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Local Pot Bans Show Not All Cities Are Rushing to Cash in on Cannabis

Large cities that bar legalized recreational marijuana shops create a windfall for small nearby towns that gleefully welcome dispensaries.

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Although California voters approved the sale and possession of recreational marijuana in the Golden State, it won’t happen in Fresno. The Fresno City Council recently voted to ban retail marijuana dispensaries and all related marijuana businesses within the city.

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The ban, which needs final approval later in September, applies to everything related to marijuana: cultivation, storing, laboratory testing, labeling, transportation, distribution, delivery or sale.

Fresno Mayor Lee Brand led the movement to institute a ban. Debate over the issue divided the council, with four voting for the ban and three against. The main issue, not surprisingly, is the potential tax dollars the city will miss out on.

Brand pushed for the ban, although he told the Fresno Bee that the city still needs to “take a look and see what the implications are.” The debate in Fresno mirrors an issue seen across the country. Although voters across a state might approve recreational marijuana, local governments can still say no.

Related: Why Are Opioid Painkillers Legal But Marijuana Isn't?

California not so unified.

As with most complex issues, those on the outside tend to have a generalized view. California, for example, has the reputation of being a liberal haven on marijuana and pretty much everything else. That’s not the universal case, of course, including with the cannabis business.

Fresno is not alone in its stance against marijuana. Anaheim, the biggest city in Orange County just south of Los Angeles, has banned the cultivation and sale of both recreational and medical marijuana. The medical marijuana ban has already withstood a legal challenge from medical marijuana patients.

Laguna Woods, also in Orange County, has a similar ban in place on dispensaries.

The reasons given vary. Some local officials maintain the bans give them more control over local law, keeping them from depending on potentially mercurial state laws. Others, like leaders in Laguna Woods, cite the need for increased law enforcement to help regulate the marijuana industry. That’s a cost they don’t want to pay.

Many California counties, including Santa Barbara, Ventura, San Diego and Imperial which have large population, have yet to determine their laws on recreational sales ahead of statewide legalization in January 2018. Many already had banned the cultivation and sale of medical marijuana, which has been legal in the Golden State since 1995.

Related: To Understand the Forces Favoring and Opposing Legal Marijuana, Study Arizona.

Pattern emerges in Colorado.

Even Colorado, the poster state for recreational marijuana since beginning sales in 2014, has many areas where entrepreneurs cannot start a grow facility or open a retail dispensary.

Interestingly, many smaller communities have embraced marijuana business, while larger ones have not. Colorado Springs does not allow retail sale of marijuana, nor does the surrounding county, but the tiny neighboring town of Manitou Springs does a brisk cannabis business. Vail, Greeley and Fort Morgan hall all banned sales, but smaller towns within a short driving distance have not. In all, more than 25 cities and counties have banned marijuana sales.

In all cases, local ordinances do not trump state law that allows for state residents to grow plants within the privacy of their home.

For buyers, the patchwork quilt of laws means checking local ordinances to make sure you can legally buy marijuana there, while avoiding illegal dispensaries that often pop up in cities where there is a ban.

For entrepreneurs, it means navigating local laws no matter what the state law might be. For cities and counties, it means an ongoing debate between the tax revenue the marijuana business offers versus the potential costs of having a regulated system.

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