The new Cannabis regulations in California permits businesses to deliver cannabis in jurisdictions whose cannabis commercial activity has been banned if such jurisdictions have filed a lawsuit for regaining local control.
When Prop.64 was passed by California voters to legalize adult cannabis use, they came up with a vertically integrated supply chain to allow retailers, distributors, testing labs, manufacturers and cultivators to operate. Retailers were allowed to implement delivery services. This also authorized all state jurisdictions to control commercial cannabis activity in their borders through adopting regulations, or even entirely banning cannabis activity. Today, jurisdictions that have banned cannabis have sued the state to be allowed to ban the delivery of cannabis too from operators in jurisdictions where marijuana is not banned.
Since January 1, 2018, when the legal adult-use cannabis was launched, the BCC together with Department of Public Health and as well as the Department of Food and Agriculture have come up with laws regulating the cannabis industry, which formally got adopted in January 2019. These rules are meant to permit cannabis businesses to deliver to countries and cities whose commercial cannabis activity is banned if they are compliant with state and home jurisdiction regulations. This allows them to carry cannabis products through any state jurisdiction.
The 25 countries and cities included in the lawsuit are reliant on the local control provision of Prop. 64. However, the statute prohibits municipalities from banning cannabis transportation through their jurisdictions. This is because banning delivery services could leave most customers, more those in need of medical cannabis with limited mobility plus limited access to the market.
A senior counsel of a Cannabis Law Practice Group (Greenspoon Marder), Robert Finkle states that the lawsuit that was sighed on the 14th of April is still on its initial stages. Plaintiffs have over just one month for serving the complaint and the BCC, which is the responding party, will have a period of 30 days to issue a response. Currently, delivery services will remain legal, and distributors will not lose their licenses. However, resulting from the lawsuit, the court may issue a restraining order or an injunction on the delivery rule implementation, and this could cause market disruptions.
Should countries and cities that have made the lawsuit win, there will be a huge impact on the cannabis industry. Delivery companies will have to map out of the entire state, and this may disenfranchise cannabis consumers who voted in favor of it.
Meanwhile, dealers are advised to ensure that the countries and cities they deliver to have explicitly permitted cannabis deliveries.