Santa Cruz Sues State to Protect Local Pot Shops, City Oversight

Santa Cruz is a community that is known for its laid-back lifestyle – the redwoods, the shoreline and red wine vineyards. Just don’t mess with their pot shops. Los Angeles marijuana attorneys have learned the city is suing the state in an effort to fend of out-of-towners from nearby San Francisco and Oakland from cannabis from swiping customers from their home-grown cannabis companies.

The city’s chair of the board of supervisors argues that local businesses are being undercut by these services because the playing field isn’t level, and further the city has no say in regulating the interlopers.

Santa Cruz Says State Backing Out on Its End of the Bargain

Recently, the state altered its regulations to permit state-licensed marijuana delivery companies to sell their product wherever consumers are. Santa Cruz isn’t the only city taking issue with this – 25 in all are suing the state, asserting this new stance is a work-around the provision of Proposition 64 (which legalized marijuana for recreational sales and use) that assured local governments would have authority to put a stop to brick-and-mortar sales.

On the other hand, part of the big-picture goal with Proposition 64 was to make the drug legal and widely available, which in turn would not only generate state tax revenue, but also cut the legs off black market operators. That hasn’t exactly happened, however, because so many local governments have banned sales, cannabis customers have few options BUT to turn to the black market, where supply is ample (the state produces 9 million pounds of the plant, but currently only has a legal market demand of 2 million pounds). Allowing statewide delivery is one means of combating this problem AND allowing greater access to a legal product for adults in those “dry” communities that want it.

Currently, this is the only state (of the 10 that have passed laws allowing recreational cannabis sales) that allow home delivery in every jurisdiction, regardless of the stance by local authorities. Santa Cruz is a bit different than some of the other plaintiffs suing California over its marijuana delivery rule in that it DOES allow local sales of recreational pot at brick-and-mortar shops.

Community leaders say they embraced Prop. 64 in large part due to the local controls it afforded. The city was one of those embracing regulation early on, running a tight ship and becoming one of the first to strictly regulate every aspect of legal marijuana sales from 24-7 surveillance cameras to heavy taxation to precise requirements for building permits.

Even as other communities in the Bay area dragged their heels for months adopting marijuana local cannabis regulations (which pot shops had to obtain just to open their doors), Santa Cruz was all-in. Officials identified businesses ready to play by the rules and even hosted a “Weed Day” on 4/20 where locals gathered for a ribbon cutting of a brand new dispensary.

Now, as the San Jose Mercury News put it, the onslaught of bud deliveries (there are 311 currently licensed by the state) are “harshing its mellow,” with cannabis home deliveries as easy as ordering takeout. Customers are responding. When given the option to drive to a dispensary and wait in line or have it brought directly to the for a fee, twice as many will choose the latter. Meanwhile, city governments like Santa Cruz reap no amount of the reward from that deal – even though one delivery service even named its business after the city’s area code.

Cities Suing State Adopt “Just Say No” Slogan

The cities that are banding together on this have (rather unfortunately, in the view of our Los Angeles marijuana lawyers) adopted the old Reagan-era slogan: Just Say No. The phrase is problematic in conjuring up the widespread damage of the failed “War on Drugs,” which lead to long-term prison sentences for non-violent drug offenders, crowding prisons, breaking up families and damaging whole communities. (California is one state in particular that has tried to right this wrong to the greatest extent possible, expunging criminal records dating back decades. The process is supposed to be completed by next year, removing impediments convicts faced to assistance with housing, education loans and employment. Los Angeles alone has an estimated 50,000 cannabis convictions to purge.)

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

Weed war: Santa Cruz sues California to defend its local pot shops, April 9, 2019, By Lisa M. Krieger, San Jose Mercury News

More Blog Entries:

Interstate Cannabis Commerce? Oregon’s Readying For It, April 9, 2019, Los Angles Marijuana Lawyer Blog