Growers Network Staff

January 25, 2019 5 min read
January 25, 2019
5 min read

Statewide Delivery Rules Bypass Local Marijuana Dispensary and Retail Bans

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Susan Gunelius of Cannabiz Media explains an interesting way to get around city-wide bans on local cannabis.


Disclaimer

This article was originally published on Cannabiz Media’s blog. If you would like to read the original article, click here.


It’s not unusual for states to allow local municipalities to ban marijuana sales within their borders, but in doing so, they’re limiting access to medical marijuana that patients within their borders need. As a result, patients have only four options:

  • Move to a different municipality that allows cannabis sales
  • They (or their caregivers) can travel greater distances to make a purchase
  • Forego medical marijuana to treat their conditions
  • Buy from the black market

In all three cases, patients typically have to pay a lot, won’t get the medical marijuana they need, or add to the illicit market’s sales. Fortunately, some states have recognized that when municipalities ban marijuana dispensaries or retail locations, the result isn’t less drug activity. It’s just less obvious drug activity. In fact, dispensary and retailer bans often have the opposite effect and ultimately benefit the black market.

To ensure that patients have access to the medical marijuana they need without requiring that municipalities allow dispensaries, some states have decided to approve medical marijuana deliveries to cities and towns that have banned dispensaries and retailers.


Medical Marijuana Delivery Now Available Statewide in Oregon


On December 28, 2018, a new rule from the Oregon Liquor Control Commission went into effect in Oregon, which allows medical marijuana patients to order cannabis for delivery in any municipality, including those that have prohibited licensed marijuana activity. This means medical marijuana deliveries can be made to patients in towns that have banned marijuana sales and dispensaries.

This change came into effect just a couple weeks after the state lifted a temporary limit on the amount of marijuana a patient or caregiver could purchase at one time from a single ounce to eight ounces. The limit began in August 2018 to reduce what the state referred to as “nefarious” purchases. However, the limit created an undue burden on medical marijuana patients. It also backfired, fueling the black market and increasing the state’s marijuana oversupply problem.

While many town officials disagree with the new rules, the OLCC believes the rules will give medical marijuana patients access to the cannabis they’re entitled to, particularly those who don’t live close to dispensaries (sometimes called “cannabis retail deserts”) and can’t travel.


Statewide Delivery Could be Coming to California


This month, California’s Office of Administrative Law (COAL) is expected to review proposed regulations from the Bureau of Cannabis Control (BCC), which will include rules that allow marijuana business to make deliveries in municipalities that banned retail stores.

California’s cannabis program is based on a dual-licensing and local control system, which means licensed marijuana dispensaries and retailers must get permission from both the state and the municipality that they want to operate in. Unfortunately, for many MMJ patients, the California Cannabis Industry Association (CCIA) estimates that fewer than 20% of California’s cities allow retail stores to sell marijuana for recreational use. In Los Angeles County, a whopping 93% of cities ban retail sales.

As a result, there are large areas in the state of California where patients have no reasonable way to access legal medical marijuana. The proposed regulations will allow licensed retailers to deliver to any jurisdiction within the state as long as orders are placed with a state-licensed retailer, the delivery is made to the same address as the one from which the order was placed, and the delivery vehicle doesn’t display any type of advertising, images, or messages that promote cannabis.

For patients, having access to medical marijuana through deliveries will solve the physical accessibility problem, and for many licensed retailers that are competing with thousands of unlicensed delivery services that already deliver in cities where licensed stores are banned, the new rules will enable them to better compete with the black market. Of course, the black market is likely to continue to thrive since the various taxes applied to legal marijuana sales can increase the price by more than 34% in Los Angeles, but statewide delivery is a step in the right direction.


The Future of Local Bans vs. Statewide Delivery Rules


Based on the data, it would seem that allowing statewide delivery of medical marijuana would solve patient access problems and steal some business from the black market. If it works in Oregon and California, it’s likely that other states will follow.

Consider Michigan where recreational sales haven’t started yet. Dozens of cities have already banned marijuana sales according to the state’s Department of Licensing and Regulatory Affairs – including cities where voters made it clear that they wanted it based on their votes in November.

For example, marijuana retailers were banned by city commissioners from Royal Oak, Michigan despite the fact that 70% of residents voted yes on proposal 1 to legalize marijuana sales. The same thing happened in Birmingham, Michigan even though 61% of voters voted in favor of legal marijuana. This goes back to another issue we’ve been discussing.

Michigan’s recreational market won’t open for sales until the Department of Licensing and Regulatory Affairs creates the rules and regulations and begins granting licenses, which isn’t expected to start until 2020. The state has a lot of time to create rules that give medical marijuana patients maximum access. Could statewide delivery be the solution Michigan and other states choose to implement? We’ll have to wait and see.


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About the Author

Susan Gunelius, Lead Analyst for Cannabiz Media and author of Marijuana Licensing Reference Guide: 2017 Edition, is also President & CEO of KeySplash Creative, Inc., a marketing communications company offering, copywriting, content marketing, email marketing, social media marketing, and strategic branding services. She spent the first half of her 25-year career directing marketing programs for AT&T and HSBC.