Bloomberg News

California City Can’t Use Local Law to Block Marijuana Sales, Court Rules

March 01, 2012

The city of Lake Forest, California, can’t use its municipal nuisance statute to ban medical marijuana dispensaries when they are allowed to operate under state law, a state appeals court said.

The California appellate court for Orange County ruled yesterday that local governments can’t prohibit dispensaries altogether insofar as the state legislature allows them where medical marijuana is “collectively or cooperatively cultivated.”

“Under the city’s ban, a medical marijuana dispensary always constitutes a nuisance, though the legislature has concluded otherwise,” a unanimous three-judge panel said. “Because the city’s ban directly contradicts state law, it is preempted and furnishes no valid basis for a preliminary injunction in the city’s favor.”

A lower court had agreed with the city that its decision not to recognize dispensaries as permitted property use, and its prohibition against unpermitted uses, established a complete ban against them. The court ordered Evergreen Holistic Collective to close. The appeals court blocked the order while it considered the dispensary’s arguments.

Small Office

Jeffrey Dunn, a lawyer for Lake Forest, said that he didn’t know whether Evergreen was growing its own marijuana. The dispensary operated out of a small office suite in a strip mall, which made it unlikely that it could grow sufficient marijuana for its many customers, he said in a telephone interview.

The dispensary was closed by the federal government last year with the other remaining ones in Lake Forest, as part of a state-wide crackdown on commercial distribution of medical marijuana through storefront outlets, Dunn said.

California was the first state to permit marijuana consumption for medical purposes when voters approved a 1996 ballot measure. The dispensaries generate sales of as much as $1.3 billion a year and sales taxes of as much as $105 million annually, according to the Board of Equalization, the state’s tax administrator.

The case is City of Lake Forest v. Evergreen Holistic Collective, G043909, California Court of Appeal, Fourth Appellate District, Division Three (Orange County).

To contact the reporter on this story: Edvard Pettersson in Los Angeles at epettersson@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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