California State vs Municipal Battle Heats Up As the 42% of Cities That Said No to Cannabis May Be Forced to Open Stores

The United States is witnessing the rise in state power. The states are uniting to fight the federal government, lead social causes such as global warming, and they are driving innovation. We are also witnessing the rise in municipal power as cities fight to retain control over regulating the place, time and manner of businesses within their jurisdiction. Recently, twenty-five (25) cities banded together to sue the state over its implementation of cannabis regulations that allowed marijuana delivery in every city, regardless of whether the city prohibited this activity. The cities believe that cannabis delivery is a public nuisance that will increase crime.

The California Legislature ratcheted up this debate by scheduling a public hearing on a bill tomorrow that preempts a local municipalities control to prohibit cannabis establishments. The bill would require a city to permit adult-use cannabis storefronts if 50% of the voters in the municipality voted for Proposition 64. The bill requires the city to permit one (1) retail cannabis licenses for every four (4) liquor licenses.

The cities are fighting back. Cities such as Carpinteria are submitting letters to the California Legislature objecting to the preemption of local control over these businesses and the arbitrary 1 for 4 license requirements. This is significant given that our database for California indicates that over 42% of cities prohibit cannabis altogether. Although we are seeing a slight trend of cities revisiting this decision as a part of budget considerations.

As states fill the federal void, we are seeing an increased battle between the state and local municipalities in other states such as Oregon and Florida. California’s cannabis delivery lawsuit will provide us some insight on the future of a state’s ability to drive the growth of an industry at the local level.


According to the Detroit News, a Michigan Court of Claims judge has issued an injunction to stop the shut down of 98 medical marijuana facilities that were ordered to close yesterday in an advisory bulletin. Michigan issued an advisory bulletin ordering temporary medical marijuana facilities to cease operations by Saturday if the facility did not have a municipal authorization for temporary operations, the facility applied after February 18, 2018, or the facility filed an initial application prior to February 15, 2018, but that did not submit the facility license application for operational approval before June 1, 2018. Michigan’s Department of Licensing and Regulatory Affairs (LARA) indicated that the failure to cease operations would impede the applicant’s ability to obtain a medical marijuana license, and the matter would be referred to law enforcement.

Montro LLC filed the suit to stop the state from moving forward claiming that municipal delays prevented the entity from filing the application by the deadlines cited by LARA. The lack of deadlines for municipalities to decide whether to opt out of the medical marijuana regulation and to establish a local ordinance has created uncertainty and obstacles to the timely filing of applications to establish a medical marijuana facility. State marijuana statutes and implementing regulations should require action within a given timeframe to ensure a fair and equitable process, especially when the state limits the number of available licenses.


The Massachusetts Cannabis Control Commission published Guidance on Equitable Cannabis Policies   for Municipalities, which contains recommendations on how municipalities can create an equitable marijuana industry.  The guidance is intended to help municipalities develop cannabis policies that are aligned with the Social Equity program, and promote an equitable and meaningful participation of persons dispproportionately affected by the enforcement of previous cannabis laws.  State law also provides the Commission with the authority to take remedial measures against a municipality if there is evidence of discrimination or barriers to entry in the regulated cannabis industry.

Massachusetts' recommendations for creating an equitable cannabis industry include:

  • Allow various types of businesses:  Communities should consider allowing different types of license types that meet the strategic goals for the community.  For example, micro businesses and craft cooperatives promote small businesses.

  • Consider whether caps are necessary:  Offering limited cannabis business licenses in commercial parts of town prevents opportunities for small businesses.  

  • Zoning:  Communities should consider carefully whether to expand the 500 feet buffer around schools.

  • Host community agreements:  Clearly identify the licenses, permits and the process for operating a marijuana business.

  • Selection process:  Institute an objective, transparent selection process that prioritizes review for state-designated economic empowerment applicants. Municipalities should consider instituting preferences for state- designated Social Equity Program participants, or applications from companies owned by marginalized groups. A municipality should evaluate all applicant's diversity plan and understand how the impact will have a positive impact on communities that have been disproportionately harmed by the enforcement of previous cannabis laws.