California Recreational Cannabis Tax: Model Options and Other Considerations

California does not need to re-invent the wheel when it comes to creating an effective taxation scheme for recreational cannabis. It has plenty of experience to draw from its vast history of taxing some of the nation’s largest industries. Bethany Brass and Keri Gross, students at Santa Clara University School of Law, wrote a paper that reviews the tax schemes utilized in other CA industries, and those of recreational cannabis markets in other states. It analyzes how some aspects of those models can complement a legal cannabis market in California. Overall, the paper is an effort to express taxation options that aim to drive public policy and can transition cannabis from the black market.

Here’s the link to the paper:

CA Cannabis Tax Options_Written By_B.Brass & K.Gross

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SB-643 and the Price of Tuna

Legislators and voters are faced with many questions when it comes to legalizing adult recreational use of marijuana, one of which is how such laws or initiatives will impact the California environment and wildlife. Some reports show that Humboldt and Mendocino Counties have experienced a dramatic increase in deforestation, stream diversion, and harm to wildlife since the passing of the Compassionate Care Act. However, the same studies cited in support of those claims found that the greatest negative environmental impact was from “trespass” grows on federal land. Enforcement of the existing regulations has been spotty, in part because of the questionable legal status of marijuana on the state level from the Compassionate Care Act, as well as the federal level with the Cole Memo.

However, this questionable legal status would in large part be resolved by legalizing adult recreational-use marijuana. With federal enforcement goals as laid out in the Cole Memo, state legalization could shift enforcement to addressing trespass grows rather than busting up dispensaries. Out of fear that the next wave of legalization will have further negative impact on the Golden State’s already fragile environment, one Senator has proposed SB-643, a bill that would provide greater environmental protection and agency oversight into the existing medical marijuana legal framework. SB-643 is broken into several parts; part one would establish a bureau within the Department of Consumer Affairs to manage the regulation and licensing of existing and future dispensaries, which would also manage the appropriation of fees for the purpose of funding environmental protections enforcement, and the violation of which would result in fines up to $35,000; part two would crack down on the current medical practice of prescribing marijuana without proper examination, violation of which would result in criminal prosecution and fines; part three opens the door to local taxation of all levels of the marijuana supply chain; part four criminalizes possession for all non-patients or caregivers, and offers a meager exemption from prosecution those licensed to dispense or cultivate; part five imposes additional taxes to all levels on behalf of the state. Each of these parts creates a new statutory requirement needing additional enforcement. The bill addresses the additional cost to the state and local enforcement agencies by collecting licensing fees, taxes, and fines to fund the enforcement of the provisions.

While at present there are no environmental protections for marijuana cultivation, there are existing regulations that could be applied against those doing the greatest environmental harm. Additionally, we must consider fully any legislation that would re-criminalize possession, as we hardly need to reinstitute drug crimes in a state suffering from severe prison overcrowding, a point which I unfortunately won’t have time to delve into more deeply. What I will ask is whether additional legislation is really necessary? Could market forces or additional enforcement solve the environmental concerns specific to California? Can enforcement costs be passed off to the consumer, rather than paid for on the backs of simple possessors, cultivators and physicians?

To answer these questions it is necessary to review the regulations that are either not currently being enforced, or that, in some cases, cannot be enforced. While the Compassionate Care Act left much of the creation of legal frameworks and the process of enforcement to local county and municipal agencies, it is also true that there are federal and state criminal statutes that could be applied to the marijuana activities that are most harmful to the environment. A great example would be what are known as “trespass grows;” grows taking place on public or private lands without permission from the owner or right to enter.

Because public lands are open to entry by the public, federal agencies are unlikely to pursue action under criminal trespass. In cases where the land falls under federal jurisdiction (think National Parks) the federal penalties for cultivating marijuana are anywhere from five years to life and carry fines as high as a million dollars. Additionally, enforcement of these penalties is one of the eight priorities provided in the Cole Memo, and therefore the legal status of marijuana in the state should not be an issue where the grow is occurring on federal land. With full enforcement under the Cole Memo from the federal side, a large part of the environmental hazards currently threatening California can be resolved.

But what about trespass grows not occurring on federal land? While the Compassionate Care Act (CCA) may have caused a boom in demand for the legal medicinal marijuana market, raising the need for additional supply, it does not in fact prevent enforcement by state agencies of trespass grows. This is true for two reasons; 1) the language of section (d) of the CCA exempts patients and their caregivers from Penal Code § 11358, but does not prevent section 11358 from applying to those not cultivating marijuana on behalf of patients, and 2) were the statutory construction of the CCA to obstruct such a charge from being raised against a trespass grower, the California penal code provides charges that could be brought for the action of trespassing. For example, if California Fish and Wildlife agents were to discover a trespass grow site on California state public lands they could arrest the growers for either a violation of Penal Code § 11358 or for violating Penal Code § 602(p) which prevents the “entering upon any lands declared closed to entry as provided in Section 4256 of the Public Resources Code, if the closed areas shall have been posted with notices declaring the closure, at intervals not greater than one mile along the exterior boundaries or along roads and trails passing through the lands.”

Where does this leave private California landowners who discover an illegal grow on their property? There are two possible avenues to seek legal redress; 1) call the local police or sheriff and report the trespassers as violating Penal Code § 602(l) or (o), or 2) file against the trespassers under the California Civil Code. The second route could be the more dangerous of the two because, in the past, trespass growers have been known to carry arms, which could pose a physical threat of injury, not to mention the financial burden of hiring an attorney. However, the California Code of Civil Procedure allows for the recovery of attorney’s fees for successful trespass actions. While both solutions may not be sufficient to fully protect private landowners from the harm of trespass grows, the truth is that trespass grows on private land are not the primary cause of the environmental harm that is being done.

It’s not clear whether there would be additional action available to private landowners seeking to prevent trespass grows on their land under SB-643. However, for those private landowners who choose to cultivate marijuana on their property, the bill may limit their ability to do so; it had previously included an outright ban on cultivation in areas zoned as residential. This is still reflected in the digest of the bill, leaving open the option to reinstitute the ban. Furthermore, failure to receive a license and pay the associated taxes would be grounds for criminal prosecution or fines in the five digit range. The suggested licensing system, an infrastructure that will be overseen by a regulatory commission created by the bill, would limit which doctors are able to “prescribe” marijuana and also collect associated fees in order to fund enforcement of the regulatory system.

Given that the regulators of the license system would be getting a paycheck as a result of the sale of marijuana this leads to concerns about a possible direct preemption on the part of the California state government, which I won’t go into here. But what works about the bill is that it provides funding to the agencies who will be enforcing the existing regulations and prohibitions. Of all the hurdles facing the Golden State’s environment, funding for enforcement has to be at the top of the list.

But perhaps there’s an alternative method of enforcement for marijuana cultivation? One that wouldn’t require additional funding or new laws. For some products, market regulation is sufficient to prevent environmental harms. When we buy tuna and it says “dolphin-safe” or when we prefer “Non-GMO” ingredients, we are in effect regulating the market and acting as enforcement agencies against the harms we wish to prohibit. While the cost of being monitored and awarded such labels is passed on to the consumer, we are happy to pay ten cents more for tuna we can feel good about. And while there are some consumers who don’t have the luxury of spending an extra ten cents on tuna, the majority of consumers who do influence the market have done so to such an extent that “dolphin-safe” tuna has become the norm rather than a luxury item.

Applying this model to marijuana would require the formation of some regulatory group, but that does not necessitate that the group be a government entity. For example in the area of organic food, there co-exists the U.S. Department of Agriculture (USDA), California Certified Organic Farmers (CCOF) and Oregon Tilth regulatory groups for the receipt of organic certification. Only the USDA is a government regulatory group, whereas CCOF is a trade association and Oregon Tilth is a non-profit entity. Similarly, California Cannabis Voice Humboldt is working to create a non-governmental trade association for addressing the legalization of adult recreational-use marijuana. What if, rather than passing additional regulations and creating more state agencies, non-profit and trade associations were formed for the purpose of certifying and monitoring marijuana grow practices? The result would be market enforcement of what the consumer values rather than placing strict limitations on the California medical marijuana industry, and a “green” marijuana certification process that is not a restatement of the fines and prohibitions of the past.

In my next post I will delve into the particular challenges faced by a drought-ridden California considering legalization of adult recreational-use marijuana, and propose possible solutions to the dilemmas presented.

San Jose’s Last Stand

The fate of medical marijuana in San Jose hangs in the balance, and it is time to make an informed decision. A certain degree of regulation is necessary to ensure a functioning decriminalized market for any goods, including medical marijuana. While under-regulation breeds social harms like crime, over-regulation also has a detrimental effect on lawful enterprise. With 89 dispensaries operating within its city limits, San Jose needs to be able to effectively regulate the medical cannabis industry. San Jose’s newest ordinance, No. 29420, however, overregulates land use issues to the point of extinguishing the medical cannabis industry, thereby denying safe access to its sick residents and denying the city a potentially significant source of income. Land use for medical marijuana in San Jose can be more effectively regulated by enforcing legislative intent, making more gradual carveouts, and keeping the problems that come with cultivation sites separate from retail medical cannabis dispensary locations. Additionally, despite the ordinance’s emphasis on revising land use provisions, San Jose’s answer to effective medical marijuana regulation may not be contained in land use at all.

San Jose Should Enforce Legislative Intent Over the Letter of the Law.

Per se regulations should not be strictly enforced when they betray the legislative intent. The distance requirements contained in the new ordinance were created as buffer zones to sensitive areas. Thus, individualized distances for are set for distinct sensitive areas (1,000 feet from parks and schools, 500 feet from rehabilitation centers, and so on). While these distances provide a quick rule of thumb for attempting compliance and enforcement, the city of San Jose should exercise greater discretion in enforcing the letter of the law.

Santa Cruz’s “intensity” approach to distance requirements is a great example of a municipality effectively exercising its discretion. Rather than strictly adopting the state’s per se distance rule of 1000 feet from sensitive areas, Santa Cruz only asks its dispensaries whether their intensity of use is compatible with nearby residents if located within fifty feet of a residence. While Santa Cruz permitted only two dispensaries, fourteen others made the requisite showing of compatibility with nearby residents allowing them to be immunized. This was a rather clever way of Santa Cruz to establish regulations that will maintain the public wellbeing, but also made the regulations feasible enough to encourage compliance.

As I mentioned in my original article on San Jose, the city is strictly enforcing the per se 1000 foot distance provision. The purpose of this provision is to act as a buffer zone between something like cannabis and sensitive areas like where children or recovering addicts may be expected to be found. By strictly enforcing the 1000 foot buffer, San Jose will be shutting down dispensaries that are within a nearly impassable 1000 feet, or are within 1000 feet of places where children might be expected to be found, but in reality are not. In both cases, strictly enforcing the distance provision will not achieve what the provision was designed to. By adopting a provision or degree of enforcement that could reasonably assess the potential for harm in each situation, San Jose might find itself enjoying the similar results of dispensary compliance.

Gradual Zoning Carveouts Maximize Public and Municipal Welfare

San Jose can maximize public welfare, safe access, and municipal income by engaging in a more gradual zoning carveout. The new ordinance rezones dispensaries such that they will only be allowed to operate in a warehouse district in the south eastern corner of San Jose. Dispensary owners have expressed concern over this extreme zoning restriction due to the unrealistic volume of business that would be required to operate in retail spaces of 20,000+ feet, especially once rents are driven up by the monopolistic hold these land owners have on dispensaries. Rather than enacting zoning restrictions that fall just short of an explicit moratorium, San Jose can benefit from experimenting with more gradual carveouts.

Clark County in Washington was a great case study of a municipality that experimented with its zoning carveouts for regulating medical cannabis. The Washington and California statutes and initiatives closely mimic each other. Both Initiative 502 and Proposition 215 gave the citizens of each state the right to use cannabis in a decriminalized setting (albeit recreational in Washington and medicinal in California). Sections 69.51A.140 and 69.51A.200 in Washington were analogous to the ruling seen in City of Riverside v. Inland Empires as both give local control for municipalities to choose the extent to which they would follow the newfound freedom in each state’s respective initiatives that decriminalize cannabis. Washington had a very specific subset of commercial and industrial zones in which cannabis dispensaries could be located. Clark County used the default regulations handed to it for two years before making adjustments that best suited the needs of their community.

When Clark County made these changes with a new amendment, the land use aspects they changed pertained to cultivation. Section 6.88.430(E) of San Jose’s new ordinance also changes zoning in regards to cultivation by requiring that cannabis sold at dispensaries be vertically integrated and produced by the owners of the dispensary itself. Juxtaposing the Clark County model with San Jose’s suggests that San Jose’s new ordinance is excessively restrictive. Were San Jose to attempt a more gradual zoning carveout as seen in the Clark County model, it might be able to maintain public welfare by simply adjusting its zoning restrictions in regards to cultivation and allow the city’s dispensaries to continue to operate and provide tax revenue for the city.

Requiring Vertical Integration of Cultivation With Retail Dispensaries Breeds More Transgression Than Compliance

Requiring vertical integration of cultivation with dispensaries mistakenly groups land used for cultivation with land used for retail medical dispensaries. Additionally, restrictions on land used for cultivation are often met with transgression. Vertically integrating cultivation with retail sales will unnecessarily result in retail medical dispensary non-compliance. Santa Cruz also has made modifications to reduce land use as applied to cultivation. Like Clark County, Santa Cruz found after years of its legal experiment that “the creation of rules contains an inherent assumption that people will follow them. Our experience has been to the contrary when it comes to cannabis cultivation.” Requiring cultivation to be vertically integrated places more restrictions on using land for cultivation. By imposing these greater restrictions, San Jose can expect a comparable result to what its neighbor Santa Cruz experienced; transgression rather than compliance.

Rezoning Might Not Be The Answer

There are more effective ways to achieve public welfare through regulation than rezoning medical cannabis dispensaries and cultivation sites. Ordinance No. 29421, amending Title 6 of the San Jose municipal code, sets out a multitude of other regulatory provisions separate from zoning requirements. From the dispensary owners I spoke with, this list of provisions is already proving problematic. Nevertheless, the majority of the provisions can realistically be achieved through diligence. Both the city of San Jose and dispensary owners could greatly benefit by focusing on these more effective, achievable provisions, and scaling back on unachievable land use provisions whose ability to ameliorate the public welfare is limited at best.

Oakland has been on the progressive side by consistently being at the forefront of passing regulations for medical cannabis and has focused more on regulatory provisions unrelated to land use. It had the wherewithal to see the gaps in Proposition 215. In 1998, only two years after Proposition 215 passed, and six years before the state would pass SB 420, Oakland passed an ordinance to establish a committee to regulate medical cannabis locally and added a chapter to the municipal code for medical marijuana. When the number of dispensaries grew large enough to earn Oakland the nickname of “Oaksterdam” in the early 2000s, the city passed a new ordinance that established a permitting system. Soon after that, Oakland would go on to pass Measure Z, largely affecting medical cannabis taxation. The interesting part about tracing Oakland’s regulatory development for medical cannabis is the lack of land use provisions it enacted. Oakland finally enacted a broad zoning and 600 foot distance requirement, but otherwise has enacted regulations for taxes, permitting, and enforcement as avenues for achieving public health and safety.

This provides a potentially valuable lesson for San Jose. While both seem to agree that there needs to be some sort of distance between cannabis and sensitive areas, Oakland is significantly less restrictive in its zoning. While taking Oakland’s approach might not make San Jose the next Amsterdam, it does suggest that there are other avenues by which it could regulate its medical cannabis industry without hurting a great source of income for the city.

Conclusion

I do not doubt the need for structure and regulation in a newly decriminalized market like cannabis. Even with some desperate need to enact new, more restrictive regulations like other municipalities, there are degrees and routes of regulation that maximize the public welfare better than others. Sometimes it is important to focus on the spirit of the law when enforcing its letter will betray its intention. Strict enforcement of distance requirements may not actually be preventing social harm, but actively harms a local industry. Sweeping zoning provisions that monopolize real estate and groups dispensary locations and cultivation sites with known compliance problems creates a proverbial scorched earth policy where the city and its sick residents could otherwise reap the fruits of the medical marijuana industry. What if Napa had rezoned its vineyards to unworkable land? It would not be the world class destination that it is today. Like Napa, San Jose should take measures to safely embrace this new industry rather than shun it by rezoning it to untenable corners of the city.

What About the Children Who Grow Up?

Occasionally, I’ve been asked why I chose to focus on children as my topic for Drug Law and Policy Blog. For many who knew me prior to law school, my interest in juvenile issues came as somewhat of a surprise. If you had asked me even two years ago what kind of law interested me, criminal juvenile issues would have been a) far too specific for my overwhelmed first-year brain to handle and b) not even in the realm of possibility. I’m just not a person who has ever enjoyed hanging out with kids. My motivation for choosing to focus on juvenile issues for Drug Law and Policy therefore came from a place of curiosity, not an already known passion. Over the course of the semester, both through writing for this blog and working extensively with youth in juvenile hall, the meaning behind my interest in juvenile law has shifted substantially. The two perspectives I have, the one I had when I began writing What About the Children and the one I established over the course of several articles, are in many ways very different, though I think each are equally relevant.

As I began writing, I believed that it was important to talk about the children because the effect of legal adult-use marijuana on children is one of the most common arguments used against legalization. I thought if I could shed some light on how much prohibition negatively impacts kids, then a lot of those counter arguments could be muted. My opinion at the time was that talking about the effects of legalization on children was only one way to discuss legalization. While that opinion hasn’t changed—surely we need to sort out taxes, how legal marijuana is going to be distributed and consumed, and what we mean when we talk about “legalization”—I’ve developed a more sincere belief that when we talk about any change in criminal law, we have to talk about the kids.

Talking about kids is important not because children are innocent or deserve special treatment but because children grow up. They grow into the adults that will live in the world tomorrow. I don’t mean this in a lovey-dovey, “the children are our future” sense, just that literally, the children of today will run the government—and populate the prisons—of tomorrow. So when laws or policies adversely affect children, or a specific group of children, that adverse affect carries on into our future.

Per labeling theory, as I discussed a couple installments ago, it then follows that children who are prosecuted for marijuana possession and see themselves as criminals, on the outside of normal society, are more likely to continue to see themselves that way into adulthood. This may mean those adults feel less obliged to follow whatever framework we instate for legal adult use, and instead function within the black market. It also means they may be more likely to function generally, not just in reference to the legal marijuana market, on the fringe of society, and be more likely to continue to be criminally involved.

Labeling theory creates enough of a propensity problem that we should consider changing how we address criminally involved youth. Yet there is another, compounding factor that needs to be discussed before we can fully grasp the vicious cycle of our criminal justice system. That factor is race. As I mentioned in my last article, we know suspensions and expulsions adversely affect students of color. For those of us living in the United States with an internet connection, it should come as no surprise that we also know the adult criminal justice system adversely affects people of color, both in incarceration numbers and treatment by police. Working in Santa Clara County, I have firsthand knowledge of how overrepresented Latinos are in the California criminal justice system. Yet when I began researching the numbers, I came into a bit of a problem. According to the statistics, Latinos are not egregiously over represented. By the numbers, Latinos make up 38% of Californians and 41% of incarcerated individuals—which is over representation, but nowhere near as egregious as the 6% to 27% Black Californians represent, respectively. Suspensions and expulsions were similarly only slightly disproportional when it came to Latinos.

So I tried going local with my research. Finally, I found this Santa Clara County Juvenile Justice System Annual Report, and things made sense. The report is very informative and I highly recommend reading through its entirety, but for summation purposes this table speaks volumes.

Screen Shot 2015-05-12 at 10.50.39 AM

Much like the statewide statistics I’d found earlier, the Santa Clara County statistics indicate a huge disparity between the Black population and arrest rate. However, the disparity between the Latino population and arrest rate is more impactful given the overall population. The above table, and the report at large, indicates that Latino youth in Santa Clara County are 3.7 times more likely to be arrested than their White counterparts. Arrest rate doesn’t necessarily represent prosecutions, or in the case of juveniles, petitions, but sociology and labeling theory tells us the damage is done when a youth is arrested. The mere fact that children of color are more likely to be arrested, regardless of whether their case ends up on some kind of permanent record, is cause for concern. Youth who are arrested are more likely to see themselves as outcasts and criminals, and are more likely to disregard laws. Combine this with the known bias of police officers to target people of color, and it is no wonder the United States has giant problem incarcerating people of color. Given the disproportionate arrest rates of Latino youth in some counties (table above), that problem will be growing in years to come, when arrested teenagers turn into incarcerated adults.

Labeling theory, and the ripple affect it has on children who grow up, is why I think every criminal law discussion needs to include the kids. The impact arrests alone have on children is why I think legalizing marijuana for adult use is such an important step towards reforming our criminal justice system. While adult-use marijuana (obviously) won’t legalize possession for children, it will allow marijuana crimes to simulate alcohol or tobacco crimes more. Underage drinking, while serious, does not often result in arrests. In fact, I could nary find a study, document, or statistic about underage drinking arrest rates. Instead, what are readily available are studies on the risk and damage of underage drinking, treating the issue like a mental health problem. Taking a mental health approach to substance use will have a net-helpful effect on our kids, without the damage caused by arrest and (juvenile) prosecution. Further, if California chooses to maintain its current framework for simple possession, requiring infractions rather than misdemeanors for possession of up to an ounce, arrests, and the harm that comes with arrests, are almost entirely avoided.[1]

For those of us drafting polices for legalizing adult-use marijuana, juvenile issues are likely not a priority. The nitty-gritty issues of licensing, land use, marijuana business, and DUI enforcement are complex enough and important enough to occupy a significant portion of time. But for those of us voting, and those of us who may hesitate to support legal adult-use marijuana due to the access it grants children, juvenile justice issues must be discussed. The criminal justice system has incredible power over all our youth, both those who have fallen under the jurisdiction of the system and those who live cautiously to avoid contact. It is important for us, as adults and voters, to ensure that the juvenile justice system does not do unnecessary damage to our children.

Clare McKendry for Drug Law and Policy – Follow us on Twitter @DrugLawPolicy

[1] In some jurisdictions, police officers are not required to issue uniform traffic or infraction tickets (New York is one), and may technically be allowed to take people into custody for infraction offenses (though it rarely happens). It’s further worth mentioning that if someone with a marijuana infraction fails to appear for a court date, a bench warrant will usually be issued, and the next time the person comes into contact with police they will be arrested.

The Oaksterdam Model

We have all heard of the laissez-faire marijuana laws that go on in Amsterdam, so adopting the moniker “Oaksterdam” only made sense when the city of Oakland became one of the most progressive places in California for medical marijuana regulation. Perhaps almost as notorious as Amsterdam is for its marijuana laws, Oakland is also known (amongst many other things) as a place with a high crime and murder rate. Given how active Oakland has been in regulating its medical cannabis industry in a place that is no stranger to attendant social harms, Oakland is an ideal case study in assessing the way land can be used to help achieve a municipality’s goals.

Oakland has perhaps the most extensive history with cannabis regulation in California since Proposition 215 passed at the end of 1996. In 1998, the city first attempted to fill the legal vacuum caused by the vagueness of Proposition 215. While referencing medical cannabis supporting legislation reaching as far back as March 1996, Ordinance No. 12076 established chapter 8.42 (now found under chapter 8.46) in the Oakland Municipal Code. This chapter would be Oakland’s first set of regulations that would apply interstitially to proposition 215. 12076 was enacted with the goal of making medical cannabis accessible to qualified patients in Oakland, to prevent diversion to illegal markets, and to ensure that cannabis users in Oakland would not face prosecution. The ordinance then set out to achieve these goals in some interesting ways. To ensure that people would not face prosecution for possessing medical cannabis under state law, the ordinance made cannabis possession the lowest priority for Oakland law enforcement. The ordinance also established a single agency to regulate the distribution of medical cannabis in Oakland. This agency was to implement the marijuana distribution plan the city set out in what is now chapter 8.46 of the municipal code. Perhaps not willing to take on the burden themselves, the city designated the Patient ID Center, known as the Oakland Cannabis Buyers Cooperative at the time, to administer the city’s distribution plan.

The Oakland Cannabis Buyers Cooperative (hereafter “OCBC”) was a dispensary whose mission statement sounds relatively typical. It wanted to provide safe access to cannabis to people with valid medical recommendations from their physicians. Like other dispensaries, the OCBC wanted to provide access to cannabis in a legal manner so as relieve people of the unintended ills of federal prohibition. They saw their legal channel of distribution as a way to help people avoid prosecution and the dangers of the black market. In line with its goals as a dispensary, OCBC took on the role of implementing the city of Oakland’s distribution plan. In line with its goal of ensuring that medical patients would not face prosecution for their medicine, OCBC would come to be in charge of an identification system that would allow for law enforcement to easily verify an individual’s patient status. As its current name, the Patient ID Center, would suggest, this system has proved to be largely successful. As can be evinced by changing their name from “Cannabis Buyers” to “Patient ID Center”, it was not long until this dispensary also became typical in not being able to provide safe access to medical cannabis.

Oakland presents a prime example of a municipality running into federal pre-emption conflicts. Soon after OCBC took charge of Oakland’s distribution plan, the federal government ordered a preliminary injunction that was eventually carried out in October of 1998. While police padlocked their doors and physically enforced the injunction, OCBC voluntarily cooperated after six days. Then, only eight days after that, the city of Oakland responded aggressively by invoking California Government code 8630 and declaring a public health emergency that would return power to provide access to medical cannabis to the city. Oakland’s struggle with the federal government would continue for years, with back and forth politics that touched on land use issues (like threatening land owners who leased their property to cannabis dispensaries with forfeiture). While I encourage my readers to look into the intense battle that has occurred between the federal and local governments, I raise what the federal government did next for purposes of showing the development of Oakland’s local regulation. I will continue to focus on the local land use regulatory issues the city of Oakland experienced throughout its medical cannabis social experiment.

Oakland took its next major step in medical cannabis regulation in 2004 by passing Ordinance number 12585, adding chapter 5.80 to the city’s municipal code. This chapter sets out a permitting system by which the city may award a medical cannabis dispensary the right to operate. While there are a multitude of provisions, it is interesting to note that there was only one provision regarding land use. The language of 5.80.020(d)(1) largely reflects the regulations that had already been set out in the then recently passed State Bill 420. This new chapter required dispensaries to be located at least 600 feet from sensitive areas like schools, parks, residential areas, among others, a looser regulation than the state’s requirement of a one-thousand-foot boundary. Also on the broader side are the zones in which this chapter allows dispensaries to be located. Whereas other municipalities specify different categories within which dispensaries may be located, this chapter of the Oakland municipal code simply requires that a dispensary be located within any type of industrial or commercial zone. This ordinance focused on regulating the cannabis industry through restricting the maximum number of dispensaries rather than rezoning.

Oakland residents also passed the landmark Measure Z in 2004. Measure Z primarily reemphasizes cannabis infractions as lowest priority, creates a committee to handle licensing and taxation, and establishes policies for enforcement. This monumental piece of legislation for Oakland does not make any changes to the broad ability for medical cannabis dispensaries to be licensed if they are, among other regulations, only located within a commercial and industrial zone. In noting this omission, I draw on a larger point. Many municipalities have similar, if not the same, goals of things like public health and safety. The city of Oakland has at least as many issues in these departments as any other municipalities, and yet it is interesting to note the way in which it approaches its solutions. Rather than adjusting relatively broad zoning and land use provisions, the city of Oakland looks to taxation, methods of licensing, and policies for enforcement to maximize the well-being of its residents who are now living with this new industry.

Years have passed since Oakland residents passed Measure Z, and the city has naturally had more legal developments and ordinances passed. These new developments and challenges, however, have largely been in the form of interactions with the federal government. For example, in 2012, the federal government sent letters to the owners of buildings who rented to dispensaries claiming that they would seize the owner’s property if they continued to allow businesses that operate in contravention to federal drug law. While this was more a federal pre-emption battle than an example of local land use regulation, this was an important chapter in Oakland’s medical marijuana experiment and touches upon a specific area of land use.

Oakland has been through a lot of changes and is progressive in its approaches to regulating medical marijuana. It maintains the same kind of goals all municipalities have for its residents like maintaining their health and safety. Rather than seeing this emerging industry as a threat, the language of the legislative intent describes medical marijuana as an opportunity to protect people’s rights, and to take an existing demand for a product or medicine, take it out of the hands of criminals and those who would do harm, and put it back in the hands of law-abiding citizens. Regardless of whether a municipality views medical marijuana as an opportunity or a scourge, there is a lot of room for creativity in how to maintain public health and safety. The choices, however, come with different effects and consequences. Rather than achieving its goals by altering zoning laws, Oakland chose to achieve these goals by developing regulatory schemes like a patient ID card system and a governing body to provide oversight. Admittedly, this creates an ever present issue of funding, especially since the taxes promised by Measure Z can only be accrued if and when California legalizes cannabis for recreational use. Nevertheless, Oakland does not seem concerned with medical marijuana reaching sensitive areas, even after loosening the state’s 1000 foot restriction to only 600 feet. As such, Oakland can be a lesson that there are various approaches that can help a municipality achieve its goals without harming its local businesses in the process.

Stay tuned for the conclusion of the battle of San Jose! I’ll be looking back to San Jose and apply the lessons we have learned by exploring the regulations implemented by other municipalities. After having looked at how other municipalities regulate land use for their medical cannabis industry, we can finally make an informed evaluation of San Jose’s newest medical cannabis ordinance.

Medicated Patients Facing Eviction: Because Most Landlords Are Not “Pot-Friendly”

A few weeks ago, I came across an article in The Weed Blog instructing tenants who use medical marijuana to “BE A NINJA AND DON’T LET YOUR LANDLORD FIND OUT.” The article appears to suggest that if a tenant is suspected of using marijuana or being in possession of marijuana on the premises, the landlord may simply call the police and hope that the police will use their discretion to take the bad tenant away. It goes on to say, “only after lawyer’s fees, blood, sweat, and tears are you returned to your original place.”

While it may be in a patient’s best interest to “be a ninja,” tenants also enjoy many protections under both state and federal law. Despite the many laws that protect tenants from being mercilessly thrown out of their apartment, many people are not aware of the necessary steps a landlord must take to legally evict a tenant. This post will explain why it’s not as simple as it may seem for a landlord to evict someone for medical marijuana use (or anything else, for that matter).

First, forcible evictions, also known as “self-help” evictions, are highly discouraged under the common law of property and are illegal under California law. In other words, a landlord who has not gone through proper court proceedings cannot: forcibly remove a tenant’s belongings from the unit, “lock a tenant out” of his unit, or prevent him from entering his unit. A tenant may actually call the police himself if the landlord is attempting to evict him without going through the proper court proceedings.

Second, under California Law, tenants enjoy the right to “exclusive possession” of their unit for a fixed period of time (as specified in the lease agreement). For example, a tenant that has entered into a lease agreement for the term of twelve months cannot be evicted before the twelve-month term expires so long as he is in compliance with the terms and provisions of his lease agreement.

And third, as discussed in my last post, landlords can typically terminate a tenancy for a “material breach” of a provision of the lease agreement. Under California landlord-tenant law, a landlord to evict a tenant by simply giving the tenant a “3-Day Notice” if the tenant: fails to pay rent on time, damages the property, uses the property to do something illegal, or becomes a serious nuisance by disturbing other tenants. As such, a breach to the “no smoking” provision of a lease agreement may form the basis for an eviction action where medical marijuana is involved. A landlord may also argue that the tenant’s marijuana usage is illegal and has become a serious nuisance.

Whether and how a landlord may argue that marijuana use or possession constitutes a material breach of the lease agreement is the subject of the next post. However, in either of these instances a landlord may move forward with an eviction action by serving a tenant with either “3-Day Notice to Perform or Quit,” or a “3-Day Notice to Terminate Tenancy.” The former requires the tenant to “cure the breach” by refraining from smoking marijuana on the premises within the next three days or leave. The latter does not give the tenant the opportunity to “cure the breach” and requires him or her to move out within three days. Landlords are provided a substantial amount of discretion in deciding whether to give a tenant the opportunity to cure or not.

Simply stated, while a landlord is under no obligation to treat medical marijuana use as a protected activity or recognize state laws that have legalized or decriminalized marijuana, they must still go through the Unlawful Detainer Process before evicting a tenant. And that process begins with the much dreaded “3-Day Notice.”

The “ninja” approach mentioned in the Weed Blog reminded me of a time when I arrived at my apartment and noticed a blue piece of paper taped to my door. Many questions ran through my mind as I rushed to read that little blue piece of paper: Was my landlord raising my rent? Was I being cited for breaking a rule? Or worse, was I being evicted?

Having spent the past year doing eviction defense work, I have developed a vicarious fear for the dreaded “3-Day Notice” that brings my clients into my office. That little blue piece of paper triggered a sense of fear despite the fact that I’m aware of my rights and I was sure I hadn’t done anything wrong. Upon receiving a “3-Day Notice” many of my clients are similarly afraid and often believe that landlords hold limitless power and that they may freely enter their unit and lock them out.

The chart below provides an overview of the unlawful detainer process and the issues that follow a “3-Day Notice.” It also clarifies the tenant duties and responsibilities.

The Process: What this means to you as a tenant:
Tenant is served with a 3-Day Notice to Quit. You have 3 days to leave the unit, unless the notice gives you the option to “cure.”
Anytime after the third day, the Landlord may go to the court and file an eviction proceeding against you. This is commonly referred to as “the complaint.” (UD 100)

Some landlords are very proactive and will file the complaint on the fourth day following your 3-Day notice. Others may take up to a week.

Nothing yet. You are not legally required to vacate the unit. While there’s nothing you can do until the papers are handed to you in person, you can call your local court to find out if there is an action pending against you. Don’t ever assume the landlord will forget or will not move forward with the eviction
After the complaint has been filed, the landlord may then serve you with “Summons and Complaint—Unlawful Detainer.” This will include the complaint as well as some other court documents. You have five calendar days to file an answer with the court in which it was filed. (UD 105) It is extremely important to file your answer within the five days. If you need assistance, you may reach out to your local self-Hhlp center to assist you with filling out this form out.

You are still not legally required to vacate the unit.

At this point, the landlord cannot take any action against you. Once the complaint has been filed, the landlord must wait for the five calendar days to run before he can take any other action. If you’ve filed an answer, the landlord must wait for a “Notice of Hearing.” If you have submitted your answer, you will receive a letter in the mail giving you a “Notice of Hearing.” Your hearing date will be set for approximately 7-10 days after you filed your answer.

You are still not legally required to vacate the unit.

Once the hearing date has been set, the landlord or his attorney may reach out to you to try to negotiate a deal before your court date. You can negotiate a deal or wait for your day in court. It is crucial that any agreement you reach is in writing and that you still show up to court.

It’s important to keep in mind that many eviction actions are settled on or before the scheduled court date. While the entire eviction process takes approximately twenty days from the time of the first notice to terminate tenancy, there are many options for a tenant once a judgment has been entered against him. My next blog post will provide a detailed overview of the actual court filings, the “material breach,” and how an eviction for medical marijuana use is likely to play out in court.

In case you’re wondering about the little blue notice on my door: The notice read, “Attention Neighbors: We are remodeling the exercise room.” It went on to inform me of the days I would be unable to use the exercise room. I smiled sighed with relief because I wasn’t being evicted…Not yet, anyway.

Disclaimer: This post is intended to provide general information about your rights as a tenant. It should not be understood to provide legal advice. Should you receive any court documents, please contact an attorney regarding your particular issue.

 

What About the Children Who Need Public Benefits?

In my last article I discussed some of the ways marijuana convictions can prevent older “children” from getting financial aid. Financial aid is just one of many public benefits that take marijuana convictions into account. Conveniently, at least for discussion purposes, the guidelines for financial aid are spelled out, and it is relatively easy to look up how a marijuana conviction affects a student receiving aid.

There are many other public benefits that are less clear. Federal housing subsidies, like Section 8 housing, is complicated enough that one of my Drug Law and Policy colleagues, Ruby Renteria, is working on only that issue. Today, I am going to focus on two public benefits that affect children most directly: the foster care system and public school access.

Foster care in the state of California is a fairly difficult thing to discuss as far as across-the-board policies, since counties share and move children around depending on where beds are available. To be compatible with the system, foster assistance programs are often area-based. The one that I am most familiar with—and which I will use for purposes of this brief discussion—is the Court Appointed Special Advocates, or CASA, program. CASA appoints individuals to be constant advocates for youth in the foster system. Since lawyers and child protective services agents may change, the idea behind CASA is to give a child someone who will be more constant and not have any agenda other than supporting the child.

Programs like CASA are, perhaps unsurprisingly, sparsely funded and difficult to implement where there is need. It takes time to train advocates to understand the needs and concerns of the average foster child. Children with exceptional needs, like those with criminal records, tend to be harder to place with a CASA, and given the number of children without special needs who are awaiting a CASA, those youth with criminal records become less of a priority. In some instances, it may even disqualify the youth from receiving benefits.[1] So, if a child has a criminal record, or even a permanent non-criminal record of some kind, involving marijuana offenses, it will likely be a challenge for them to receive equal or optimal treatment in the foster system.

A public benefit that affects far more youth in California, however, is public school access. The data I gathered focuses on high schools, since high-school-aged children are probably using marijuana most. I also focus on high school because it, as an American institution, is held up on an alarmingly high pedestal. Homecomings, proms, and grandiose graduation ceremonies are featured in just about every “classic American” teen movie I care to think of. Being expelled from high school, or suspended and excluded from such traditional markers of acceptance, is therefore exceptionally disruptive.

To understand what happens if a child is caught with marijuana at school, it is perhaps best to have a bit of a primer in the California public education system and its disciplinary practices. Unlike foster care and its auxiliary programs, California education data is fairly accessible, and be forewarned: this is a bit of a downer.

Thousands of children are expelled from high school each year, and hundreds of thousands are suspended. California has been criticized over the last several years for its high rates of school discipline, so there has been significant effort to reign in overzealous districts, and the numbers have been dropping. And certainly, many students are expelled for meritorious reasons, like bringing weapons to school or sexual assault. However, the California Education Code’s grant of broad discretion to school administrators allows many children accused of lesser offenses to be uprooted and booted from their home school districts. Being forced to move away from their home school districts means that, among the confusion and general disarray that is caused administratively, students are also being removed from their peer groups. If they are not outright expelled, students with prior suspensions are often the first to be prevented from attending social activities like school dances and even graduation.

The California Education Code section 48915 outlines expulsion guidelines in detail for both violent and substance-related offenses. Regarding violent offenses, the Education Code requires explusion for students accused of bringing a firearm, brandishing a knife, possessing explosives, or sexual assault. The Education Code “expects” students accused of lesser violent crimes, including assault and battery, robbery, and possessing a knife, to be expelled. Finally, the Education Code allows discretionary expulsion of students who damage property, inflict mild physical injury, and possess “dangerous objects,” among other offenses. For the most part, these are guidelines that reflect the importance of keeping our youth safe while they are at school.

The Education Code’s take on drug offenses, however, is a little more difficult to swallow. The Education Code requires expulsion of any student who unlawfully sells a controlled substance. It expects expulsion for possession of any controlled substance, with an exception carved out for students who are caught for the first time possessing less than an ounce of marijuana. Finally, the Education Code allows discretionary expulsion for possessing any “drugs or alcohol,” selling substances that look like drugs or alcohol, and selling drug paraphernalia.

There are a number of things I find bizarre and concerning about these outlines. First, selling drugs at school is statutorily punishable in the same way as bringing firearms and explosives to school. This may be appropriate, though I am still concerned about foolish children getting caught up in a code section intended for hardened drug dealers and violent offenders. Recall from my last article how easy it was for Luis to be convicted of “giving a gift of less than ounce” for giving his friend a joint; had his friend handed him a dollar at that exchange, he likely would have been guilty of “sale” as defined by this Education Code section. More alarming is that in the “expulsion expected” category of offenses, possessing any drug is equated to violent robberies and causing serious injuries. Finally, “discretionary expulsions,” just like every kind of discretion, can be abused.

So, what are kids actually getting expelled for? As it turns out, students get expelled and suspended from schools for a veritable menu of offenses. The three largest groups of expulsions for the 2013-2014 school year were “Caused, Attempted, or Threatened Physical Injury,” “Possession, Use, Sale, or Furnishing a Controlled Substance, Alcohol, Intoxicant,” and “Disruption, Defiance.” Notably, all these expulsions were made under section 48900, which outlines the suspension and expulsion procedures for school administrators; a far smaller number of incidences cited section 48915, which outlines expulsions only (as discussed above).

I dug through significantly more data from the California Department of Education DataQuest site to try and figure out if there was a way to determine how often kids are disciplined for marijuana possession. It turns out it’s pretty much impossible to determine. The construction of the Education Code means that marijuana offenses are lumped together with alcohol and other drugs for reporting purposes. When considering how these numbers may change if marijuana is legalized for adult use, it would be useful to look at the alcohol and tobacco school discipline rates. Unfortunately, even alcohol is lumped together with other intoxicants and can’t be pulled apart to examine. Tobacco is not, and it may be a small beacon of hope to highlight that, although over 10,000 students were suspended for tobacco use in the 2013-2014 school year, only 110 were suspended.

While it may not be possible to try and predict the effect legalizing marijuana for adult use will have on school expulsion and suspension policies, I believe we nonetheless need legalization to impact school disciplinary policies. Why? To begin, anecdotal stories from across the country demonstrating strict policies on marijuana possession are becoming all the more frequent. Secondly, there is mounting evidence suggesting the zero-tolerance attitude towards marijuana is having the exact opposite effect desired, and actually makes students more likely to use marijuana. Finally, we know suspensions and expulsions disproportionally adversely affect students of color.

It is perhaps unsurprising at this point that foster youth in California are also disproportionately children of color. Next time in What About the Children, I plan on discussing the issue of race, as well as why talking about children of color is so important.

Clare McKendry for Drug Law and Policy – Follow us on Twitter @DrugLawPolicy

[1] Due to so many of these programs having differing policies from county to county, I had trouble finding a valid citation for this fact. The best, anecdotal citation, I can provide is that I have several friends who are CASAs who have described their chapter’s policy, or de facto policy, as excluding youth with criminal records.