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California Cannabis Delivery Rules Evolving

Cannabis Law Group — Sat, 21 Jan 2023 15:30:36 GMT

As of Jan. 1, 2023, cannabis delivery in California rules have expanded to allow authorized vehicles to carry more pot products – and under fewer restrictions – than was previously allowed. Also, by next year, cities will be expected to take certain measures to improve access to medicinal marijuana by guaranteeing delivery options for patients and caregivers.

While this is good news for many cannabis companies, our Los Angeles marijuana business consulting lawyers urge leadership to initiate meticulous review of internal standards in contrast with the state’s most up-to-date standards. Marijuana delivery companies should do this with the aid of an experienced legal team, just to ensure all products and processes – from labeling to employee screening to vehicle maintenance to product testing to insurance coverage to order fulfillment – are above-board and perfectly aligned with state law. Doing so can go a long way toward maintaining public trust, securing customer loyalty, and avoiding costly delays and product losses if any aspect of your operation comes into question.

The new California cannabis delivery standards stem from number of bills signed by Gov. Gavin Newsom last fall. Among those:

SB 1186 , the Medicinal Cannabis Patients’ Right of Access Act, expands medical cannabis delivery availability in communities that would otherwise ban it. The new law requires that by January 2024, cities must adopt new ordinances to allow for medical cannabis delivery to patients and their primary caregivers. For some communities, this is going to mean rewriting laws to allow for non-storefront retail licensing within their jurisdiction. This was a very hotly-contested bill when it was first introduced. The law bars local governments from de facto bans on medical marijuana delivery services (done through severe restrictions on things like hours of operation or frequency of sales or physical retail location requirements.) State grant money is available for local government agencies that need some assistance complying with the law.
Expanding cannabis delivery allowable amounts and processes. Prior to the start of this year, authorized cannabis delivery vehicles were only allowed to carry $5,000 worth of cannabis at any time – and no more than $3,000 of that could be “un-ordered,” or not spoken for by a specific customer. Now, as of Jan. 1st, regulations handed down by the California Department of Cannabis Control (DCC) allow up to $10,000 in cannabis to be in an authorized cannabis delivery vehicle at any given time, and up to $5,000 of that can be un-ordered, meaning it isn’t sp0ken for by a particular customer when they load it up. This is what is sometimes referred to as the “ice cream truck model.” The provisions also give a green light to permanent curbside pickup options, and allows cannabis products to be distributed directly from the premises where they’re being stored (simplifying the supply chain and keeping costs in check).

Different Cannabis Delivery Models

Cannabis companies that provide delivery of their products tend to follow one of a few different models – the ice cream truck being just one of them.

To explain these further:

Ice cream truck delivery model. This is a type of dynamic delivery with mobile inventory that allows unique menus for every authorized delivery vehicle. Drivers have the ability to take, fulfill, and deliver numerous orders while they’re in the field – just like an ice cream truck would (minus the super-flashy advertising and old-timey jingle). To avoid prominent advertising that could attract both thieves and neighborhood complaints, companies might look into pinging customers who have pre-signed up for notifications when a delivery driver is in a certain neighborhood, etc.
Beehive delivery model. This is sometimes referred to as bulk delivery. It’s essentially fulfilling multiple orders via delivery with the same driver along a route that is dictated by previously-taken orders.
Pizza delivery model. This is also called a single delivery. Just like many pizza deliveries, it involves orders taken – and delivered – one-at-a-time.

California law that allows cannabis companies to take advantage of the ice cream truck delivery model opens up many financial opportunities – particularly with online/mobile ordering.

If you are a cannabis company looking to ensure your delivery and distribution procedures are in line with the latest state standards, our longtime California cannabis lawyers can help.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

2023 California Cannabis Regulations Update: 6 Big Changes for Dispensaries, Dec. 16, 2022, By David Hua, California NORML

More Blog Entries:

Study: California Cannabis Companies 100% Compliant With ID Checks to Prevent Youth Purchases, June 25, 2022, California Cannabis Lawyer Blog

California Marijuana Delivery Lawsuit Slated for Next Month

Cannabis Law Group — Fri, 12 Jun 2020 20:10:57 GMT

The California marijuana delivery services lawsuit was originally scheduled for April, but was pushed back because of the novel coronavirus outbreak. It is now on track to be heard next month in the Fresno County Superior Court. The California Attorney General’s Office, filing a brief on behalf of the state’s Bureau of Cannabis Control, used the word “bizarre” to describe the effort to overturn state policy permitting marijuana deliveries regardless of local bans or rules.

As our Los Angeles marijuana business attorneys know, most of those in the industry are in favor of a statewide delivery option. However, 25 localities have formally objected to the policy. In response, the attorney general’s brief insisted that the BCC’s marijuana delivery policy aligns with state law.

The attorney general’s brief, a response to the local governments arguing pot delivery violates state law – including Proposition 64 and the Medicinal and Adult Use Cannabis and Regulation Safety Act. The local governments’ lawsuit alleges the BCC’s policy violates the provision of Prop. 64 that allows for local regulation of cannabis commerce. The brief calls the local governments’ argument against marijuana delivery “bizarre” because MAUCRSA specifically states that local jurisdictions “shall not prevent delivery of cannabis or cannabis products” – yet that is exactly what the local government agencies are arguing they should have unlimited power to do. Allowing localities to ban not only all sales but delivery of marijuana would defeat voters’ purpose and objectives of Prop. 64.

This statement was made in addition to numerous legal arguments against the local governments’ anti-marijuana delivery stance. Some of those include:

The lawsuit isn’t based on an actual conflict between local and state law, but rather primarily on hypothetical what-ifs.
Local police lack the power to prevent private individuals ordering legal product for delivery.
Both Prop. 64 and MAUCRSA explicitly allow pot delivery throughout the state.
The legal marijuana market is vulnerable to collapse if the court sides with the local governments on this.

To that last point, the state noted that if a city isn’t going to allow legal sales and it won’t even allow delivery from lawful companies operating in other jurisdictions, than the only choice people will have will be black market sales. If that’s the only option individuals have, then the whole purpose of a legal, regulated, statewide commercial marijuana market is defeated.

An attorney representing the local government agencies told one media outlet that community leaders only agreed to scale back their opposition of legalized recreational marijuana when they were given assurance they could continue regulation of the industry within their jurisdiction. The BCC, they argue, lacks the statutory authority to adopt regulation that allows delivery vans loaded with “millions of dollars worth” of products at all hours of the day and night and hand it out from door to door. (It’s worth noting the state cap that anyone can drive around with at any given time is $5,000.)

California Marijuana Attorneys Weigh Pot Delivery’s Fate

Our Orange County marijuana delivery attorneys know that whatever the court decides could have far-reaching impact on the state, considering that two-thirds of cities and counties across the state have marijuana business bans.

As for the strength of the cities’ argument, one question will certainly be whether cannabis deliveries fall within the cope of commercial cannabis activities that local government agencies have the power to ban. Another significant point is likely to be the issue of police powers.

But no matter what the superior court decides, it’s likely this matter will be unresolved for some time. An appeal is virtually a guarantee, and some expect this case will make it to the California Supreme Court, a prospect that could take several years.

The Los Angeles CANNABIS LAW Group represents growers, dispensaries, ancillary companies, patients, doctors and those facing marijuana charges. Call us at 949-375-4734.

Additional Resources:

County of Santa Cruz et al v. Bureau of Cannabis Control, June 8, 2020, Fresno County Superior Court