Working out of Harris Bricken's Los Angeles office, Julie is a fearless advocate for businesses and organizations striving to master government processes, avoid litigation, and foster an environment that allows them to grow freely. Her experience working for federal and local governments and agencies has provided Julie with a unique perspective and an ability to foster cooperative relationships with public agencies on behalf of her clients.
AB 2164 cannabis fines marijuana
AB 2164 may create surprises for cannabis landlords.

Prior to the enactment of AB 2164, California law required cities and counties to grant a person responsible for a continuing municipal code violation a reasonable time to remedy the violation before the city or county could impose fines or penalties when that violation pertained to building, plumbing, electrical, or other similar structural and zoning issues that did not create an immediate danger to health or safety. Cal. Gov. Code section 53069.4.

In June, California’s Fifth District Court of Appeal interpreted Government Code section 53069.4 to require the County of Fresno to provide a cannabis cultivator a reasonable time to abate cultivation activity before imposing a fine. See Thao v. County of Fresno, Court of Appeal of the State of California, Fifth Appellate District, Case Nos. F072276, F073035, Filed June 28, 2018 (unpublished).

Apparently, the state legislature didn’t like that, because earlier this month, Governor Brown signed AB 2164 into law, which amends Government Code section 53069.4 and allows local governments to eliminate the “reasonable time period” to correct a code violation in cases of cannabis cultivation. According to the bill’s author, this removes at least one monetary incentive for illicit grows to continually move while giving local governments the ability to bring meaningful penalties on willfully illegal growers.

While it may sound reasonable, in practice this new law will have drastic impacts on unwitting landlords who may or may not know that cannabis cultivation is occurring at their property. Even the most sophisticated property owners are befuddled by California’s new regulatory scheme, unsure of whether cannabis activity is authorized as a matter of right in all jurisdictions (it is not), or whether they are even allowed to prohibit cannabis use or activity in their leases (they can).

We have been assisting a number of property owners facing excessive fines and penalties imposed by cities due to unlawful cannabis activity by their tenants (see here for more on that). Some cities impose strict liability against property owners for their tenants’ code violations, rack up fines of $10,000 per day, and then record the fines as an assessment on the property owner’s tax bill. This can result in a tax bill for hundreds of thousands to millions of dollars, non-payment of which results in sale of the property by the county.

Providing a reasonable period of time to correct a violation like cannabis cultivation ensured that property owners, who generally cannot proactively inspect property that is leased to a tenant (and therefore may be unaware of illegal activity) could take action to eliminate unlawful activity before it became an insurmountable financial burden. Now, property owners face serious and immediate risks and must take steps to ensure they are not held liable for unlawful cultivation activity by their tenants.

Fortunately, AB 2164 includes a “safe harbor” that requires cities and counties to provide a reasonable period of time to correct a violation prior to the imposition of administrative fines or penalties if all of the following are true:

  1. A tenant is in possession of the property that is the subject of the administrative action;
  2. The rental property owner or agent can provide evidence that the rental or lease agreement prohibits the cultivation of cannabis; and
  3. The rental property owner or agent did not know the tenant was illegally cultivating cannabis and no complaint, property inspection, or other information caused the rental property owner or agent to have actual notice of the illegal cannabis cultivation.

So, if you are a commercial landlord and want to protect yourself from municipal fines and penalties without warning, make sure that either (1) your tenant is lawfully cultivating pursuant to all local and state laws, or (2) you are complying with items 1-3 above. Otherwise, the consequences of city or county action can be painful.

california cannabis marijuana development
Development agreements are a unique process.

This is the second post in our three-part series on California development agreements. In our first post we provided an overview of the use (and misuse) of development agreements in the cannabis industry. This post breaks down the basics of development agreement laws.

California’s development agreement statutes are located in Government Code sections 65864 – 65869.5. According to the legislative findings and declarations, the lack of certainty in the approval of development projects can result in a waste of resources, escalate the cost of housing and other development to the consumer, and discourage investment in and commitment to comprehensive planning which would make maximum efficient utilization of resources at the least economic cost to the public. Cal. Gov’t Code § 65864(a).

Providing assurance to development project applications that, upon approval of a project, the applicant may proceed in accordance with existing policies, rules and regulations, and subject to conditions of approval, strengthens the public planning process, encourages private participation in comprehensive planning, and reduces the economic costs of development. Cal. Gov’t Code § 65864(b). In other words, the California State Legislature has determined that providing certainty and predictability in the development process is good for everyone.

Government Code section 65865(a) provides that anyone with a legal or equitable interest in real property may enter into a development agreement with a city or county for the development of the property.

“Development” is not defined in the development agreement statutes, but “development project” is defined in a subsequent chapter as any project undertaken for the purpose of development, including a project involving the issuance of a permit for construction or reconstruction, but not a permit to operate. Cal. Gov’t Code § 66000. Accordingly, a cannabis business that obtains permits for tenant improvements would fall under this definition, but a development agreement would likely not be appropriate where a cannabis business enters a turn-key facility that requires no construction. In practice, this does not seem to be the case, and we’ve seen cities require development agreements where no construction is contemplated.

The development agreement process begins with the local agency’s procedures for development agreements. If none exist, a city or county must adopt procedures upon the request of an applicant, at the applicant’s expense. Cal. Gov’t Code § 65865(c).

The development agreement statutes provide minimum standards for local procedures and requirements, including periodic review of the agreements at least once every twelve months, specification of the duration of the agreement, the permitted uses of the property, the density or intensity of use, the maximum height and size of proposed buildings, and provisions for reservation or dedication of land for public purposes. Cal. Gov’t Code §§ 65865.1-65865.2

A development agreement is a legislative act that must be approved by ordinance and is subject to referendum. Cal. Gov. Code § 65867.5(a). A noticed public hearing by both the planning agency and by the city council are required before a development agreement is approved. See Cal. Gov’t Code § 65867. A development agreement cannot be approved unless the legislative body finds that the provisions of the agreement are consistent with the general plan and any applicable specific plan. Cal. Gov. Code, § 65867.5(b). Like all other ordinances, the ordinance approving the development agreement must go through a two-reading process, with at least a five-day intervening period. See Cal. Gov’t Code § 36934. A development agreement cannot legally take effect until after the 30-day period for a referendum expires. See Cal. Elect. Code § 9141; Referendum Committee v. City of Hermosa Beach, 184 Cal. App. 3d 152 (1986); Midway Orchards v. County of Butte, 220 Cal. App. 3d 765 (1990).

In practice, all of this means that the development agreement approval process takes a substantial amount of time. First, the developer and local government need to negotiate essential terms. Once the terms have been negotiated, the agreement is placed on the planning commission calendar for hearing, followed by two separate city council meetings. Only after the referendum period has expired can the agreement become effective. In a best case scenario, this process may take 90 days. It often takes much longer.

Development agreements in California are rarely challenged, and when challenged, development agreements are usually upheld because the statutes are liberally construed to encompass agreements that substantially comply with their specific terms and conditions and achieve their essential objectives. Santa Margarita Area Residents Together v. San Luis Obispo County (2000) 84 Cal.App.4th 221, 228.

However, given the popularity of use of development agreements in the California cannabis industry, we anticipate seeing an increase in legal challenges, especially where the agreements are mandatory, require substantial fees, have short terms, and lack any connection with construction.

Stay tuned for our next post in this series regarding key terms to fight for in development agreement negotiations related to California cannabis use.

california cannabis marijuana development agreement
California municipalities are missing the mark on development agreements.

Development agreements have become a popular tool for California municipalities regulating commercial cannabis activities. We’ve talked a bit about development agreements in the cannabis context here. In a nutshell, a development agreement is a contract between a municipality and developer that freezes applicable rules, regulations, and policies pertaining to a property at the time of execution. Our California cannabis real estate and land use lawyers have come across quite a few of them lately. Unfortunately, many times local jurisdictions are misusing them at the industry’s expense.

Development agreement laws were enacted to provide assurances to developers faced with uncertainty in government approval processes for complex and long-term development projects. A development agreement should provide developers with assurances that the developer will see a return on investment by providing vested rights to engage in a particular use on a property. The rights are locked in so that if local laws change in the future (e.g., the voters or legislative body prohibit a particular use), the uses permitted in the agreement can continue for the remaining term of the agreement.

The scant authority dealing with development agreements focuses on the broad purpose of the statute to provide assurances to developers as soon as project commitments must be made. Santa Margarita Area Residents Together v. San Luis Obispo County (2000) 84 Cal.App.4th 221, 230.

Development agreements allow municipalities to impose fees without having to deal with the uncertainty and expense of putting the matter before voters (as required with the imposition of a tax), and to negotiate community benefits and public improvements to be provided by developers. They also put municipalities in privity of contract with developers, providing an additional degree of control and remedies for each party that would not otherwise exist.

In the context of cannabis, we are seeing a perversion of the intent of California’s development agreement statutes. Many municipalities require development agreements for commercial cannabis activity regardless of whether there is actual land development involved. The terms are incredibly short (often only 1 to 5 years), the fees are substantial, and developers are not expressly provided with vested rights to operate. In other words, most of the cannabis-related development agreements fail to provide developers with assurances that they will see a return on their investment.

Further, the vast majority of municipalities do not allow any negotiation of commercial cannabis development agreements, which calls into question the validity of any associated fees. After all, the justification for exempting development agreements from the constitutional and statutory requirements applicable to municipal fees and taxes is that the terms are bargained for between the parties.

Stay tuned for the next two parts of this series on demystifying development agreements. In part two, I’ll break down the basics of development agreement laws, and what they mean for the marijuana industry. In part three, I’ll cover some key terms to fight for in development agreement negotiations related to California cannabis use.

california marin county marijuana cannabis

California has 58 counties and 482 incorporated cities across the state, each with the option to create its own rules or ban marijuana altogether. In this California Cannabis Countdown series, we cover who is banning cannabis, who is embracing cannabis (and how), and everyone in between. For each city and county, we’ll discuss its location, history with cannabis, current law, and proposed law to give you a clearer picture of where to locate your California cannabis business, how to keep it legal, and what you will and won’t be allowed to do.

Our last California Cannabis Countdown post was on the City of San Jose, and before that the City of Cotati, the City of San Luis Obispo, the City of Redding, the City of San Rafael, the City of Hayward, Alameda County, OaklandSan FranciscoSonoma County, the City of Davis, the City of Santa RosaCounty and City of San BernardinoMarin CountyNevada County, the City of Lynwood, the City of CoachellaLos Angeles County, the City of Los Angeles, the City of Desert Hot SpringsSonoma County, the City of Sacramento, the City of BerkeleyCalaveras CountyMonterey County the City of Emeryville and the City of Antioch.

In addition to the above, we have previously written about commercial cannabis regulations in Marin County here, here, and here. Today’s post is an update on those regulations, as requested by one of our faithful readers.

Welcome to the California Cannabis Countdown.

What commercial cannabis activity is allowed in Marin County?

In unincorporated Marin County, medicinal cannabis delivery-only retailers (MCDORe) are allowed pursuant to a licensing ordinance approved on November 14, 2017. These locations must be closed to the public– only delivery is allowed.

How many retailers are allowed?

A maximum of four MCDORe locations are authorized in the C1 (Retail Business), CP (Planned Commercial), AP (Admin and Professional), OP (Planned Office) and IP (Industrial Planned) zoned districts. MCDORe locations must be located at least 600 ft from schools, day care centers, youth centers and playgrounds.

What about delivery?

Delivery of medicinal cannabis into unincorporated Marin County by licensed retailers located outside of unincorporated Marin County is also allowed. All other commercial cannabis activities are prohibited in unincorporated Marin County.

Is Marin County accepting MCDORe license applications?

The deadline for applications was July 12, 2018 and Marin County is not accepting additional MCDORe applications at this time. According to County staff, there may be an opportunity for additional licenses in the future if the program expands. After implementation of MCDORe licensing, Marin County will be evaluating program expansion into other potential licensing regulations.

What about non-medical?

Currently, Marin County does not allow any adult-use commercial cannabis activities, including cultivation, manufacturing, testing, distribution or retail sales. This is unfortunate, because in 2016, 69.6 percent of Marin voters supported Proposition 64. For this to change, citizens and industry should make it known to the County Board of Supervisors that an additional licensing ordinance is needed.

Novato Cannabis LawThe City of Novato in northern Marin County, California, will be conducting a cannabis stakeholder meeting this Friday, July 20 at City Hall from 12:00 pm to 2:00 pm.

The meeting is designed to engage cannabis industry participants in determining what kinds of cannabis businesses might be viable in town and how many licenses should be issued for each type of cannabis activity.

The City’s consultants are seeking to identify key issues and concerns cannabis industry participants may have in implementing a cannabis program. If you’ve been looking for opportunities in the North Bay, this is your chance to engage with the City and its consultants in the early stages.

The City is also holding a separate community workshop on Saturday, July 21, to gather input from members of the Novato community.

Questions about the program and the stakeholder meeting should be directed to Bryan Lopez, Management Analyst (blopez@novato.org or 415-899-8923) or David McPherson (dmcpherson@hdlcompanies.com or 909-861-4335).

california cannabis lien assessmentCannabis regulation in California is heavily focused on local control. We write and speak about this constantly. (See here, herehere, and here). As predicted, new lawsuits are cropping up all over the state challenging the authority of local governments to take certain actions as they pertain to cannabis. Our firm has generally discouraged clients from taking a litigious approach toward government regulation of cannabis, because the often meritless lawsuits we saw in the pre-MAUCRSA era rarely resulted in victory for cannabis entities, were largely detrimental to property owners, and turned the majority of local legislative bodies in California against the cannabis industry.

However, there are constitutional and statutory limits to what governments can do, and it is a fundamental part of our duty as attorneys to ensure that the rights of voters, property owners and tax-paying citizens are protected. This post focuses on one troubling practice we are seeing in California involving cities recording excessive fines and penalties against property owners who lease (knowingly or unknowingly) to cannabis tenants.

Local Governments Are Charging Property Owners Excessive Fines And Penalties And Recording Them Against The Property As A Lien Or Special Assessment

Cities generally have two goals when it comes to code enforcement: (1) compliance and (2) cost recovery. State law provides the vehicle for local governments to achieve these goals via Government Code sections 53069.4, 38773.1 and 38773.5, which enable cities to declare activity in contravention of the municipal code a public nuisance, take action to abate that nuisance, and then recover the cost of abating the nuisance via a lien or special assessment against the property. However, this practice is frequently abused. A staggering number of cities misinterpret these laws to mean that they are entitled to impose fines (sometimes up to $10,000 or $20,000 per day!) for municipal code violations against both businesses and property owners. If these fines go unpaid, the cities record them as a lien or special assessment against the subject property. The result is a massive fee, sometimes upwards of $1 million, tacked on to an owner’s property tax bill. If that goes unpaid for three years, the local government can seize and sell the property.

This is a nightmare for property owners leasing to cannabis businesses. We have spoken to many owners in this scenario who were either unaware that cannabis activity violated the local code, or unaware that their tenants were cannabis businesses. Upon receiving a notice of violation, these owners instituted unlawful detainer proceedings, and diligently pursued eviction of cannabis tenants. Despite this, cities continued to assess fines against the property owners until the cannabis activity was completely eradicated from the property. In the end, despite immediately acting to remove their tenants, these property owners were hit with hundreds of thousands to millions of dollars in unpaid fines and penalties. Most owners in this scenario are unable to pay, and are forced to give up their properties.

This practice, in most cases, is unlawful under our analysis. The Government Code does not authorize cities to attach liens or impose special assessments to collect outstanding nuisance fines or penalties. We are actively fighting for our clients who have been wrongly assessed excessive fines and penalties and are in jeopardy of losing their properties, and we will provide updates as these cases progress. Stay tuned.

california marijuana cannabis

Welcome back to “California Cannabis: Scams and Schemes of the Week.” We are publishing this series to shed light on the unscrupulousness of certain attorneys, consultants, and operators in the California cannabis industry, with the goal of establishing a more ethical and regulated industry in the state. You can view Part 1 of this series here and Part 2 here.

Last week, I received many emails from readers regarding the scams and schemes they’ve experienced. It is frustrating, heartbreaking, and infuriating. I am hopeful that we will begin to see in California what we’ve seen in Oregon and Washington: Soon after robust regulations are implemented, many of the roaches and rodents scatter back to the dark corners from whence they came.

Scam # 1: Criminal Attorneys Advising Clients to Engage in Criminal Activity

I am not talking about criminal law attorneys. I mean attorneys who are criminals. Over the past two weeks, I’ve had some mind-blowing conversations with self-proclaimed “cannabis expert” attorneys. These attorneys are advising their clients to engage in blatantly criminal behavior, often resulting in irreparable disaster for all involved. MAUCRSA provides a regulatory regime under which all operators are licensed and regulated businesses; this is dramatically different from the previous regime where collectives and individuals were provided limited criminal immunities under the Compassionate Use Act. If your attorney’s recommended strategy involves breaking the law and preparing to assert defenses under the Compassionate Use Act, rather than leading you into a legitimate, licensed, regulated space, you need to find a new attorney.

Scam #2: Ship Your Cannabis Cash to a Caribbean Bank

Two new banking scams came to my attention this week. One involves a company claiming to run a Bahamian bank that is safe from government seizure. All you have to do is ship your cash to an address in the Bahamas! The company’s mass emails and website use all the right banking buzzwords and acronyms (FinCEN! KYC! AML! Due Diligence!), but if you read the fine print terms and conditions, the true nature of this scam reveals itself. Common sense should tell you that shipping bags of cash offshore is not a good idea.

Scam #3: Buy this Turnkey Dispensary (which is actually worthless and illegal)

We’ve already discussed the inability to purchase a nonprofit, and how most cannabis licenses are non-transferable. But we’ve seen another common scam by dispensary peddlers. Some folks are selling “turnkey” dispensaries that are operating in violation of local zoning codes and have received multiple citations, without disclosing as much to the buyer. In fact, these scammers often try to exclude zoning compliance from the representations and warranties in the deal. The unwitting buyer pays hundreds of thousands to millions of dollars for a worthless “dispensary,” and by the time the buyer discovers that the dispensary is unauthorized and the subject of a code enforcement action, the seller has absconded with the money. The buyer is left with a closed dispensary, fines, outstanding debts to vendors, and tax liabilities. Unsurprisingly, we are seeing the same bad attorneys working both sides of these deals, taking commissions, and completely bailing on the buyers once the truth is revealed. In every deal, DUE DILIGENCE IS KEY. Always verify zoning and outstanding code enforcement actions with the City before you close. Each party needs to retain their own, non-conflicted attorney.

We will be back with more next week. If you’ve come across a California cannabis industry scam, we would like to hear from you! Leave a comment below, or email us at firm@harrisbricken.com.

california cannabis marijuana

Welcome back to “California Cannabis: Scams and Schemes of the Week.” We are publishing this series to shed light on the unscrupulousness of certain attorneys, consultants, and operators in the California cannabis industry, with the goal of establishing a more ethical and regulated industry in the state. You can find last week’s post here.

Scam #1: Attorneys Representing Buyer and Seller and Taking Commission

We continue to see attorneys representing cannabis entities on both sides of mergers and acquisitions, and in addition to taking an hourly rate, they’re taking a commission on the deal (from both parties)! We are seeing the same attorneys appoint themselves as counsel for the purchased corporation. We’ve seen some shocking deals that harm both parties and benefit only the attorney. Most often, troubling information about a business or property is concealed for the benefit of the seller and the attorney, to the detriment of the buyer. We often see good, trusting people get taken for a ride by attorneys with unethical motivations. The incentive to close a deal as quickly as possible to get a commission is at odds with the incentive to conduct careful due diligence. Make sure your agents and attorneys have your best interests at heart, and if a lawyer tells you he or she can represent “both sides” in a transaction, run!

Scam # 2: The $10 Million Plot of Empty Desert Land

We’ve seen some outrageous land deals in California. There are a number desert parcels without any improvements or utilities, in the middle of nowhere, being offered for millions of dollars. Due diligence is key in real estate transactions, especially in the speculative cannabis market. Just because cannabis activity is possible in a certain jurisdiction does not mean an empty plot of desert land there is worth $10 million. Supplying that land with water, electricity, and building out the structure is no small feat. Many remote desert areas lack the infrastructure to supply these parcels with necessary utilities, and the installation of such infrastructure takes many years and substantial cost. Beware.

Scam #3: Work for Equity in My Nonprofit! 

In California, no one “owns” a nonprofit. One cannot buy or sell a nonprofit corporation, and no stock can be issued or authorized by a nonprofit. We’ve discussed this before on the blog.

Still, we have people asking us to review equity agreements where their nonprofit employer is offering stock instead of salary. In some cases, the company offering these fake stock deals may not know any better because they’re being advised by incompetent attorneys. In other cases, however, these companies are knowingly taking advantage of employees who are blinded by the excitement of being part of a bourgeoning industry. Walk away.

Scam #4: Buy My License!

Under MAUCRSA, state licenses are non-transferable. According to 16 CCR 5023(c), if one or more of the owners of a state license change, a new license application and fee must be submitted to the BCC within 10 business days of the ownership change.

Most local cannabis permits are similarly non-transferable. And if they are transferable, most jurisdictions require you to obtain written approval from the local government prior to transfer. Keep this in mind if you’re looking to buy or lease a “cannabis approved” property, There is simply no guarantee you will be able to get a license to operate there.

__

If you’ve come across a California cannabis industry scam, we would like to hear from you! Leave a comment below, or email us at firm@harrisbricken.com.

california cannabis scam

I’ve had it with the scams and schemes in the cannabis industry. I’ve never seen so much dangerously ignorant and downright criminal behavior. Since beginning work in the cannabis industry, I have yet to go a day without encountering some sort of scam. The unscrupulousness of some attorneys, consultants, and operators in this industry needs to be called out and eliminated so we can establish an ethical, regulated industry in California. Towards that end, I’ll be posting a weekly list of scams and schemes to help unsuspecting victims avoid getting taken for a ride.

Scam #1: We Turn Your Cash into a Check Through Real Estate Investment!

There is a group pitching a scheme to turn dispensary cash into checks that can be deposited in the bank. The method: fork your cash over to this group. They toss your cash in with other “investors” and buy real estate with it. They flip the property, and send the proceeds to you in a check. Folks, this is textbook money laundering. The pitcher of this scam is exhibiting at industry conferences across the country and handing out “attorney-approved” contracts. Brazen, stupid, and dangerous for all involved.

Scam #2: Cannabis Cryptocurrency

If you want a lesson on what the government thinks about combining anonymous cryptocurrency with a federally prohibited substance, look no further than the life sentence handed down to Ross Ulbricht, creator of the Silk Road. Ulbricht was convicted of money laundering, computer hacking, and conspiracy to traffic narcotics. Those are the exact same charges that could be brought against any cannabis cryptocurrency company. Don’t get me started on the value of cannabis cryptocurrency on the secondary market. It’s complete b.s.

Scam #3: You Must Cultivate Before Obtaining a Permit

Most people laugh out loud when they hear this. Unfortunately, there are a few attorneys who provide their clients with downright criminal advice, trying to convince would-be business partners or landlords to engage in unlawful behavior. The days of collectives and “creative” lawyering to get around the laws are over. We now have a robust regulatory system under MAUCRSA that makes it clear that you cannot engage in any sort of commercial cannabis activity before obtaining all local approvals and a state license.

Scam #4: Your DUI Attorney Can Handle Your Tax Audit

Just say no. You are a legitimate business, and you need to retain a legitimate and experienced lawyer to handle your legal matters See Seven Keys to Choosing Your Cannabis Business Law Firm.

Did San Mateo’s new ordinance moot the CEQA issue?

Last month, we blogged about the writ petition brought against the County of San Mateo by petitioners who alleged non-compliance with the California Environmental Quality Act (“CEQA”).

CEQA requires environmental review of discretionary projects to inform the public and government decision makers of the environmental consequences of their decisions. The law must be interpreted in such manner to afford the fullest possible protection to the environment within the reasonable scope of the statutory language. Unless exempted, all discretionary projects must receive environmental review pursuant to CEQA.

Under CEQA, the “lead agency”—the public agency principally responsible for approving a proposed project—is responsible for preparing the environmental documents for a project, including any negative declaration or environmental impact report (EIR). If a project is not exempt from CEQA, the lead agency must prepare an initial study to determine whether the project will have a significant impact on the environment, or skip the initial study and conduct an EIR if it is obvious that an EIR is required.

The County of San Mateo’s challenged ordinance allowed cannabis cultivation subject to ministerial approval of license applications. This means there was no deliberation or discretion involved, and the County could issue licenses over the counter, if an applicant checked all applicable boxes.

As we explained in our last post, the County issued a negative declaration with the challenged ordinance following an initial study, determining that there was not substantial evidence that the ordinance would have a significant effect on the environment. Petitioners disagreed, claiming the record contained substantial evidence supporting myriad arguments that the ordinance would adversely impact hydrology and water quality, sensitive species and habitat, air and light pollution, climate change, and other effects.

Further, as ministerial licenses, each cannabis cultivation project under the challenged ordinance would have been exempt from CEQA and none would require their own environmental analysis. That fact alone seems like an end-run around the law.

At the end of February, petitioners and the County held a settlement conference. Shortly thereafter, the County repealed and replaced their cultivation ordinance with one that subjects each cultivation project to discretionary approval. Now, each cultivation project will be subject to CEQA unless otherwise exempt.

MAUCRSA provides a temporary exemption to CEQA to cities and counties adopting a cannabis ordinance subject to specific conditions.  So long as a city or county ordinance requires discretionary review and approval of permits, licenses, or other authorizations to engage in commercial cannabis activity, and includes any applicable environmental review pursuant to Division 13 of the Public Resources Code, the adoption of the ordinance itself is exempt from CEQA. Bus. & Prof. Code, § 26055(h). This exemption expires July 1, 2019.

Arguably, the County of San Mateo’s new ordinance is exempt from CEQA pursuant to Business and Professions Code section 26055(h), and the petition is moot. There are no future hearings on calendar, but the writ petition is still pending. We will keep you posted on any developments: The viability of San Mateo’s approach could have a significant impact on the approach taken by other local jurisdictions with respect to California marijuana licenses.