California CannabisThere have been countless reports of how California’s medical and adult use cannabis markets under the Medical Cannabis Regulation and Safety Act and the Adult Use of Marijuana Act (now, combined under the Medicinal and Adult-Use Cannabis Regulation and Safety Act (“MAUCRSA“)) will generate billions of dollars in revenue. Unless more California cities and counties allow commercial cannabis activity within their borders, these numbers will prove far too high.

Our California cannabis clients are constantly asking us questions like, “where in California should I set up my cannabis business? Which California cities and counties are the friendliest towards cannabis? Who is regulating now for what I want to do?” And though the list of “welcoming” cities and counties continues to change, it seems the worst cities and counties for cannabis continue to remain the same, despite the will of the voters and the actions of the California legislature.

When it comes to cannabis the below is my list of the five worst California cities and counties for commercial cannabis activity — not shockingly, most on this list are in Southern California:

  1. Los Angeles County. The most populous county in the United States has for a long time had a complicated relationship with cannabis. Though at one point Los Angeles County passed comprehensive regulations for medical marijuana dispensaries, (which remain in the County Code to this day) it has since instituted a ban on dispensaries and, as of 2016, it has also banned all commercial marijuana activities within unincorporated areas of the County. In March of last year, the County voted to shut down all illegal dispensaries and it has vigorously pursued those shutdowns. It also adopted an ordinance that makes it explicitly illegal for landlords to rent to any marijuana operators. And just this month, the County again voted to extend the ban for an entire year on all marijuana-related business activity, though with this vote the County for the first time also outlined “reasonable regulations” for personal use of marijuana for medical purposes by individual patients. There is though some light at the end of the tunnel since the County expects eventually to pass comprehensive regulation for marijuana businesses. Though the MAUCRSA does not require local government approval of your cannabis business before you receive a California state license, eventual compliance with local laws is still required in the state licensing process. What this means is that unless and until L.A. County sets up its regulatory scheme, we shouldn’t expect a lot (or any) state-licensed or locally permitted commercial marijuana activity in the County.
  2. City of Riverside. In 2013, the City of Riverside won a landmark case before the California Supreme Court upholding its right to ban medical marijuana collectives within its borders under Proposition 215. And since the MAUCRSA does not prohibit cities and counties from banning marijuana businesses, Riverside is keeping with its prohibitions against cannabis businesses within city limits. City of Riverside voters rejected a 2015 ballot measure that would have allowed and regulated a small number of dispensaries in the City and since 2007, Riverside has shuttered 118 dispensaries — giving it the supposed distinction of being the only California city with a 100% closure rate. Riverside is keeping its ban on medical marijuana businesses in place for now, and though it has yet to make a decision about adult-use marijuana businesses, we can fairly safely predict that too will be a no-go.
  3. Orange County (and most of its cities). Though beloved cannabis reformer (and author of the Rohrabacher-Farr Amendment) Congressman Dana Rohrabacher hails from the OC, his home county and most of its cities are pretty bad when it comes to allowing for/regulating commercial cannabis activity. Orange County banned dispensaries (and all other medical marijuana activity) in 2010 after the Sheriff’s Department submitted a report to County supervisors stating that “dispensaries [were] responsible for an uptick in robberies, burglaries, weapons violations and money laundering.” Though some OC cities allow for small home grows for qualified patients and their primary caregivers, most OC cities (including its largest city, Anaheim)do not allow any commercial cannabis activity or they charge an arm and a leg for it (see Costa Mesa‘s approximately $94,000.00 price tag for cannabis permitting). And let’s not forget that botched dispensary raid in Santa Ana in 2015. Back in January of this year, the County did begin talking about regulation of marijuana businesses after passage of Proposition 64 but so far nothing has come of that discussion and OC cities mostly continue to opt for prohibition.
  4. Marin County. When it comes to cannabis business regulation and Marin County, two words come to mind: drama and disappointment. In December 2015, Marin County passed an ordinance (effective in February of 2016) giving its Board of Supervisors authority to license medical cannabis dispensaries in unincorporated Marin. This ordinance allowed up to four dispensaries in two zoned areas. Ten applications were submitted to the Marin County Board of Supervisors and open to public hearings. The County Administrator, Matthew Hymel, rejected all ten of the applications pretty much over substantive concerns with each application and because residents were concerned about having an over concentration of brick and mortar dispensaries within the county. Eight of the ten applicants appealed that decision and Hymel rejected all of those appeals. To date, the County hasn’t picked up the torch again on a revised approach to regulating marijuana dispensaries or other commercial cannabis activity.
  5. City of Pasadena. If you can’t beat ’em, take away their resources. This is what Pasadena has done in a concerted effort to choke out and shut down illegally operating cannabis businesses within its city limits. It was reported that, as of May of this year, “. . . there are 12 shops in Pasadena that sell marijuana . . . None of them have permits to operate. One of two dealers with numerous citations for illegal distribution said through it attorney that it will not stop selling pot until ordered to do so by a court. Even after sending cease and desist letters and suing half of the operators, these shops still are not closing their doors. In response, Pasadena decided through an ordinance to shut off utilities to illegal operators to force them to close (not surprisingly, Anaheim and L.A. have also used this tactic). Pasadena makes my list not because it is trying to enforce its own laws but because it has not given immediate or emergency regulation a shot. Instead, it’s choosing to waste additional time and tax payer dollars shuttering operators it could have re-located, regulated and taxed.
  • Sherry

    What’s the situation in California City?