Court dismisses legal challenge for California’s statewide cannabis delivery policy

https://abovethelaw.com/2018/03/cashed-and-counting-california-starts-crackdown-on-gray-marijuana-marketplace/

Bethan Rose Jenkins, Cannabis News Writer/Editorial

A California judge has dismissed a legal argument contesting a controversial cannabis policy that was effectuated two years ago. The ruling, which was issued on Wednesday, November 18, saw Fresno County Superior Court Judge Rosemary McGuire side with the California Bureau of Cannabis Control (BCC) — the Bureau released rules in 2018 confirming that cannabis delivery could take place anywhere in the state.

California, which boasts the largest legal weed industry on the planet, imposes specific bans on the industry. When statewide delivery policies were initially set, a total of 25 governments sued the BCC; they argued that their right of home rule to regulate cannabis businesses within state borders had been violated. Nonetheless, Judge McGuire affirms that cannabis delivery services are not in conflict with state law. 

“The regulation states what the BCC, for its purposes, permits,” McGuire wrote in her ruling. “It commands or prohibits nothing of the cities, and therefore is not necessarily in conflict with state law, pursuant to which plaintiffs contend they retain authority to regulate and/or ban cannabis delivery within their jurisdictions. The court finds that this matter is not ripe for adjudication, and dismisses the action as to all plaintiffs.”

The Wednesday ruling succeeded a Monday hearing and is sure to be well-received by cannabis business owners in California. Had the delivery policy been rescinded, consumers would have been limited in terms of obtaining cannabis products; the majority of California’s cities and counties have outlawed cannabis commerce services. 

However, there is still a chance that the case could be appealed in the Supreme Court.

California judge rules against BCC’s billboard ads on interstate highways

The BCC may have got its way with cannabis delivery in California, but the Bureau was not successful in a recent court case regarding billboard ads. On Friday, November 20, San Luis Obispo County Superior Court Judge Ginger E. Garrett slammed the BCC for disobeying state laws, after the Bureau allegedly advertised cannabis products on hundreds of billboards that were sprinkled around California’s busy highways.

As per the terms of a 2016 initiative that legalized recreational cannabis in California, billboard advertisements are banned. Nonetheless, the BCC went against the rules by adopting its own regulation permitting cannabis companies to advertise along freeways. Judge Garrett maintains that director of the BCC Lori Ajax, in addition to other Bureau officials, “exceeded their authority in promulgating the advertisement placement regulation.”

“The bureau determined that a 15-mile radius was a necessary and appropriate distance from the California border because it satisfies the intent of [the statute], while assuring that bureau licensees have an opportunity to advertise and market along Interstate and State Highways if they satisfy the identified radius limitations,” state officials affirmed in court papers. 

A San Luis Obispo construction contractor named Matthew Farmer filed the lawsuit. His attorney Saro Rizzo proclaims that California’s recreational cannabis law thrusts a ban on billboards being displayed along state highways that cross state borders, as well as 4,315 miles of interstate highways; inclusive of I-5 and I-80.

“We are still reviewing the ruling, and it remains to be seen what the next steps will be,” said a BCC spokesman who goes by the name of Alex Traverso. It is uncertain as to whether or not the ruling will be appealed.

California’s cannabis industry welcomes spike in tax revenue

In spite of the uncertainties that have emerged regarding statewide delivery policies and billboard advertising for California’s cannabis industry, some good news has been confirmed by the California Department of Tax and Fee Administration (CDTFA) — on Monday, November 23, impressive third-quarter numbers were published. 

Based on the CDTFA’s figures, cannabis tax revenue climbed by almost 80 percent in comparison with Q3 data from last year, when revenue rested at $170.7 million. During Q3 2020, California raked in $306.7 million; this total constituted an excise tax of $159.8 million, a sales tax of $105.9 million and a cultivation tax of $41 million.

Rewind back to Q2 2020 and California’s cannabis tax revenue totaled $260.2 million; this amount constituted an excise tax of $135 million, a sales tax of $94.5 million and a cultivation tax of $30.7 million. Comparatively, these figures demonstrated a 52 percent increase since Q2 2019, when the state generated $156.8 million in cannabis tax revenue.