Cantil-Sakauye California State Supreme Court Chief Justice Tani Cantil-Sakauye. Photo: Jason Doiy/The Recorder

California cities and counties considering rules for where and how marijuana businesses can open shop may need to conduct an additional environmental review, the state Supreme Court said Monday.

In a unanimous ruling, the state’s high court said the city of San Diego did not go far enough in scrutinizing the potential impacts of its 2014 medical marijuana ordinance, which effectively allowed for 30 dispensaries. The city incorrectly determined that its ordinance was not a project for purposes of the California Environmental Quality Act, or CEQA, which mandates review of certain developments’ impacts on traffic, air pollution and other quality-of-life issues.

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“The city argues that too little is known about the environmental impact of the ordinance to permit effective environmental review at this stage, but that argument conflates the various tiers of CEQA review,” Chief Justice Tani Cantil-Sakauye wrote for the court. “At this initial tier in the CEQA process, the potential of the Ordinance to cause an environmental change requires the City to treat it as a project and proceed to the next steps of the CEQA analysis.”

The court did not say what level of environmental review the ordinance, or others like them, should trigger.

Although the ruling centers more broadly on California’s bedrock environmental law than the specifics of local marijuana regulation, it offers some guidance for leaders of cities and counties weighing ordinances governing cannabis locations and operations.

“I think it’s really helpful,” said Jeffrey Dunn, a Best Best & Krieger partner who counsels local governments on licensed marijuana facilities. “If you are looking to enact an ordinance to allow cannabis businesses you have to consider under CEQA the potential for environmental impacts.”

Ed Grutzmacher, of counsel with Meyers Nave Riback Silver & Wilson, said the ruling will likely lead to municipalities, which may have relied on the no-project finding before, now turning to categorical or statutory exemptions under the California Environmental Quality Act to avoid full-blown environmental reviews of acts such as zoning amendments.

“I think the court was hinting here that you can show that a project should be exempt under the ‘common sense’ exemption,” Grutzmacher said. The common sense or general rule exemption applies proponents who can show their projects have no potential to create significant environmental impacts.

The lawsuit challenging the city’s ordinance was brought by the Union of Medical Marijuana Patients, which argued the cap on the number of dispensaries might increase traffic from pot-seekers driving across town or encourage more users to grow weed at home.

A spokeswoman for the city of San Diego said Monday that officials are still reviewing the Supreme Court’s ruling. San Diego was represented by the office of City Attorney Mara Elliott. Attorneys from the Channel Law Group represented the Union of Medical Marijuana Patients.

Best Best & Krieger attorneys Michelle Ouellette, Charity Schiller and Sarah Owsowitz represented the League of California Cities and the California State Association of Counties as friends of the court. The government associations had urged the court not to make a broad finding that every planning act, including zoning changes, should trigger a review under the California Environmental Quality Act.

 

The California Supreme Court ruling is posted below:

 

 

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