San Jose Dispensary Regulations - Repeal

8/13/2019 San Jose Dispensary Regulations - Repeal

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C OU N C IL AGENDA: 2/14/12ITEM: 3.5

CITY OF ~S A N J O S ECAPITAL OF SILICON VALLEY

emor ndumTO : H O N O R A B L E M A Y O RAND CITY COUNCIL FROM : Richard DoyleCity Attorney

S U BJE C T : Legal U pdate on M edicalMarijuana DATE: February 6, 2012

S U P P L E M E N T A L M E M O R A N D U MThe attached Informational Memorandum is beingconsideration at the February 14, 2012 meeting. Thedistributed on Ja nuary 31, 2012.

redistributedmemorandum for Councilswas originallyRICHARD DOYLECity A ttorney

. i n h e s t e rSr. Deputy City AttorneyEncl.

For questions please contact Colleen D. Winchester, Sr. Deputy City Attorney, at 535-1946.

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HONORABLE MAYOR AND CITYCOUNCILJanuary 31,2012Sub ject: Legal Update on Medical MarijuanaPage 2Re peal the Reg ulatory Ordinance and ad opt an ordinance that is "essentiallydifferent" from the o ne that is repealed, a ddressing the co llectives andcooperatives,.

This memo randum provides Cou nci l with updates on the ever-changing status ofmed ical marijuana for its consideration in considering these policy options..A. Procedural Developm ents since Septemb er, 2011.

Since the adoption of the Reg ulatory Ordinance, there have been ~evera importantlegal devel.opmen t~ regarding m edicinal m ari juana:

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The federal governm ents concerted enforcem ent action against Californiacollectives by the Un ited States Attor.neys,-I:he S tate Attorney Gen erals inabil ity to adop t Updated guidelines regarding.med ical mari juana;Ame ricans for Safe Access request to init iate a p etition to place an statewideinitiative on the No vembe r; 2012, ballot; andThe Ca lifornia Supreme Courts decision to grant review in four opinions.regarding me dical marijuana; including Pack vo C~ty of Long Beach and City ofRiverside v. In lan d Empire.

San Jo ses principles on ma rijuana a nd ea ch of these ac tions will be discussed in detailbelow.B. San Jose s Marijuana Principles.

For ove r two years, San Jsses policy on me ~lical marijuana has been d ebated at-nume rous Counci l and staff me etings. Both the R egulatory and Zoning Ordinances a reshaped to conform to the pr incip les adopted by Counc i l in M arch, 2010. The p r incip lesinclude the following: ..San Jo se recog nizes that California law allows a patients primary ca regiverto cultivate and possess ma rijuana for the pe.rsona me dical purposes of the patientupon the recomm endation of a physician;San Jose w i ll follow the guidance of the Cal i fornia Attorney G eneral and theUnited States Attorney Gen eral in criminal enforcem ent of the laws regardingmedicinal use of marijuana. ,Individuals or entities that cultivate or distribute m arijuana for pro t-rt are operatingi llegally under state taw and are i l legal Under the San Jo se Mu nicipal Code.


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HONORABLE MAYOR AND CITY COUNCILJanuary 31, 2012Sub ject: Legal Update on Medical MarijuanaPage 3

W ithin the past two mo nths, the sec ond o f these pr incip les, to fol low the g uidance fro~the state and fede ral law en forcem ent officials, has becom e increasingly d fficult.In 1996 , Cal ifornia voters ad opted the Compa ssionate Use Act (CUA) to encourage thefederal and state governments to implement a plan to provide tot safe and affordabledistribution ofmarijuana to all patients in need of medical marijuana. Although thestate subsequently adopted the M edical Marijuana Program Act (MMP A), the federaland state governme nts have neither .implemen ted a "plan" nor PrOvided guidance toallow local governmen ts to do so in its absence .AN AL Y S I SThe legal uncertainty surrounding med ical mari juana has increased in the past severalmo nths in light of fede ral law en forcem ents recent actions against marijuana co llectivesand Attorney G eneral Kam ala Hards inabil ity to issue revised statewide guidelines.These e vents are com plicated by the Caiif0rnia Suprem e Courts action granting reviewin four decisions regarding tf~e regulation of me dical marijuana at the local level. Two ofthe decisions, Pack v . C i ty o f Long B each and C ity of Riverside v. Inlan d EmpirePa t ient s Health & W ellness C enter, address ho w far a local jud~dict i0n m ay "permit" orregulate me dicinal marijuana collectives and wh ether or not the cities have the abil i ty toban col lect ives entirely. The other two Ca ses address preem ption and who has theability to challenge ordinances. In short, the legal landscape has become moreuncertain.

A. Federal Enforcement Actions.As explained recently in our Septembe r 7, 2011, mem orandum , mafijua.na rema insillegal unde r federal law regard less of the status of a particular states law oncom passionate med icinal Use. Fede ral taw enforcem ent officials have em phasized thatit wil l not focus its investigative and pro secutod al resource s On individuals who are instrict com pliance with a.states :c0mpassionate med icinal use laws.On June 29, 2011, the United States D&puty Attorney General Jame s Cole expressedalarm ab out the increase in Cultivation, sale and distribution of marijuana for purportedmed ical purposes. "Several jurisdictions ha ve con sidered or e nacted legislation toauthorize pr ivately-operated industr ial ma rijuana c ultivat ion centers. Som e o f thesefacil it ies have reve nue pro jections of mil lions of dollars based o n the planne d cultivationof tens of thousand s of canna bis plants." Deputy AG Cole states that a pr iormem orandum ~vas never intended to shield such activities from federa enforcem entaction and p rosecution, even wh ere those activities purpbrt to comply.with state taw."On Octobe r 6, 2011, four United S tates Attorneys .anno uncedl in a joint pressconference c oordinated enforcem ent measu res targeting Californias " il legal com mercial

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HONORABLE M AYOR AND CITY" COUNCILJanuary 3t 2012 .Sub ject: Legal Update on M edical .MarijuanaPage 4 .

ma rijuan a indust[y." The effort is "aime d at curtail ing the large, for profit ma rijuan aindustry that has developed" since the Comp assionate Use Act was, adopted in 199 6.After this press conference, som e coop eratives and their landlords received lettersproviding fformal notice" that their dispensary ope rations violate federal law and tha t theopera tion may result in =criminal prosec ution, imprisonm ent, fines and forfeiture ofassets, including the real property on wh ich the dispensary iS operat ing and any m oneyyou receive (or have rece ived).from the dispensary op e.r, ator."

B. State Attorney General s Position.In 2003, the Med ical Marijuana Program authorized the States Attorney G eneral todevelop and adapt ap propriate guidelines to ensure the "security and nond iversian ofmarijuana grown for m edical use by qua lified p atients un~ler the Com passionate UseAct af 1996." In 2008, then Attorney Ge neral Brawn ada pted guidelines, which soonbecame outdatedby the ever-eval.ving Case law regarding med ical marijuana. Whe nKamala Harris was elected,, she was urged to revisit the 2008 guidelines. On Dec ember 21,2011, Attomey G eneral Harr is issued two letters on med icalmari juana, one ad d[essed to state legislators and the other to "partners andcolleague s", stating that her office is unable to issue updated guidelines unti l there isclarification o f the states law s. (Exhibit "A".)She p refaces bo th letters with the following:

As the states chief law enforce me nt official, I am troubled by theexploitation of Ca lifornias me dical marijuana laws by gangs, criminal enterprises and others.AG H arris indicates that she "canno t protect the wil l of the voters, or the ability ofseriously i ll patients to access their me dicine, unti l statutory chang es are m ade .that define the scope o f the cultivation dght, whether dispensaries and e diblemari juanaproducts are pe rmissible, and how mari juana grow n for medical usemay be awful lytransported-"AG H arris has me t with law enforceme nt, Cities, counties, patients and representativesfrom civil dghts comm unities. She cites several ambiguities in state law that, .combinedwith the recent unilateral federa enforcem ent, has hi~hlighted the need ]:or statewideclarification on imp ortant issues including the right to cultivate; dispensary m ode l,transportation, nan-profit operat ion and e dibles. Each of these issues and S an Jose sapproac h to it is set forth below.

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HONORABLE M AYOR AND CITY COUNCILJanuary 31, 2012Subject: Legal Update on Medical MarijuanaPage 5

Scope of the right to cultivate.The He alth an d S afety Code recognizes that "qual if ied pa tients and their primary caregivers" "who a ssociate in order to collectively or coop erative cultivate ma rijuana formed icinal purposes, shall not solely on the bases o f that fact. be subject to state criminalsanctions" under Section 1135 7 (possession), 11358 (planting, harvesting orprocessing), 11359 (possession for sale), 11360 (unlawfultransportation, importation,sale or gA), 11366 (maintenance o f a place), 11366 .5 (manage men t or control of place)or 11570 (drug house).AG H ands d iscusses the co nfl icting legal interpretations. Strict construtionists arguethat ~nly.those involved in the ph ysical cult ivat ion are enti t ed to the de fense, wherea sothers believe large sca le distribution mode ls are permitted. The divergent viewpointscreate unc ertainty for both law enforce me nt and the seriously i l l patients.In People v. Mentch (2008) 45 Cai.4th 274,.the California Supreme Court analyzed theCompa ssionate UseAct and the Med ical Mari juana Program in the context of mari juanagrown in an individual s home . Roger Me ntch had a physicians recom men dation formari juana which h e grew in his hom e in an "elaborate setup" Of at least82 mari juanai:i lants in var ious stages of growth. Me ntch provided m ari juana to several otherindividuals with physician recommendations. He used the money paid to him for nutrients, rent and uti l it ies, but did not profit from the ma rijuana , but, rather some timeshe did not coverhis expenses. He was arrested and charged with cultivation ofmarijuana (Section 11358 ) and po ssession with the intent to sell (Se~:tion 1135 9).Me ntch argued that he was a qual i fied patient enti tled to cultivate and that he was aprimary care giver ent i tled to cult ivate an d po ssess i t for sale to others, The tr ial courtrefused to instruct the jury on a pr imary caregiver defenseand M entch was co nvicted.The S upreme Court granted review to add ress the definition of a "primary ca.regiver."It held that a "primary caregiver" must h ave: ~(1 ) consistently assum ed #esponsibi l ity fora patients care; (3) indepe nden t of any assistance in taking me dical marijuana, (3) at orbefore the time he or she assum ed respon sibili ty for assisting with med ical marijuana."The Court found that Men tch was not a pr imary caregiver ent it led to the defense un der.the Com passionate Use Act. The Court said that the text of the statute impl ies a"caretaking relationship directed as the core survival need s of a seriously i ll patient, notjust one single pharmaceutical need. The Supreme Court quoted the ballot measurein Support of the Com passionate Use Act:

Proposition 215 allows patients to cultivate their own m arijuana simplybeca use fede ral laws preve nt the sale of marijuana, and a state initiativecannot overrule those laws.

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HONORABLE M AYOR AND CITY COUNCILJanuaw 31,2012.Subject: Legal Update O n Medic~,l Mar~uanaPage 6

Me ntch testified that he provided e xcess growth to marijuana .clubs. The Sup reme Co urtrejected a pr imary ca regiver defense. Even i f he were a caregiver to one person, i twould "not protec t him from prose cution for cultivating marijuana a nd providing it tocannab is clubs." The Court also noted a bal lot pamphlet argum ent that the Act was notintended to protect "anyo ne wh o grows too mu ch, or tr ies to sell i t.".The Court also found also that the M edical Mari juana Program provides addit ionalcriminal immunities but only for specific actions . The Court noted that those who fallti th in the pa rameters o f the M MP are no t subject on tha sole basis" to cr iminal liabi li tyfor those act ions. To the extent that conducl~ fal ls outside of the enumerated conduct,the defenses do not apply.The Mentch Court does not address whether the individuals would.have had a defensei f they were part of an association of individuals "to co llectively or coope ratively"cultivate marijuana under Health and Safety Code S ection 11362.775.Decisions following M.entch have raised, but not resolved, this issue. As stated in thisOffices mem orandum of Decem ber 10, 2010, case law suggests that the MM PA allows-for the creation of co l lect ives, but the col lect ive m emb ership must be involved in theco[lectives activities other than simply paying for medical marijuana. -.For these reasons, the Regulatory Ordinance as adopted by Counci l on September 13,2011 and subject to the referendum p royides:

No m edical mari juana sha l l be provided to any persons other than theindividual collective mem bers who participate, either directly or through aprimary ca regiver, in the co llective cultivation at or upo n the prem isesand/or loca tion o f that collective.

SJMC .6.88.440(G)..ii . Dispensaries

AG H arris states that the term "dispensary~ is neither found in the CUA no r defined inthe later MM PA. She urge s the Legislature to "weigh in" about ho.urs, locations, audits,security, zoning, compe nsation and. whe ther or not sales are permissible.AG Harris warns that the decision in Pack v . C i ty o f LongBeach suggests if the Stategoes too far in regulating m edical marijuana en terprises (by perm itting them, requ iringlicense o r registration fees, or calling for ma ndatory.testing) the law may be p reem ptedbyFe deral law." (Rack is one of the cases under- review by the California SupremeCourt.)

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H O N O R A B L I ~ ~ V ~ Y 6 R ND CITY COUNCILJanuary 31, 2012Subject: Legal Update on Medical MarijuanaPage 7

San Jose s Regulatory and Zoning. Ordinances ad dress hours, locations, audits,.secud ty and zoning. The City does no t "perm it" or "allow~ any con duct prohibited byfederai law and instead creates an affirmative defense to Municipal Code enforcem ent.Loca l limitations in l ight of the fede ral law w ere previously exp lained by the C aliforniaSupreme Court in Ross v. Rag ingW ire Teleco mmun icat ions, Inc.:

No state law co uld, completely legalize ma ri juana for medical purposesbeca use the drug rem ains i llegal under fede ral law (citation), even formedical users citations). Instead of attempting the impossible, as weshallexplain, Californias voters merely exempted medical users and their primary caregivers from c riminal liability unde r two specifically designatedstate statutes .... Although Ca lifornias voters had no pow er to changefederal law, certainly they were free to disagree.with Congres.ssassessment of.marijuana, and they also were freeto view the possibil i ty ofbeneficial medical use a s a sufficient basis for exem pting from criminall iabil ity under state law patients whose ph ysicians recomm end the d rug.

Thus, the R egulatory and Zoning O rdinances create an.aff irmative defense to localenforcement. No publ ished decision addresses wh ether a publ ic ent i ty is preem ptedfrom creating an affirmative defense to local municipal code enforcem ent.iii. . Non-Prof~ Operation

AG H arris states distribution a nd sa les for profit of marijuana, m edical or othe rwise, arei llegal. (Hea lth & S afety Code 11362 .765.) AG H arr is reque sts that the statelegislature, clarify the scope of "non-profit" operation of a collective, including wha t levelof expense s are permissible. This clarification sho uld include determining wha t costsare reasona ble for a col lect ive to incur, including whether o r not com pensation may be"paid to mem bers for working in a collective.The Regulatory Ordinance provides thatin-kindor monetary contributions towardoverhe ad exp enses m ust be in. "strict comp liance w ith State taw." It continues that on.the f i fteenth of each month, the co l lect ives.are to provide an accouqting of the overhead expenses to each o f its mem bers~ [SJMC 6.88 .440 (D)., (E).] Overhead, in turn, is.defined to include, "actual costs of cultivating medical ma rijuana incu rred by thecollective including mo rtgage pay me nts, rent, util i ties, business and prope rty taxes,property insurance, cultivation materials and equipment, and fees paid to comply withthe requirements of this Chapter." (SJMC 6 .88.250.)A pdor draft of the Reg ulatory Ordinance excluded "salaries, wages a nd bene fits" paidto employ ees from the d efinition of overhea d. [n Apd , 2011, this exclusion was deletedin l ight of the AG s guidel ines that perm itted such overhea d, leaving the Re gulatoryOrdinanc e silent. AG Ha rris urges .that the legislature clarify this issue.

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HONORABLE M AYOR AND CITY COUNCILJanuary 31., 2012Subject: legal Update on Medical MarijuanaPage 9

ballot. Even thoug h the initiative proc ess is in its early stage s, it ma y be a tong-termconsideration.D. Action by the California Supreme Court.

As previously stated, on January 19 , 2012, the Cal i fornia Supreme Court granted reviewin four cases involving me dical marijuana. Once .the California Suprem e Court grantsreview of a ca se, i tcannot be used o r rel ied u pon unti l the C ourt make s a de cision. Inthe me antime, legal analysis mu st be based upon pr ior publ ished decisions. Here, thefour cases now before the S upreme . Court address issues that are central to the me dicalmarijuana analysis:t Pa ck v. Superior Co urt (2011) 199 Cal. App. 4th 1070: In this case, the court ofappea l held that Long Beachs ordinance "perm itt ing". collectives was preemp ted

by federal law. The court.found that the Long Bea chs ordinance went beyo nddecriminalization..C ity of Rivers ide v. Inland Empire Pa t ient s Hea lth & We llness. Ce nter, Inc. (2011)200 Cal. App. 4th 88 5: This decision held that Riversides ban of medicalmari juana col lect ives wa s a lawful use of i ts zoning powers and was notpreemp ted by either federal or state law.People v. G3 Holistic (2011) 2011 Cal. App. Unpub. LEXIS 8 634: This case alsoupheld the Citys abil ity to ba n co llectives.

,. Traudt v City of Dana Point (2011) 199 Cal. App. 4th 88 6: This case addresses"standing" or who ha s the abil i ty to cha llenge a zoning restriction.

There are seve ral published op inions regarding me dical marijuana that remain good lawwhi le the Suprem e Co urt isconsidering review of these cases. In addit ion, AB1300adopted in January, 20i I c ladfies that:Nothing .in this article shall prevent a city or other loca governing bodyfrom ad opting and en forcing any of the fol lowing: (a) Adopting localordinances tha t regulate the location, operation, or establishment Of ame dical marijuana co opera tive or collective. (b) The civi l and cd minalenforcem ent of local ordinances de scribed in subdivision (a). (c)Efiactingother laws consistent with this article.

Thus, even thoug h the case S are pe ndi[~g review, Counc il does h ave the a bili ty to takeaction..Obviously, the scope of the issues for the Supreme Courts considerationpresents a significant ch allenge in ad opting fur[her legislation in the interim.

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HONORABLE MAYOR AND CITY COUNCILJanuary 31, 2012Subject: Legal Update on Medical Marijuana~Page 10

E. San Joses Alternatives in Ligh t of Referendum.Council must take action on the R egulatory Ordinance in response to the Petit ion for Referend um. I t may ei ther repeal the R egulatory Ordinance or send i t to the voters foeapproval, tf Council acts to repeatlthe R egulatory Ordinance o r the ordinance issubmitted to the voters andthe voters do n ot approve i t , the Co unci l cannot enact thesame ordinances for one year.A case cal led Mart in v. Smith states, [t[he Council may, however, deal further with thesubject matter of the suspended ordinance, by ena cting an ordinance essentiallydifferent from the ordinance protested against, avoiding, perhaps, the objections madeto the .first ord~nan . Another case, Rubalcava v. M art inez, explains:

"The determination whe ther subseque nt legislation is essentially the sam ebegins v~th a co mparison of the terms ofthe legislat ion chal lenged byreferendum and the subseque nt legislation, focusing on the features thatgave d se to po pular object ion." (Citat ion) W e m ay co nsult the reco rd as awhole to identr[y the "popular" objections to the .... ordinance,The court looks to determine whether ordinances ale essentially different andwhethe r or not they were en acted "not in bad fai th, and no t with the intent toevade" the r.eferendum petition,Therefore, Council has the fo owing options:1. Submit the .Regulatory Ordinance to th~ Voters..Counci l could place the R egulatory Ordinance o n the ba l lot for the voters. If the votersrepeal the Re gulatory Ordinance, Council has the same ab ili ty to adopt an ordinancethat is "essential ly" d~ferent than the on e that.was repea led. Even i f the Reg ulatoryOrdinance were approved bythe voters, however, the uncertain- legal cl ima te mayrequire that i t be amend ed de pending on the California Sup~-eme Courts rul ings.The Co untys Registrar of Voters estimates the Co st of the first citywide ballot measureon the June 2012 election to be $607,000.00 and the cost of each subsequent measureto be $401,000.00.2. Repeal the Regulatory Ordinance.Counci i could repeal the R egulatory Ordinance.and continue with e nforcement of thosecollectives creating a nuisance or that violate state law withou t adopting a formal ban.W hether or not an e xpress ban is permitted W ill ult imately be decided b y the CaliforniaSupreme Court. As we have .stated previously, the San Jose M unicipal Code currently

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HONORABLE M AYOR AND CtTY COUNCILJanuary.31, 2012Subject: Legal update on Medical MarijuanaP a g e 1 1

prohibits a person from maintaining property as a nuisance~ Nu isance is defined as anyviolat ion of federal law. Thus, m edical ma ri juana col lect ives are in violat ion of federallaw and subject to aba tement under the Municipal Code, including the zoningordinance.Enforcem ent priorities have focus ed on the co llective ope rations that result in a publicnuisance a nd those operat ing in violat ion Of state law. This should rem ain the pr ior i typending dec ision by the California Suprem e Court.3. Repe al the Re gulatoryOrdinance and Create an Aff irmative Defense forIndividuals.The S&n Jose M unicipal Code provides that property which has been Used orma intained in violat ion of federal law is a nuisance w hi6h m ay be a bated by the City. Toaddress the .nee ds of patie6ts wh o nee d to cult ivate med ical mari juana, the City couldcreate an affirmative defense.to Mun icipal Code enforcem ent l imited to individualpatients who grow m ari juana for their own m edical use or those pa tients andlor theirpdm ary caregiv.ers who asso ciate for Collective Cultivation on their own prem ises. TheRe gulatory Ordinance recog nizes associations of three or less such individuals, who .col lect ively cult ivate on their own prope rty for their own m edical use, provided that thecult ivat ion remains incidental to the residential use of the properly. (SJMC 6.88 .900.) .4. Repeal the. Regulatory Ordinance and Reinstate the Zoning Ordinance.The Zo ning Ordinance wa s not subject to the referendum . Therefore, the .suspensioncan be terminated an d the Zoning Ordinance cou ld be reinstated without the RegulatoryOrdinanc e. Although this wou ld place location restrictions on the collective operations, itwould do so without any regulatory protection. The Zoning Ordinance also limits thenumber of collectives to ten. This alternativewould probably increase the number ofcollectives and resu lt in an increased need for staff. The Zo ning Ordinan .c~ is clear thatno co llective is "permitted" or allowed to o perate, to avoid bo th federal preem ptionargument as well as any claireof entitlement, should a ban be subsequently pursued if.the California Suprem e Court holds that a local jurisdiction canno t regulate theoperat ions.5. Repeal the Regulatory Ordinance and Adoptan Ordinance that is Essentially

i. Different addressing Collectives.Adopting an esse ntially different ordinance, presents the cha llenges no ted in AG Ha rrisletters. The R egulatory Ordinance attempts a d el icate ba lance in this regu.latoryvacuum . The protests to the R egulatory Ordin. ance focused o n two issues: (1) thenumber of collectives; (2) on-site cultivation.

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HONORABLE M AYOR AND CITY COUNCILJanuary 31, 20~2Subject: Legal Update or~ Medical MarijuanaPage 13

Attorney Gen erals inabil i ty to proVide further guidanc e, on the scope o f legal collectiveoperations.. Moreover, the California Supreme Courts decision to address four casesinvolving medical marijuana collectives presents future challenges. We are optimisticthat the ne xt yearwil l bring clarity in this important a rea of law for bo th patients andlocal public entities.

RICHARD. DOYLE

cc: Debra FigoneCOLLEEN WINCHESTE .R "Sr. Deputy City Attorney

For que stions please con tact COLLEEN W INCHESTER , Sr. Deputy City Attorney, at(408) 535-1946

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1 look forward ~o w orkin~ with you on these issues going forw~d. Pleaseto contact my office ffyo.u have i ues tions or concerns.Sincerely,

not hesitate

KAMALA D . HARRISAttorney General


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ST TE OF C AL I FOR NI AOFFICE OF ;r im ATT ORN EY Gt~NERA L

Decem ber 21, 20ti

The Honorable Darrell SteinbergPresident Pro-TemporeState Capitot, Room 205Sacramento, CA 95 814The Honorable Ji~hn A. YerezSpeaker of the AssemStyState CapitolP.O. Box 942849Sacramento, CA 9 424940046

Re: M edical Ma rij .uana Le gislationDear P resident Pro-Tempore Steinberg and Speaker Perez:

As the states chief law enforcement official, am troubled by the exploitation.of.Ca lifornias medicat ma rijuana law s by gm ags, criminal enterprises and others, My O fficerecently concluded a long s eries o.f m eetings with representatives across the state from lawenforcement, cities, counties, and the patient and civil rights comm unities. The prim ary purposeof the meetings was to assess w hether we could clarify the medical ma rijuana g uidelines that mypredecesso~ published in 2008 in order to stop the.abuses. These conversations, and the recentunilateral federal enforcement actii)ns, reaffirmed that the facts today are far m i3re com plicatedthan wa s the case in 2008. I have com e to recognize that non-binding guidelines wilt not solveour problem s-state taw itself needs to 5e reformed,,sim plified, and improved to betterexplainto law enforcement and pa tients alike how ,.when, and w here individuals m ay cultivate and ..obtain physician-recomm ended m arijuana. In short, it is time for real solutions, not half-measures

I am writing to identify som e m asettled qu estions of law and policy in the areas ofcultivation and distribution of physician-rec0mm ended m arijuana that [ believe are suitable forlegislative treatment Before I get into the subs tance; howeve% I want to. kigtfllght two im portantlegal boundaries to keep in mind when drafting legislation.

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D e c e m b e r 2 1 2 0 1 1P a g e 2

First, the o u r t f AppeaI f o r the Second Appellate District recently ruled in Packv.Su~erior Court (20t ) 199 Cat.App .4th 1070 that state and local laws wN ch license the large-scale cultivation ~md mamffactum of marijuana stand as an obstacle to federal enforcementefforts and are therefore preempted bythe federal Controlled Substances A ct Although theparties involved in that case have sou ght review.o~the decision in the California Su preme C ourt,for now Jris binding law. As m entioned below, the decision in Pack m ay l imit the w ays inwhichthe S tate can regulate d ispensaries and related activities.

Second, because the Comp assionate Use A ct (Proposition 215}w as. adopted as aninitiative statute, lggislative efforts to add ress som e oft_he iss6es sa rroundingm edical m arijuanam ightbe limited by article II, section 10(c) of the Qonstita~ion, which g enerally prohibi~ theLegislature from a m ending initiati)es, o.r changing their scope oY effect, without voter approval.In s~m pte terms,, this means that the core right of qualified patients to cultivate and possess.marijuana c~m not be abridged. But, as Iong as new laws d o not "undo what the people havedone" through Proposition 215, w e believe that the. Legislature remains free to address, manyissues, inpluding d ispensaxies, collective cu ltivation, zoning, and other issues of concern to cities"and (otmties marelated to the core fights created in the Compassionate U se Act

W ith this contex~ the following are significant issues that I belieye )eqttize clarification instatute in order to provide certainty in the law :I)Defining the contom:s of the riftto collective and cooperativeSection 11362.775of the H ealth and Sa fety Code recognized a group cu ltivation fightand is ~he source of what have come to be known as "dispensafi. "es." .It provides; in. full:Qualified patients, persons with valid identification cards, a~d thedesignated primary c aregivers of qnalified pa ti.ents andpersons w ithidentification cards, wh o associate w ithin the State of Ca lifornia in or.dercollectively or cooperatively.to du tfivate m bxijuana for m edical purposes~shall not soM y on the basis of .tl?at fact be subject to state criminalsanctions under Section 1135 7, 1 358, 1135 9, 11360, 11366, 1 t366.5, or11570.

There are significant maresolved l gal qu estions regarding the meaning of this statute. Strictconstructionists argue that the plain wording of the law only provides imm unity to prosecutionfor those w ho "a ssociate" in order to % olleefively or cooperatively.., cultivate" m arijvana, a ndthat any interpretation und er which g roup m em bers are not involved in physical cu ltivation is toobroad. Others read section 1t362.77 5 expa nsively to pemait large-scale cultivation..andtransportalion of marijuana, memberships in multiple collectives, and the sale of marijuanathrough dispensaries. These d ivergent viewpoints, higtRight the statutes am biguity. Without asubstantiate change to existing taw , these irreconcilable Nterpretations of the law , and the .resulting uncertainty for law enforcem ent and seriously if patients, will persist. By articulatingthe scope of the collective and cooperative cultivation fight, the L egislature vfi]I.help lawenforcement and others ~nsu~e lawful, consistent and safe access lo medical ma rijuana.


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(2) DispensariesThe term "d ispensary" is not found in Proposition 215 and is not defined in the MedicalM arijuana Program Act. It generally refers to any group that is "dispensing," or distrib~thxg~med ical marijuana grow n by one or more of its m embers to other mem bers of~e enterprisethrough a com mercial storefront,M any ~eity, county, and law enforcem ent leaders have told us they are concerned about" the proliferation of dispensaries, both storefront and m obile, and the impa ct they can hav e on public safety and quality of life. Rather than confront these difficult issues, many cities areopthag to simp ly ban d ispensaries,.whid} ~ has obvioos i~npacts oa the availability of m edicin~ to

patients in those communities. Here, the Legislature could weigh in witk rules about hours,locati0ns audits, security, employee backg round checks, zoning, comp ensation, and w hethersales of marijuana are permissible.As noted, how ev.er, the _ a c k decision .suggests that ffthe State g oes too far in regutathagmed ical.marijuana enterprises (by perm ittingthem,, requiring Iicense or registration fees, orcallhag for mandatory testing of marijuana), the law might be preempted by the ControlledSubs tances Act. W e also cannot predict how the federal goverranent will react to legislation)eguiathag (and thus allowing) l~rge scale m edical m arijuana cultivafion and .distribution.How ever, the California-based United States Attorneys have stated (paraphrase C ole mem o. re:hands off approach to those clearly complying w ith relevant state med ical marijuana law s)..3)Non-Profit OperationNothing in Proposition 215 or the M edical Marijuana Program Act authorizes an3i individual or grou p to cultivate or distribute ma rijuana for profit. Thu s, distribution and s ales forprofit of m arijaana -.med ical or otherwise- are criminal und er California law . It wo uldb ehelpful-if the Legislature could clarify wh at it means for a c olledtive .or coop~ative to operate asa "non-p~ofitYThe issues here are ~Iefining the term "profit" and determining w hat costs are reas0nablefor a collective or cooperative to incur. This is linked to the issue of W hat com pensatio~ paid bya collective or cooperative to mem bers who perform work for the en~erprisd is reasonable.. 4) Edible medical mariiuana productsM any m edicaI m arijuana-collectives, cooperatives, and d ispensaries offer fqod proctuc~sto their mem bers that contain marijuana or m arijhana derivatives such as ca nnabis oils or THC . These edible cm mab is products, which Jaciude cookies, brownies, butter, candy, ice cream, andcN?eakes,.are not monitored or teguiated by state and local health authorities like commercially-distributed food products or p} tarmaeeutieals, nor can they be g iveh their drug content.Likewise, there presently are no standards for THC dosage in edible products.


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. Cm mercial enterprises that manu facture and distribute marijua~ edibles and candy donot fit any recognized m odel of collective or cooperative cultivation and und er cmrrent law m ayb~ engaged in Ne illegal sale~md distribution of marijuana, Clarity must be brought to the law inorder to protec; tlae heal~ and safe~ of patients who presently catmot be sure w hether the~dibles they are consum ing were manufactoxed in a safe maim er.I hope that the foregoing sngges iions a~e helpful to yogi in crafting egislation. Californialaw p laces a prem ium on patients rights to access m arijuana for m edical M e. In any legislativeaction that is taken, the voters decision to allow ph ysicians to recomm end m arijuana to treatseriously ill individuals must be respitedPlease donot hesitaie to contact me jfyou h ave questions or concerns.

Sinewed,

KAMALA D. HARRISAttorney General

cc: The ttonorable Mark Le~oThe Honorable Tom Amm iano

Date post:	04-Jun-2018
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San Jose Dispensary Regulations - Repeal

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