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Pros and Cons of The New Proposed California Cannabis Delivery Regulation

With Proposition 64 passed by over 57 percent of California voters, many believed that they would have access to legal, recreational, and medical cannabis in their community. However, almost one year into the market being legalized many Californians have realized that their access to cannabis is not as open as they had hoped. Most people believed it would be as easy as walking into a corner store to get some beer. Sure, there would be regulations, but the customers/patients wouldn’t be impacted by those regulations, right?

Well, the current state of affairs has proven that the customers/patients are the ones most adversely impacted. The Bureau of Cannabis Control (BCC; the governing body for retail, testing, distributors, events, and microbusinesses) issued its first set of Proposed Emergency Regulations in November 2017. The regulations limited delivery of cannabis to the consumer in the local jurisdiction which issued the delivery license. Meaning, that a delivery service licensed in West Hollywood would not be able to cross into Beverly Hills to deliver cannabis. The second set of proposed regulations had a major alteration to the delivery aspect. It allowed delivery from one jurisdiction to another without approval of the second jurisdiction. For example, a delivery service located in Los Angeles would be able to deliver cannabis to a consumer in San Bernardino, even if the delivery service was not licensed in San Bernardino.

You may think, well that is not that big of a change, not many people probably have a stance on such a small change in the regulations. If you think that, saying you’re incorrect would be an understatement. While at the most recent BCC public commenting hearing in Los Angeles, there were no less than 15 separate comments regarding the change in the delivery regulation. So, what are some of the pros and cons of allowing this new proposed regulation to become final?

Pros

Patients who cannot leave their house, their community does not allow cannabis, or have no other way to get their medicine, now have access to some relief. Let’s remember that medical cannabis was allowed in the state first. So, allowing existing patients to have access to medicine, some of who only find cannabis to be helpful, is a HUGE pro for this new proposed regulation. Not only does it allow patients to get cannabis they need, but it allows them to get the proper type of cannabis. As we all know, not all dispensaries carry the same selection. So, if a retail shop in closest proximity to a patient doesn’t carry the proper cannabis to provide relief, this new regulation allows the patient to get the proper medicine from a dispensary that may be in a different jurisdiction.

 Another pro, is that it allows businesses to potentially increase profits. This will allow delivery licensees and retail shops that operate a delivery component to increase sales. Now, this may not be good news for everyone, but it is good news for those businesses, and since I am a business attorney, I need to address that aspect. Although you will see below this is a catch 22.

Cons                                                 

Prop 64 left the decision to allow commercial cannabis activity to the local jurisdictions, which goes hand-in-hand with one of the biggest cons to the new regulation. Many cities, counties, and local communities have voiced objection to the new, proposed regulation. A representative from Beverly Hills commented that the new regulation takes away the city’s right to determine if it will allow commercial cannabis activity. It is hard to argue with that stance as that is exactly what it does.

Another con is that local businesses may be hurt. As mentioned above, allowing delivery across all jurisdictions in the state will increase business for some retailers and delivery services. However, local, smaller businesses that do not have the ability to purchase the top-shelf product may be hurt. The brick and mortar store at your corner may only carry a select few items, none of which you like. Obviously, you want the products you enjoy, especially if you are paying the amount of taxes you do (taxes will be addressed in a separate post). So, what’s the logical thing to do? Order from another retailer that will deliver it to you. This in return will take potential sales away from retailers.

Conclusion

Obviously, this article does not address all the pros and cons regarding the newly proposed delivery regulation. However, it should spark some more conversation on the issue. If the most recent BCC public commenting hearing in Los Angeles was any indication, there is a lot of support and objection to the new delivery standard.

All information provided in this article is for educational purposes only, and does not constitute legal advice. Each situation is dependent on the specific facts and must be evaluated on a case-by-case basis. If you’d like to discuss the specifics of your situation, please call our office at (213) 784-3640