Cannabis compliance zoning and permitted activity. If you are a current or prospective landowner of commercial property in Santa Rosa, you and your real estate agent may be wondering whether you can legally lease to any part of the medical cannabis industry [and the recreational cannabis industry, should the November initiative pass]; what types of protections to put in your lease, and whether your lease terms would be enforceable, given that cannabis remains illegal under federal law.
First, the U.S. Department of Justice has de-prioritized enforcement of the federal ban on cannabis, and Congress has formally limited enforcement of federal law by defunding any enforcement activities by the Department of Justice. In addition, the U.S. District Court for the Northern District of California has ordered that the Department of Justice may not enforce an injunction against a dispensary where the dispensary was operating in compliance with California law. U.S. v Marin Alliance for Medical Marijuana, U.S.D.C., N.D.Cal. Case No. 98-00086. Presumably this would extend to other cannabis-related businesses as well.
Secondly, once state licenses are available and obtained, landowners can be reassured that under the California Medical Cannabis Regulation and Safety Act (“MCRSA”), formerly known as the California Medical Marijuana Regulation and Safety Act [“MMRSA”], a landowner cannot be subject to arrest, prosecution or “other sanction” under state law, merely for allowing a licensed cannabis business to operate on their property.
In preparation for the state licenses, on the local level, in April 2016, the City of Santa Rosa began accepting permit applications for commercial cultivation of medical cannabis in industrial zoning districts. Currently, there are three applications for cultivation of medical cannabis pending with the City, and no permits have yet been approved. The applicants are working with city officials to make it through the permit process. To date, the City allows two dispensaries to operate within the city limits. The comprehensive policy that is being drafted by the City may open up the possibility for more dispensaries to operate in the city limits in the future.
The City of Santa Rosa has recently announced that it will begin to accept permit applications for additional medical cannabis support businesses that will allow medical cannabis cultivators to get their products to dispensaries. Therefore, at present the following medical cannabis activities are allowed, with some restrictions, in the following zones in Santa Rosa:
Cannabis Compliance Zoning – Permitted Activity – City of Santa Rosa
ZONE / PERMITTED ACTIVITY
- COMMERCIAL –
- BUSINESS PARK
- LIMITED LIGHT INDUSTRIAL
- LIGHT INDUSTRIAL
- GENERAL INDUSTRIAL
Our office will shortly have a cannabis compliance zoning map of what uses will be permitted in what areas, and we can advise you on what uses may be permitted on your specific parcel[s].
Our office can also prepare leases with special protections for you, such as tenant reimbursement for additional costs you may face in the way of increased property taxes, insurance, or utility usage above normal amounts; and indemnification for the risks of hazardous materials, personal injury, unexpected criminal activity, and other risks associated with the cannabis industry.
We also maintain a list of trusted professionals [real estate agents, CPA’s, bookkeepers, environment consultants and other specialty consultants, etc.] to refer you to as needed.
There is some concern at the moment over whether leases and other contracts involving the cannabis industry are enforceable, given that cannabis is still illegal at the federal level. Indeed, some courts have refused to enforce such contract for that reason. Although this area of the law is not settled, at the moment we feel that an arbitration clause will provide more protection for you, because an arbitrator is less likely to be concerned about whether the purpose of the contract is legal at the federal level [so long as it is legal under state law], and because a court will be more likely to enforce an arbitration award without inquiring into the nature of the underlying contract.
Cannabis Compliance Rules and Regulations
In any event, our firm has been closely following the development of medical cannabis rules and regulations at the city, county and state levels. We can advise you of any possible issues for you as you take full advantage of the many opportunities for you as a landowner in the areas of medical cannabis, and potentially the recreational cannabis (in the future).
Call Beck Law Green – a Cannabis Compliance Group today to schedule a consultation! (707) 576-7175