California state court rules that federal law preempts a local licensing ordinance – bad news for the rest of us?

Pack v City of Long Beach is one of four medical cannabis cases that is going to the California Supreme Court. I believe that the holding and reasoning are not good for the type of system for licensing dispensaries that appears in the RI, NY, and NJ laws, i.e. people apply to the state for licenses to open dispensaries.

The plaintiffs in the Pack case were patients whose dispensaries were closed down under an ordinance which the city passed in order to create a lottery for dispensary applicants. The plaintiffs apparently didn’t like the ordinance because they considered it too restrictive so they sued – get this – for a declaration that federal law preempts the ordnance, i.e. it conflicts with federal law and therefore cannot be enforced. That federal law is the Controlled Substances Act, which is the bane of existence of everyone who seeks to liberalize laws governing cannabis, so this position is completely counter-intuitive.

The judge agreed and ruled that the ordinance conflicts with the Controlled Substances Act and is therefore preempted. The reasoning was that California law only exempts patients, caregivers and cooperatives (the legal fiction is that the dispensaries are patient cooperatives or collectives – I believe that is how it works) from criminal prosecution, but the city ordnance affirmatively provided a mechanism for licensing dispensaries, i.e. it authorized them to operate.

I see some problems with the court’s reasoning but that is the holding. The problem is that all of the state regulatory schemes coming out now, unlike the system in California, provide that the STATE license the dispensaries – exactly what the California state court said is preempted by the CSA. In the final calculation the judge is probably right, say I without having read the CSA all the way through and researched the case law.



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