cannabis activity generally.
- City of Riverbank: Prohibits dispensaries and outdoor cultivation.
- City of San Marcos : Prohibits cultivation, processing, delivery and dispensaries.
- City of Waterford: Prohibits commercial cannabis activities, deliveries, and cultivation.