Q: Are there any laws or regulations that directly state whether or not a dispensary can act as a lounge and allow patrons to smoke within their facilities if properly ventilated?
A: The question of where, when and how cannabis can be consumed is a tricky one. Not only because the current legislation contains ambiguities, but also because there are several different codes and ordinances that govern the issue.
A new California bill, Senate Bill 94, is expected to be signed into law soon, and if passed, will provide more clarity on the issue. Senate Bill 94 proposes to merge the Medical Marijuana Regulation and Safety Act with the Adult Use of Marijuana Act (AUMA). This legislation will have the “easy to remember” acronym MAUCRSA. By encompassing the regulations for both medical and recreational cannabis under one comprehensive piece of legislation, MAUCRSA should make it easier to understand cannabis law in California.
Under MAUCRSA, both medical cannabis dispensaries and adult-use cannabis retailers will be regulated through the Bureau of Cannabis Control. The state will begin accepting applications this January. On premise cannabis consumption will be permitted in licensed establishments provided that a few prerequisites are met. The relevant part of the bill reads:
“A local jurisdiction may allow for the smoking, vaporizing, and ingesting of cannabis or cannabis products on the premises of a retailer if it meets all of the following requirements:
(1) Access to the area where cannabis consumption must be restricted to persons 21 years of age and older.
(2) Cannabis consumption is not visible from any public place or nonage restricted area.
(3) Sale or consumption of alcohol or tobacco is not allowed on the premises.”
It should also be noted that a commercial cannabis licensee is not permitted to possess an alcohol license under state law and may not be a retailer of tobacco.
Under California state law, municipalities retain the authority to regulate commercial cannabis within their boundaries. Almost all Californian cities have ordinances that either prohibit cannabis consumption lounges expressly or preclude their creation through the application of local nuisance laws.
The one notable exception that I am aware of is the city of San Francisco. For a few years now, San Francisco has permitted dispensaries to offer private lounge areas for the on-premise consumption of cannabis. Recently, the city went a step further and amended the conditional use permit for Barbary Coast Collective dispensary to expressly allow for on-site cannabis consumption. Barbary Coast is the first and only explicitly permitted consumption lounge that I am aware of in California.
As cities gear up for adult-use cannabis under AUMA, I believe we will see more municipalities taking up this issue. For example, the city of San Diego is in the process of drafting an adult-use ordinance to be completed by September.
However, not every city may be as generous with its local regulations. The city of Los Angeles just released a draft proposal for “Commercial Cannabis Activity Requirements” which expressly forbids on-premise cannabis consumption. This ordinance is only a draft as of today, but if passed, it would effectively preclude the creation of recreational ‘cannabis lounges’ in Los Angeles.
Each city will have to individually decide how it plans to handle on-premise cannabis consumption, but I am confident that the idea will eventually gain acceptance over time.
One caveat that cannabis lounge entrepreneurs ought to bear in mind is that current state laws regarding other kinds of smoke exposure in the workplace (such as tobacco) will still apply to them. For example, cannabis smoking establishments will still need to comply with the notice requirements of Proposition 65, the Safe Drinking Water and Toxic Enforcement Act. Prop 65 mandates that business owners provide adequate notice to their patrons when they are likely to come into contact with carcinogens through business activities. As marijuana smoke is known by the State of California to contain carcinogens such as carbon-monoxide, proper notices must be posted in accordance with Prop 65. Furthermore, many state labor laws will also effect cannabis lounge operation, such as the rules that limit employee exposure to second-hand smoke.
Although it is probably already abundantly clear to readers, it bears repeating that cannabis remains a Schedule I (illegal) substance under federal law. This means that the federal government still has the legal authority to pursue and prosecute marijuana crimes under the Controlled Substances Act, regardless of what state law says.
In a published memo from 2013 (the “Cole” memo), the Department of Justice indicated a non-enforcement position with regard to companies that comply with state cannabis laws, and don’t otherwise run afoul of federal drug enforcement priorities. It is uncertain how the federal government will regard cannabis consumption lounges even if fully regulated by state and local agencies. It is possible that the Feds will view this activity as contributing to drugged driving, which is one of the priorities outlined in the memo.
Denver recently passed an ordinance allowing for cannabis consumption lounges within the city. How the federal government treats these businesses in Colorado should be a good indicator of what we can expect to see here in California.*
*The views expressed in this article are speculative opinion only and not to be interpreted as legal advice. Cannabis legislation changes frequently, and a licensed attorney should always be contacted directly when questions arise with respect to the current state of the law in your area.
Lance Rogers is a partner in the Cannabis Law practice group at Greenspoon Marder in San Diego. He has handled a wide array of matters related to cannabis, including criminal defense, civil rights, asset forfeiture, land use and more. He currently represents many of the nation’s leading cannabis retailers, manufacturers and agriculture ventures. In 2011, Rogers attained the first dispensary license in Southern California through San Diego County. He previously served as general counsel for the California Cannabis Industry Association, a state industry group he helped to form.
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