Agenda - Planning Commission - 07/21/2016

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Zoning Bulletin May 25, 2016 I Volume 10 I Issue 10 Citation: City of Palm Springs v. Luna Crest Inc., 245 Cal. App. 4th 879, 200 Cal. Rptr. 3d 128 (4th Dist. 2016) CALIFORNIA (03/17/16)—This case addressed the issue of whether the federal Controlled Substances Act pre-empted a city's ordinance requiring a pernlit to operate a medical marijuana dispensary. The Background/Facts: Luna Crest Inc. ("Luna") opened a medical marijuana dispensary in the City of Palm Springs (the "City"). The City's Municipal Code (the "Code") required a permit to operate a marijuana dispensary in the City. Luna did not obtain a permit. In September 2014, the City filed a legal action, seeking and obtaining a permanent injunction against Luna's continued operation of the unpermitted dispensary. Luna then filed a cross -complaint, alleging that the provisions of the City Code that regulate medical marijuana —and in particular, the provisions requiring a permit to operate a medical marijuana dispensary —were invalid and unenforceable. Luna argued that those provisions were pre-empted by the federal Controlled Sub- stances Act. Luna argued that by not just decriminalizing, but af- firmatively permitting the operation of medical marijuana dispensaries, the City violated federal drug laws. Luna emphasized specifically the City's involvement not only in allowing a certain number of dispensaries to operate, but in overseeing their operation through regulations, includ- ing testing requirements regarding safety and potency of the marijuana and marijuana products being dispensed. Luna filed a motion seeking a preliminary injunction against continued enforcement of the City's permitting requirement. The trial court denied Luna's motion. Luna appealed. DECISION: Judgment of superior court affirmed. The Court of Appeal, Fourth District, Division 2, California, held that the federal Controlled Substances Act does not pre-empt municipal ordi- nances requiring a permit to operate a medical marijuana dispensary. In so holding, the court rejected Luna's suggestions that both "conflict preemption" and "obstacle preemption" principles required the conclu- sion that the City's permit requirement was pre-empted by federal law. The court explained that "[c]onflict preemption exists when 'simultane- ous compliance with both state and federal directives is impossible,' " creating a "positive conflict with federal law." The court further explained that under "obstacle preemption," the city's permit require- ment would be pre-empted if it " [stood] as an obstacle to the ac- complishment and execution of the full purposes and objectives of Congress.' " Here, the court found that, with respect to conflict pre-emption, Luna had failed to point to a provision in the City Code that was in "positive conflict" with the federal Controlled Substances Act. In fact, the court ©2016 Thomson Reuters 3