Add M&C blogs to this category

Take Your Best Shot: Vaccination and Testing Mandates for the Workplace

/in

After the federal Occupational Safety and Health Administration (“OSHA”) issued its COVID-19 Vaccination and Testing Emergency Temporary Standard (“ETS”) requiring vaccine mandates for employers with 100 or more employees in November 2021, the Fifth Circuit issued a stay putting a stop to the enforcement of the mandate.

On December 17, 2021, the Sixth Circuit Court of Appeals dissolved that stay and OSHA immediately posted new compliance dates requiring employers with over 100 employees to comply with the provisions of the ETS by January 10, 2022. Any employer opting to permit employees to test instead of vaccinate must begin testing on or before February 9, 2022. To no surprise, petitions have already been filed with the U.S. Supreme Court seeking an emergency stay of the ETS. This vaccine mandate tennis match is not over yet.

As of now, compliance for large employers includes some of the following: (1) having a vaccination policy; (2) obtaining vaccination status from all employees and maintaining records and a roster of vaccination status (3) providing specific information to all employees about the new requirements and protection against retaliation and discrimination and information about knowingly supplying false statements or documentation; (4) requiring face coverings for unvaccinated employees; and (5) providing paid sick leave to get vaccinated and recover from side effects.

While employers may want to take a “wait and see” approach, companies should think about what it will take to comply with the ETS requirements. OSHA has already stated that it will use enforcement discretion for employers attempting to comply with the ETS in good faith. Employers should contemplate company values and the impact of those values on compliance with the ETS, consider how it will communicate changes in policy, and create policies and procedures regarding implementation and recordkeeping. These are all good initial steps towards compliance as the January 10, 2022 deadline will come up very quickly.

Companies that fail to comply may be subject to fines with the amount depending on how frequent the violation and whether they were intentional. Employers can face fines of up to $13,653 per violation for every serious violation.

The ball is now in the court of the U.S. Supreme Court as employers anxiously await its decision.

Time for Everyone to Roll Up Their Sleeves

/in

Large employers will need to roll up their sleeves to implement vaccination policies while employees roll up theirs to get vaccinated or submit to weekly testing and mask mandates.

As part of its COVID-19 plan, the Biden Administration rolled out vaccine mandates for large employers (100+ employees) to ensure that their workers are either fully vaccinated against COVID-19 or require unvaccinated employees to undergo weekly testing and wear a face covering at the workplace or in a car with another person for work purposes. This requirement takes effect on January 4, 2022, while other requirements take effect in 30 days.

5 Big Take-Aways:

  1. Employers do NOT need to pay for testing (unless otherwise required to do so under other laws, regulations, or collective bargaining agreements). However, they must allow employees a reasonable amount of paid time off to get vaccinated and provide paid sick leave to recover from any side effects.
  2. Unvaccinated employees must be tested within 7 days before returning to work if they have been away from the workplace for a week or longer.
  3. Employers must obtain vaccination status and acceptable proof of vaccination from all employees and maintain records and a roster of each employee’s vaccination status.
  4. Specific information must be provided to employees about these new requirements, vaccinations, protection against retaliation and discrimination, and information about knowingly supplying false statements or documentation.
  5. The new mandates do not apply to employees who work alone or in a workplace where coworkers or customers are not present, employees working from home, or employees who work exclusively outdoors.

There are also a number of other requirements employers must follow regarding handling positive test notifications, OSHA reporting requirements, and making certain vaccination data and documentation available upon request.

Companies that fail to comply may be subject to fines with the amount depending on how frequently the violation and whether they were intentional. Employers who violate the rule can face fines of up to $13,653 per violation for every serious violation.

California Governor Signs New Cannabis Regulatory Bill Into Law

/in

On Tuesday, California Governor, Gavin Newsom, signed into law Assembly Bill 141 which consolidates the three state licensing agencies into one – the Department of Cannabis Control (“DCC”). The DCC is now the lead agency issuing state licenses. Governor Newsom appointed Nicole Elliot to serve as Director of the Department.

Current regulations from the three former state licensing agencies currently remain intact. However, according to the new DCC website, the DCC will be publishing changes to the rules to combine the current set of three regulations into one. However, it’s unclear when this will occur. DCC is authorized to issue emergency regulations which will have a 5-day public comment period.

Some of the changes identified in Assembly Bill 141 are detailed below:

Provisional Licenses

The new law now carves out an entire section relating to provisional license holders. DCC is authorized to issue provisional licenses until June 30, 2022. Renewals will not be permitted after January 1, 2025 and no provisional license shall be effective after January 1, 2026. (Bus. & Prof. Code § 26050.2(o)). Applicants will be required to provide compliance with California’s Environmental Quality Act and with local ordinances, or compliance that these requirements are underway. (Concerns over AB 141’s CEQA language have been raised by industry advocates, and it’s expected that lawmakers will undertake clarification on these issues in August).

Provisional licensees that includes cultivation activities will also need to provide either a final streambed alteration agreement, or a draft of the agreement, or written verification from the Department of Fish and Wildlife that meets the requirements detailed in Section 26050.2(a)(1)(C) of the Business and Professions Code.

In the event, DCC refuses, revokes, or suspends a provisional license, this action will not entitle the applicant or licensee to a hearing or an appeal of the decision. (Bus. & Prof Code § 26050.2(m)).

Provisional Cultivation Licenses

The law prohibits the DCC from issuing a provisional cultivation license that exceeds specified canopy size. If a cultivation application is submitted on or after January 1, 2022, the Department “shall not issue a provisional license…if issuing the provisional license would cause a licensee to hold multiple cultivation licenses on contiguous premises to exceed one acre of total canopy for outdoor cultivation, or 22,000 square feet for mixed-light or indoor cultivation.” (Bus. & Prof Code § 26050.2(a)(2)). The same rule will apply to any provisional cultivation license renewals after January 1, 2023 and after January 1, 2024. (Bus. & Prof Code § 26050.2(g)(1).

Thus, cultivators holding multiple provisional cultivation licenses that exceed the total canopy limits will need to conform their operations to ensure their total canopy requirements do not exceed the specified size requirements under the new law, otherwise their provisional license will be denied.

Trade Samples

Licensees are still prohibited from giving away any cannabis or cannabis product as part of a business promotion (with the exception of donations to patients and primary caregivers). Now, the law implements a new section regarding “Trade Samples.”

Trade samples shall “only be given for targeted advertising to licensees about new or existing cannabis or cannabis products.” No form of payment, consideration, cost, or compensation shall be provided for the trade sample, and it must be labeled with the following: “TRADE SAMPLE. NOT FOR RESALE OR DONATION.” (Bus. & Prof Code § 26153.1).

Testing Laboratories

Clarification was added to identify that a person with a financial interest in a state testing laboratory license shall not hold a financial interest in any other type of cannabis license. This rule intends to further clarify current law that prohibits a person holding a testing laboratory license from holding ownership in another type of cannabis license, or from employing a person that is employed by another licensee. (Bus. & Prof Code § 26053).

Additionally, explicit language was added to further clarify that testing laboratories may test samples from manufacturers and cultivators for quality control purposes – but not for retail sale. (Bus. & Prof Code § 26104(d).

San Diego Cannabis Manufacturer Pleads Guilty In Federal Court

/in

WellgreensCA, Inc., a San Diego-based cannabis oil manufacturer, it’s owner, and manager all pled guilty in federal court last week to violating various offenses related to the transportation and dumping of hazardous waste ethanol. Under federal law, businesses transporting hazardous waste are required to accompany that waste with a uniform hazardous waste manifest. Failure to do so, can subject persons to up to two (2) years of imprisonment, or a maximum fine of $50,000 for each day of violation, or both.

The owner of WellgreensCA, Inc., Lunar Louissa admitted that the business engaged in extracting oils from cannabis which generated various waste, including 55-gallon drums full of waste ethanol. According to a Dept. of Justice press release, the waste ethanol generated by WellgreensCA was a federally-regulated hazardous waste that exhibited the characteristic of ignitability, because it had a flashpoint of less than 140 degrees Fahrenheit.

As a large quantity generator of hazardous waste,1 the business was required to transport all hazardous waste from their site accompanied by a uniform hazardous waste manifest. On multiple occasions in 2018, the business contracted with R.U. and others to transport and dispose of a total of seven (7) 55-gallon drums of waste ethanol – without the required uniform hazardous waste manifest. R.U. then proceeded to transport and dispose of the 55-gallon drums of waste ethanol in various locations around San Diego County, including behind a Vons supermarket in El Cajon.

“The defendants knowingly ignored legal requirements for the proper transportation and disposal of hazardous waste, putting local communities in the San Diego area at risk,” said Special Agent in Charge Scot Adair of EPA’s criminal enforcement program in California said in the press release. “This case demonstrates that EPA will hold accountable those who intentionally violate laws that endanger human health.”

At the time of the incidents, WellgreensCA Inc. held a Type 6 Manufacturing License with the State of California’s Manufactured Cannabis Safety Branch, which has since expired as of April 19, 2021. It’s unlikely the business will be able to obtain another cannabis manufacturing license. Under the State of California’s cannabis laws and regulations, applicants are required to disclose criminal convictions prior to obtaining a state cannabis license and certain convictions will be grounds for denial of a state cannabis license. Furthermore, licensed operators have a duty to notify the applicable State licensing agency in writing within 48 hours of any new criminal convictions.

On June 3, WellgreensCA Inc. and Lunar Louissa plead guilty to Transportation of Hazardous Waste Without a Manifest under Section 6928(d)(5) of Title 42 of the U.S. Code, with a maximum penalty of 2 years in prison, fines greater than $250,000 or ($500,000 for the corporation) or $50,000 per day of violation. Manager, Nadia Malloian plead guilty to Accessory After the Fact to Transportation of Hazardous Waste Without a Manifest, 18 U.S.C. §3 and 42 U.S.C. §6928(d)(5), with a maximum penalty of 1 year in custody, fine of greater of $50,000 or $25,000 per day of violation.

As part of the plea agreement, WellgreensCA, Inc. agreed to pay a $45,000 fine and restitution of $26,482 for the costs of emergency response and restoration of the sites where the hazardous waste was abandoned. The Defendants are scheduled to be sentenced in federal court on August 3, 2021.

  • Under federal regulations, both small and large quantity generator of hazardous waste generators are required to comply with the hazardous waste manifest requirements.
  • Small quantity generators generate more than 100 kilograms, but less than 1,000 kilograms of hazardous waste per month. Large quantity generators generate 1,000 kilograms (2,200 pounds) per month or more of hazardous waste or more than one kilogram per month of acutely hazardous waste.
  • However, some states, including California, have different categories of hazardous waste generators than the federal regulations. For instance, California also requires small-quantity generators to also prepare and keep manifests, in addition to other requirements.

San Diego County Board of Supervisors Approve Developing Commercial Cannabis Licensing Framework

/in

Today, the San Diego County Board of Supervisors voted 4 to 1 to begin developing a regulatory commercial cannabis licensing system within the unincorporated areas of San Diego County. Today’s vote is a vast contrast to prior actions taken by the Board. In 2017, the Board passed an outright ban on the issuance of any new permits for commercial or medical cannabis facilities. Under the 2017 ban, the five (5) existing and licensed medicinal cannabis facilities that are located within the unincorporated areas of the County, would need to close their businesses by 2022.

Today’s action will require the Chief Administrative Officer to:

Develop Zoning Ordinances that would allow for the following:

  • Cannabis Retail allowed in areas zoned commercial and industrial.
  • Cannabis Cultivation allowed in areas zoned for agriculture.
  • Cannabis Manufacturing allowed in areas zoned for industrial.
  • Cannabis Distribution allowed in areas zoned for industrial.
  • Cannabis Testing allowed in areas zoned for industrial.
  • Cannabis Microbusiness license in areas zoned for agriculture, commercial or industrial. Setbacks set at 600 feet from a qualifying “sensitive use” but also consider a data driven process to bring back additional recommendations.
  • Repeal County Zoning Ordinance Sections 6935 (Medical Marijuana Collective Facilities) and 6976 (Prohibition of Marijuana Facilities – Medical or Non-Medical).
  • Allow for the sale of ingestible cannabis products, including edible and drinkable products. Allow for onsite consumption of cannabis products at specific cannabis facilities and at permitted events.

Develop amendments to the County of San Diego Regulatory Code Sections 21.2501 and 21.2503 (a) and develop a new cannabis permitting system that:

  • Allows existing and new Medicinal and/or Adult Use cannabis facilities to obtain a County operating permit for one of the following permit categories: Retail (Storefront and/or Non-Storefront), Cultivation, Manufacturing, Distribution, and Testing; or a County operating permit for a Microbusiness license.
  • Contains a “Social Equity Program” that provides individuals with past cannabis arrests and/or convictions, and those that were low income and lived in high arrest communities or “Disproportionately Impacted Areas” by providing such individuals with greater opportunities to secure a County operating permit, and is in place prior to the issuance of a County operating permit.
  • Requires the issuance of Labor Peace Agreements after hiring of the 10th employee. Follows all applicable State laws and regulations.

Upon approval of a final ordinance, the County will allocate $500,000 to the San Diego County Sherriff Department and Code Enforcement for immediate and aggressive enforcement of unlicensed illegal commercial cannabis facilities and related businesses.

The public will have additional time to comment on any drafts of the proposed ordinance. City staff will need to report back to the Board in 90 days with an update including any regulatory changes that can be implemented within that time, and return back to the Board with final ordinances and policies within 180 days.

Protecting Your Cannabis Business from Proposition 65 Lawsuits in the New Year

/in

Everyone in California has seen them:

CALIFORNIA PROPOSITION 65 WARNING:
WARNING: This product contains a chemical known to the state of California to cause cancer.
For more information: www.P65Warnings.ca.gov

and

CALIFORNIA PROPOSITION 65 WARNING:
WARNING: This product contains a chemical known to the state of California to cause birth defects or other reproductive harm.
For more information: www.P65Warnings.ca.gov

Prior to now, cannabis products meant to be consumed via smoking required a warning regarding cancer, but as of January 3, 2021, products sold at retail in California containing Δ9-THC, the active ingredient in cannabis, will require a reproductive harm warning regardless of whether it is to be consumed via smoking, eating, or otherwise.

The Office of Environmental Health Hazard Assessment, (the State Agency in charge of determining what products require warnings regarding cancer and reproductive toxicity) has deemed Cannabis smoke and the active ingredient in Cannabis, Δ9-THC, to require Prop 65 warnings regarding reproductive harm, and enforcement begins Sunday, January 3, 2021. California’s proposition 65, passed in 1986, requires labels on products listed as causing cancer and reproductive harm. The State enforces these requirements, and penalties are up to $2,500.00 per day for violations. The law also allows private entities to sue for violations in the public interest: it rewards them with 25% of the penalties recovered and allows them to collect their attorneys’ fees from the violator. Defending against such lawsuits requires experts, and expenses quickly add-up. As a result, “bounty hunter” lawyers sue businesses and extract settlements for violations of Prop 65, and we expect them to set their sights on cannabis businesses come January 3, 2021.

Non-combustible cannabis products will need the Prop 65 birth defects warning, and combustible cannabis products will need both the cancer warning and the reproductive harm warning. Of note, the State has not prescribed a minimum amount under which no label is necessary, so any business whose retail products contain THC is potentially subject to such lawsuits. Note: this potentially includes CBD companies whose products are legally hemp (i.e. they contain less than .2% THC). Proposition 65 allows companies up and down the supply chain to be pulled into such lawsuits – those including cultivators, manufacturers, distributors, and retailers are all potentially liable.

Fortunately, cannabis companies have a means of protecting themselves from such lawsuits: compliance and contracts.

Because all cannabis and hemp products can be presumed to have some THC, all products should have the statutory warning label regarding birth defects so as to avoid these lawsuits. Cannabis businesses should modify their SOP’s to include verification that products they handle in the supply chain comply with the statutory warning requirements. Further, although retailers are often the easiest, most visible target of these lawsuits, they are typically not responsible for the packaging of particular products. As such, retailers and distributors can require upstream manufacturers and cultivators (i.e. those who typically design and procure product packaging) to indemnify them in the even of such a lawsuit – that is, the indemnifying company would need to pay for the cost of defending the retailer or distributor in the lawsuit as well as being responsible for paying the cost of any settlement or judgment in the case.

As part of their purchase agreements with others in the supply chain, cannabis businesses should take a cue from other industries that have dealt with these proposition 65 “bounty hunter” lawyers. Cannabis businesses should take proposition 65 seriously and act proactively.

For assistance with integrating proposition 65 compliance into your standard operating procedures and accounting for the risk of proposition 65 lawsuits via your contracts, please contact Adam Winokur with Murchison & Cumming at 213.264.7179.

California Jurisdictions Place Cannabis Measures On the Ballot

/in

Election day is only 1-week away and Commercial Cannabis Licensing seems to be one option that many jurisdictions are considering in order to secure fiscal funding in the wake of the COVID-19 pandemic. Below are just some of the local Cannabis measures that could be on your November 3, 2020 Ballot:

Trinity County’s Measure G establishes a Flat Rate Tax per pound of Cannabis that varies based on the type and weight of Cannabis harvested. The “Full Rate” values are as follows: $15.44/lb. for Cannabis flowers; $4.59/lb. for Cannabis leaves; and $2.16/lb. for fresh Cannabis plants. The amount of pounds of each Cannabis category shall be taxed no more than a specific percentage of the full rate:

  • First 100 lbs. shall be taxed no more than 25% the “Full Rate”.
  • More than 100 lbs. – 400lbs. no more than 50% the “Full Rate”.
  • 400 lbs.-1,000 lbs. shall be taxed no more than 75% the “Full Rate”.
  • More than 1,000 lbs. shall be taxed no more than the “Full Rate”.

Orange County:

  • Costa Mesa’s Measure Q will allow the City to develop licensing for Retail and Delivery businesses to operate within specific areas of the City. It also imposes a gross receipts tax of 4% to 7% on those Retail Cannabis businesses.
  • La Habra’s The City currently allows up to (4) Distribution facilities and (4) Testing Laboratories. Measure W will establish that a tax on those businesses could not exceed 2.5% of gross receipts. It further authorizes the City to establish licensing of up to four (4) Delivery Licenses and authorize a Cannabis tax of up to 6% of gross receipts on other Cannabis businesses.
  • Laguna Woods’ Measure V is advisory vote seeking voter input on whether the City should establish a regulatory licensing framework for commercial Cannabis Retail and Delivery businesses within commercial zoning districts in the City.

San Diego County:

  • Encinitas’ Measure H will open up commercial Cannabis licensing for Cultivation, non-volatile Manufacturing, Cannabis kitchens, Distribution, and up to (4) Retail and Delivery facilities. The Measure would also permit Industrial Hemp in Agricultural zones.
  • Lemon Grove: Measure J, with a general Cannabis business tax of up to 8% of gross receipts for Retail sales, including Delivery and microbusinesses; and up to (4%) of gross receipts for Cultivation and Manufacturing of Cannabis; up to two percent (2%) of gross receipts for Testing laboratories; up to three percent (3%) of gross receipts for Distribution of Cannabis. The City currently only allows medicinal Cannabis Retailers. If passed, this Measure would likely provide the City with incentive to open up additional types of recreational Cannabis licenses.
  • Oceanside’s Measure M – Amends the current City code to impose a new business license tax. The City Council may impose a tax of up to 6% of gross receipts generated by Cannabis Retailers, manufacturers and distributors. Cultivation would be no higher than 3.5% of gross receipts.
  • Solana Beach’s Measure S – Authorizes a total of two (2) adult-use/medicinal storefront Cannabis Retailers and would impose an additional 1.25% sales tax upon gross sales of non-Medical Cannabis and non-Medical Cannabis products. Personal indoor Cultivation would be allowed with specific requirements.


Ventura County

  • Ventura County’s Measure O will allow commercial Cannabis Cultivation, nursery Cultivation, Processing and Distribution within unincorporated areas of Ventura County. Establishes a 4% gross receipts tax on Cultivators and 1% gross receipts on Nurseries.
  • Ojai’s Measure G will establish an immediate 3% tax on Cannabis businesses. The City will be authorized to increase the tax up to 10% of gross receipts. The City currently allows for the following types of Cannabis businesses: Testing Laboratories, and a maximum of: (2) Manufacturers, and (3) Microbusinesses.
  • Ventura (City): Currently prohibits any Cannabis operations. If passed, Measure I could open up licensing opportunities for Cannabis businesses. It proposes a maximum tax on gross receipts as follows: 2.5% for Testing Labs; 8% for Retail, and Microbusiness Retail; 3% for Distributors; and 4% for Manufacturing, Non-Retail Microbusiness, and any other type of business not otherwise specified. Cultivation will be taxed per square foot of canopy ranging from $2.00 – $10.00 per square foot of canopy, depending on lighting.

Riverside County

  • Banning’s Measure L will impose an annual tax on Cannabis Distribution facilities in an amount equal to ten percent (10%) of their gross receipts. The City currently permits Retailers, Cultivators, Manufacturing and Testing. In July 2020, the Banning City Council passed an ordinance to allow Cannabis Distribution facilities, if a Cannabis Distribution tax is approved.
  • Jurupa Valley’s Measure U would open up commercial Cannabis Cultivation, Distribution, Manufacturing, Testing laboratories and Retailers with a conditional use permit and annual regulatory permit. The number of Retailers will be limited, and based on population (1 per 12,000 population). A total of 9 Retailers could operate under the City’s current population.

Clark County Commission unanimously approves drive-thru marijuana dispensaries

/in

Drive-thru marijuana dispensaries are soon to be sprouting up in Las Vegas. As of September 3, 2020, dispensaries located in unincorporated Clark County are legally able to operate drive-thrus. This development comes after the County Commissioners unanimously voted to approve the ordinance which applies to both retail and medical marijuana businesses.

Prior to this zoning implementation, the only local dispensaries that had drive thrus were NuWu Cannabis Marketplace, which is on tribal land, and more recently, THRIVE Cannabis Marketplace in North Las Vegas, following the cities’ removal of a provision prohibiting drive through and walk ups in June of 2020.

Businesses that want to add a drive-thru are first required to obtain approval from both the county and state. In addition to the other county regulations for cannabis business, those interested must submit plans that include a certified review from a licensed land surveyor.

Find more information regarding permits HERE.

Battle on Classification of Gig Workers Surges Forward

/in

On August 10, 2020, Uber Technologies, Inc. and Lyft, Inc. were dealt a blow to their fight against re-classification of their California drivers from independent contractors to employees. California’s attorney general brought a case against the two companies and requested a preliminary injunction to enforce Assembly Bill (AB) 5. The City Attorneys of San Francisco, Los Angeles and San Diego also joined the lawsuit against the companies.

Under AB 5, which was signed into law, employers must classify workers as employees unless they meet all conditions of the following ABC test:

A. The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.

B. The person performs work that is outside the usual course of the hiring entity’s business.

C. The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

While San Francisco Superior Court Judge Ethan Schulman ruled against Uber and Lyft, the injunction will not go into effect for 10 days to allow the companies to appeal the decision.

Not surprisingly, Uber and Lyft opposed the motion for a preliminary injunction as well as bringing a number of motions themselves. San Francisco Superior Court Judge Ethan Schulman found the defense motions to be “groundless.” Judge Schulman specifically noted that the motions all “have in common an attempt to delay or avoid a determination whether, as the People allege, they are engaged in ongoing and widespread violations of AB5…” Judge Schulman went on to state that “Defendants are not entitled to an indefinite postponement of their day of reckoning.”

In his Order, Judge Schulman wrote, “It’s this simple: Defendants’ drivers do not perform work that is ‘outside the usual course’ of their business. Defendants’ insistence that their businesses are ‘multi-sided platforms’ rather than transportation companies is flatly inconsistent with the statutory provisions that govern their business as transportation network companies, which are defined as companies that ‘engage in the transportation of persons by motor vehicle for compensation. It also flies in the face of economic reality and common sense.” Judge Schulman went on to state, “To state the obvious, drivers are central, not tangential, to Uber and Lyft’s entire ride-hailing business.” While Judge Schulman ruled against Uber and Lyft, the injunction will not go into effect for 10 days to allow the companies to appeal the decision.

This ruling has potentially devastating implications for California gig economy companies that utilize independent contractors. Many gig companies with business models built around the flexibility of its workers have been watching the ride-hailing companies fight this issue and some have held off on implementing AB5. If Uber and Lyft lose their appeal, companies will need to be prepared to take swift action to properly classify their workers or their exposure to claims related to overtime and other wage and hour issues will continue to grow.

Email Heidi Quan for more information or any other questions.

Judge Orders Municipalities to Show Standing in Order to Sue CA Bureau of Cannabis Control

/in

On Thursday, a Judge ordered a one (1) month continuance to allow 25 municipalities to provide evidence showing their issues are “ripe” against California’s Bureau of Cannabis Control (“BCC”). The BCC is California’s lead enforcement and licensing agency for commercial cannabis retailers, delivery services, distributors, testing laboratories, and microbusinesses.

California Superior Court Judge Rosemary McGuire wrote in her tentative ruling:

“[A] basic prerequisite to judicial review of administrative acts is the existence of a ripe controversy…The ripeness doctrine prevents the courts from issuing purely advisory opinions or engaging in premature adjudication of abstract disagreements…A controversy is ‘ripe’ when it has reached, but has not passed, the point that the facts have sufficiently congealed to permit an intelligent and useful decision to be made.”

“Here, plaintiffs’ challenge to California Code of Regulations, title 16 section 5416, subdivision (d) is not ripe under the two-pronged test set forth by the California Supreme Court in Pacific Legal, which calls on a court to evaluate (1) the fitness of the issues for judicial decision, and (2) the hardship to the parties of withholding court consideration.”

Last year, the County of Santa Cruz and many other jurisdictions joined together to sue California’s Bureau of Cannabis Control over it’s Regulation relating to the Delivery of cannabis in local jurisdictions, which provides in part that:

“A delivery employee may deliver to any jurisdiction within the State of California provided that such delivery is conducted in compliance with all delivery provisions of this division.” [16 CCR § 5416(d) emphasis added].

The municipalities argued that Section 5416(d) impinges on their rights to local control, which was granted to them by voter initiative Proposition 64, and “per se damages California localities, both as to any present conflicting or inconsistent ordinance and as to any future ordinance, presently contemplated or not.”

Yesterday, Judge Rosemary McGuire disagreed with Plaintiff’s arguments.

“Accordingly, the parties are ordered to brief the issue of ripeness with regard to each and every plaintiff and to submit such briefing according to the schedule…Plaintiffs that do not have standing are invited to withdraw. Plaintiffs that allege standing must submit evidence to show that they have an ordinance in place which is contrary to California Code of Regulations, title 16 section 5416, subdivision (d). Plaintiffs must also point to the exact place in record where the evidence is located (e.g., volume, page number, line number). Plaintiffs who cannot establish standing will be dismissed.”

The 25 Jurisdictions listed as Plaintiff’s include: County of Santa Cruz, City of Agoura Hills, City of Angels Camp, City of Arcadia, City of Atwater, City of Beverly Hills, City of Ceres, City of Clovis, City of Covina, City of Dixon, City of Downey, City of McFarland, City of Newman, City of Oakdale, City of Palmdale, City of Patterson, City of Riverbank, City of Riverside, City of San Pablo, City of Sonora, City of Tehachapi, City of Temecula, City of Tracy, City of Turlock, and the City of Vacaville. Email Kelly Hayes for more information or any other questions.