On July 1, California’s reissued emergency regulations on cannabis businesses went into effect. As widely reported, marijuana licensees around the state rushed to unload product in fire sales prior to the new more onerous burdens taking effect. Unfortunately, despite the recommendations of many, including over 150 cannabis businesses as well as policy analysts here Reason Foundation, the state Bureau of Cannabis Control has shown little appetite for relaxing the rules thus far.
But the real story is just beginning. The emergency rules will expire at the end of this year, to be replaced by a permanent set of regulations. Language in Proposition 64 and subsequent laws require any regulations of the marijuana market to meet a purpose explicitly spelled out in the legislation, be based on best available evidence and to not unreasonably foreclose alternative procedures or technologies to achieve those statutory purposes.
For multiple legal and practical reasons, the final regulations will be ripe for challenge under that law. And history has already shown California courts’ willingness to intervene. Back in 2010, the state Supreme Court eviscerated a large swath of state mandates on medical cannabis as unconstitutional (though admittedly for different reasons).
It is fair to say that a significant part of the rules (as they stand now) will find themselves extremely vulnerable to legal challenge. Will the Bureau of Cannabis Control ease the burdens or be content to fight it out in court? Stay tuned.