With California likely to legalize in 2016 vote, why are so many CA cities banning cannabis businesses?

California is many things, large, populous, complex, and on the whole marijuana friendly. It is also surprisingly feudal, meaning California's 58 counties and 482 cities have a surprisingly large amount of influence over what happens in the state. The recently enacted “MMRSA” (Medical Marijuana Regulation and Safety Act) is a prime example of this.

The 70-page MMRSA created a framework for a new Bureau of Medical Marijuana Regulation under the Department of Consumer Affairs. When it is formed later this year, the bureau will enact various state laws for governing how cannabis is grown, distributed, tested and sold in the state. MMRSA's passage was the result of a great deal of compromise between competing factions and the end result was that it included provisions insuring that local (city / county) ordinances and zoning laws would supersede state laws. However, in the fine print, MMRSA (unfortunately) included a provision that set a March 1, 2016, deadline for municipalities and counties to adopt their own rules governing medical cannabis businesses else new (and as yet undefined) state laws would take hold. Specifically:

...if a city, county, or city and county does not have land use regulations or ordinances regulating or prohibiting the cultivation of marijuana, either expressly or otherwise under principles of permissive zoning, or chooses not to administer a conditional permit program pursuant to MMRSA, then commencing March 1, 2016, the division (sic) shall be the sole licensing authority for medical marijuana cultivation applicants in that city, county, or city and county.

The result of this artificial (and looming) deadline has been horrific for the marijuana industry. Panicked that they would lose their authority to regulate medical marijuana cultivation in their jurisdictions, and without the necessary time to work through regulations of their own, cities and counties have been simply banning cannabis companies in the areas of control. To date an estimated 160 such bans have been either introduced or already approved – creating fears that marijuana companies could be stunted in the state. The significant number of bans has even prompted the California chapter of NORML to coin a new term, "Banapalooza," to describe the panic.

Since the deadline served no particular purpose, the solution was obvious -- kill the deadline and this is exactly what California lawmakers are doing (it now awaits the governor's approval). This adjustment will give cities whatever time they need to draft and adopt their own marijuana regulations which should lead to a far better outcome than the knee-jerk bans being suggested by the League of California Cities and the pot-unfriendly California Association of Police Chiefs. Some of these bans have applied to activities that have been legal since 1996 turning a set of bills that were supposed to facilitate the process of legalizing medical marijuana into a de facto recriminalization of it. Certainly not the intended effect of the bills' authors hence the quick attempt to fix it.

The business opportunity in California for medical marijuana firms and investors remains enormous, but to be successfully realized, such firms and investors will need to insure that they set aside the appropriate time and effort to navigate the extraordinarily complex regulatory environment that is part of the state's very make-up. 

By: Wesley