Q: I understand cities cannot stop delivery drivers from being on public roads within their jurisdiction, but under this new law, can they still prevent actual deliveries?
A: Mobile marijuana delivery services are often a very appealing choice for cannabis entrepreneurs in California.
Delivery services are often easier for entrepreneurs to start and require less overhead to operate. In contrast to storefront dispensaries, which can attract a lot of opposition from the community, delivery services tend to be less conspicuous than their brick-and-mortar counterparts. They also provide a great convenience to medical cannabis recipients, especially in cases where the patient may be too sick to leave the house. If the recent proliferation of mobile cannabis business is any indication of the market’s demand, it may very well be that delivery services are the public’s preferred method of procuring cannabis.
Unfortunately, cannabis delivery is far from a “silver-bullet” answer to the frustrating ambiguities encountered with marijuana regulatory compliance.
Many California cities have ordinances that ban the sale of marijuana locally, even though cannabis remains officially decriminalized at the state level. This generates some interesting legal questions for cannabis entrepreneurs, particularly with regard to delivery services. So even if cities cannot stop delivery drivers from using public roads within their jurisdiction, can they still prevent actual deliveries? The best way to answer this question is to start by briefly examining the history of legal cannabis in California.
Medical marijuana was first introduced to California through Proposition 215, better known as the Compassionate Use Act of 1996. The Compassionate Use Act provided exemptions for medical marijuana use and shielded both patients and caregivers from arrest and prosecution by state law enforcement agencies. The act contained many unfortunate ambiguities, however. Arrests of patients and caregivers alike continued with a high frequency until the Medical Marijuana Program Act (California Senate Bill 420) was signed into law in 2003. Still ambiguities remained, with arrests and prosecutions continuing to occur.
Finally, the Medical Cannabis Regulation and Safety Act was enacted in 2015 in order to address this problem. MCRSA is actually comprised of three separate bills (AB 226, AB 243 and SB 643) and established a clear and concise licensing system for the cultivation, sale, transport and distribution of medical cannabis.
Approximately one year later, the Adult Use of Marijuana Act or Proposition 64 was passed. Prop. 64 allows adults aged 21 and older to consume cannabis recreationally in California, and contains similar rules and regulations to those found in MCRSA. The end result was the creation of two separate bodies of law for medicinal and recreational cannabis. There were significant differences between the two bills and many inconsistencies existed between medical and recreational cannabis with respect to licensing, limits on amount and distribution.
As of June 15, Senate Bill 94, also called the Medicinal and Adult-Use Cannabis Regulation and Safety Act, was passed in order to consolidate both medical and adult use cannabis law under one comprehensive document. SB 94 effectively repeals and replaces MCRSA. Therefore, it’s crucial to understand what SB 94 says about cannabis delivery if we want to understand what will and will not be permissible under the new law.
SB 94 expressly mentions cannabis delivery service and does permit it, but with one significant restriction: All deliveries must originate from a licensed retailer with a fixed location. (See SB 94, sections 59 and 63). Therefore, deliveries are generally permissible, but only licensed “brick-and- mortar” retailers may make these deliveries. This effectively requires any aspiring cannabis delivery entrepreneur to have a licensed storefront before he or she can begin to make deliveries.
But let’s assume that there is a licensed dispensary that would like to start making deliveries. How much can individual cities restrict their ability to do so? SB 94 explicitly states that it does not prohibit the ability of individual cities to ban marijuana sales within their jurisdiction. In fact, many municipalities have already drafted local ordinances banning cannabis sales within city limits.
Fortunately, SB 94 also explicitly states that cities are not to interfere with the transportation of cannabis on their local roads. Marijuana can still be legally transported through a city, even if that city prohibits the sale of cannabis.
The final question, then, is whether a delivery can be made to an address located inside a city that has decided to ban the sale of marijuana. If a city cannot stop the transportation of cannabis through its borders, can it prohibit the delivery and receipt of cannabis therein?
Unfortunately, the answer seems to be yes.
The listed definitions in section 5 of SB 94 include “sale” to encompass “any transaction whereby, for any consideration, title to cannabis or cannabis products is transferred from one person to another, and includes the delivery of cannabis or cannabis products pursuant to an order placed for the purchase of the same and soliciting or receiving an order for the same.” (See section 5.) What this means is that the sale is effectively deemed to have taken place at the time and location that the product changes hands, regardless of when it was paid for, or where the cannabis originated from.
Ultimately, it’s probably not a good idea to deliver cannabis to a city that has decided to ban its sale.
Some cities, such as Riverside, have passed laws which expressly prohibit delivery. But even if an ambiguity does exist, it is unwise to distribute in a city which has decided that cannabis is unwelcome. Rather, I would suggest instead taking that entrepreneurial spirit to a location that will appreciate your hard work and innovation in the cannabis industry.*
*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.
To subscribe to The Cannifornian’s email newsletter, click here.