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Local Laws Make Marijuana Businesses Loco

Even cannabis entrepreneurs in legal states struggle with draconian restrictions at a local level

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Even the most casual observer of the current legal marijuana situation in the United States understands that there now exists a patchwork quilt of marijuana laws from sea to shining sea.

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In California, marijuana is legal for both recreational and medical sales. Same thing in Colorado, Oregon, Washington, and (sort of) Massachusetts.

But even within those states where marijuana is legal for recreational sales, there’s another level of bureaucracy that has the right not to allow that to happen. Those are the cities and counties that have banned any type of cannabis-related business.

It’s already starting in New Jersey, which hasn’t even approved legal recreational marijuana sales. The city of Clifton recently joined a growing list of cities and towns banning the marijuana industry.

Related: With Higher Prices and Less Product, California Dispensaries Face Angry Customers

Colorado Example

Colorado, the first state to allow recreational marijuana sales, offers a good example of how this works when it gets down to the local details.

Across the state, there are 510 licenses approved for marijuana dispensaries. However, only 70 cities have voted to allow cannabis sales. Colorado has 271 incorporated municipalities.

That’s obviously something for consumers (especially visitors to Colorado) to keep track of. But it gets even more complicated than that for marijuana entrepreneurs.

Cities also have the right to decide what kind of marijuana business they allow. So, for example, you might be able to open a dispensary, but you’ll have to cultivate the plant in another area of the state where that is allowed.

And then there are the often-Byzantine zoning laws, as a case in California demonstrates.

Related: Denver Mayor Who Opposed Legal Marijuana Now Celebrates It

The San Diego Zoning Puzzle

A detailed example of what cannabis entrepreneurs face comes from California, which has had legal medical marijuana sales since the 1990s and started recreational marijuana sales in January 2018.

Earlier this year, marijuana entrepreneur Belinda Smith told KPBS in San Diego about the hoops she has attempted to jump through while trying to get a license for her recreational marijuana dispensary.

She has been working to get permits from San Diego to renovate a former credit union branch building into a dispensary. Her application has been in the system for more than two years. Part of the hold-up has been getting her application in front of a local community planning group, which she had to sue in order to get a hearing.  

She also discovered earlier this year that an obscure clause in the community’s official planning documents will not let her sell recreational marijuana. Why? Because it’s tagged as retail sales as opposed to medical marijuana’s commercial sales designation.

A rival dispensary also has appealed Smith’s exemption from the California Environmental Quality Act. Through all this, she paid rent on a building that sat empty. Finally, this summer -- despite continued opposition -- the application was approved by the city council.

For those interested in getting into the cannabis business, Smith’s story offers a cautionary tale. It’s vital to go beyond state laws and do research into the county, city, and local community laws to find out what obstacles must be overcome.

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