Marijuana DispensaryLocal regulation of the medical marijuana industry has become a hot-button area of controversy. New ordinances are routinely being proposed and adopted – and then challenged in court. In a March 25 opinion filed in Union of Medical Marijuana Patients, Inc. v. City of Upland, the Fourth Appellate District weighed in on one such local dispute, holding that a city ordinance prohibiting mobile marijuana dispensaries is not a “project” subject to CEQA review, but is merely a restatement of existing law that will not cause a physical change in the environment.

In 2007, the City of Upland adopted a municipal ordinance stating that “[n]o medical marijuana dispensary . . . shall be permitted in any zone within the city,” and defining a dispensary as including any “fixed or mobile” facility or location. The City prepared and adopted a negative declaration for this ordinance, which was not challenged. In 2013, the City adopted another ordinance, which added a new chapter to the municipal code expressly stating that mobile dispensaries “are prohibited” in the City. The 2013 ordinance contained recitals asserting that such facilities were associated with criminal activity and highly likely to “flourish in the City without the adoption of this Ordinance.”

Prior to the adoption of the 2013 ordinance, the Union of Medical Marijuana Patients, Inc. (UMMP) submitted comments opposing the ordinance and arguing that CEQA review was required. UMMP asserted that the ordinance was a “project” for purposes of CEQA because it would have foreseeable effects on the environment, resulting from increased travel by residents outside the City to obtain marijuana, as well as increased cultivation within the City. However, the City did not conduct CEQA review of the ordinance before adopting it, and UMMP filed a petition for writ of mandate. The trial court denied the petition.

The Fourth Appellate District affirmed, holding that, as a matter of law, the ordinance is not a project subject to CEQA. The Court determined that the 2013 ordinance “merely restates the prohibition on mobile dispensaries that was first imposed by the 2007 ordinance” and therefore will not cause either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment. In doing so, it rejected UMMP’s argument that the 2007 ordinance was solely a land use regulation that did not “regulate activities carried out through vehicular means,” noting that (1) the language of the 2007 ordinance does not support this interpretation, (2) the fact that the 2007 ordinance is codified in the zoning title of the municipal code is not dispositive, (3) the City has the authority to regulate both land uses and other conduct and activities through its police power, and (4) the City could enforce a violation of the 2007 ordinance by a mobile dispensary, through an action for public nuisance.

The Court also held that, even if it were to conclude that the 2013 ordinance is not just a restatement of existing law, the ordinance is still not a “project” subject to CEQA review: the environmental impacts cited by UMMP are “based on layers of speculation” – e.g., concerning the existence and number of patients within the City, their usage rates of marijuana and of mobile dispensaries, and the likelihood of their beginning to cultivate marijuana in response to the ordinance – and therefore are too speculative or unlikely to be deemed reasonably foreseeable.

Interestingly, nowhere in the decision does the Court address the City’s finding in the 2013 ordinance that mobile dispensaries were highly likely to “flourish in the City without the adoption of this Ordinance” – which arguably indicates that the City itself believed that the ordinance was not merely a restatement of existing law.

A final note: even though the City prevailed in this legal battle, the war is not yet over. According to the City Clerk’s webpage, opponents of the 2007 and 2013 ordinances have succeeded in qualifying a ballot measure for the November 2016 election that would repeal those laws and replace them with a new system for regulating medical marijuana dispensaries. Given that the California Supreme Court has held that citizen-sponsored initiatives are not subject to CEQA review, it appears that the City’s electorate, rather than the courts, will have the final say in this matter.