California Municipalities Go to Trial Against the State in Cannabis Delivery Lawsuit

A long-running dispute between a slate of California cities and the state itself landed in trial Aug. 6, with a Superior Court judge seeming to underscore that state law will prevail over local rule. At issue: whether cannabis delivery services may operate in jurisdictions that have otherwise banned commercial cannabis activity. The future of delivery in the world’s largest cannabis market is at stake here.

The collective of 24 California cities (as well as Santa Cruz County) argues that a moratorium on cannabis businesses should extend to delivery services that might pass through their borders.

The state insists that delivery is allowed under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) and cannot be halted by local whims.

Fresno Superior Court Judge Rosemary McGuire wrote that the local governments would need some sort of ordinance on the books to override state law. As of now, “there is no dispute,” at least as far as legislative language is concerned. In fact, the state’s attorneys specifically point to the MAUCRSA language as an immediate non-starter for this type of litigation.

“A local jurisdiction shall not prevent delivery of cannabis or cannabis products on public roads by a licensee acting in compliance with [state law] and local law,” according to Section 26090(e) of the state code.

Read the original civil complaint here. 

MAUCRSA outlines what is required of a licensed delivery company, citing particular regulations and protocols to which drivers must adhere. Delivery companies may be based in one county, of course, like a brick-and-mortar retailer, but those businesses are allowed to service customers in any California jurisdiction. According to Cannabiz Media, the state currently has 308 active delivery licenses on the books. More than 60% of California municipalities have maintained some sort of moratorium on commercial cannabis businesses. 

The cities involved in this lawsuit include: Agoura Hills, Angels Camp, Arcadia, Atwater, Beverly Hills, Ceres, Clovis, Covina, Dixon and Downey. Also participating are McFarland, Newman, Oakdale, Palmdale, Patterson, Riverbank, Riverside San Pablo, Sonora, Tehachapi, Temecula, Tracy, Turlock and Vacaville, as well as Santa Cruz County.

The next hearing in this case is scheduled for November.

Indeed, despite the judge’s reference to existing state law, the proceedings aren’t over yet. The League of California Cities and local police chiefs have thrown their weight behind the lawsuit, hoping to further cement a sense of local control in the always-evolving cannabis industry.

“I am in complete agreement with this lawsuit. Each community should be able to decide on their own how they chose to deal with the legalization of marijuana,” wrote former Clovis Police Chief Matt Basgall.