8 Tips for Fighting Cannabis Moratoriums

Columns - Guest Column: Business

An adverse local government can present continuous roadblocks, preventing cannabis businesses from operating efficiently.

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Virtually every state cannabis program has an element of local control, which can be a blessing and a curse. Strong local approval of the cannabis industry can make doing business easy, from licensing to operating, and a favorable local government can influence state-level regulators. An adverse local government, meanwhile, can present continuous roadblocks, preventing cannabis businesses from operating efficiently—or, as in the case of moratoriums, preventing them from operating at all.


We have worked with clients and local governments to either rescind cannabis moratoriums or to prevent those moratoriums from being enacted. The process can be long and sometimes arduous, but we have had success educating local officials and residents about the reality of the cannabis industry. Most opposition, we find, comes from a lack of understanding and subscribing to outdated stigmas.

Here is a road map should your business encounter local cannabis opposition, along with eight tips for addressing the pushback.

If legislation enacting (or rescinding) a moratorium is referred to a committee, you need to be at the committee meetings.

Know the Process

Every locality has a nuanced procedure for handling cannabis moratoriums. Some cities may enact a temporary ban while they craft final local regulations. Some may enact a permanent ban on an emergency basis (more likely in a state with a new cannabis law). In either event, understanding how to navigate the local process is key to a favorable outcome.

Local ordinances typically begin by a city councilperson introducing draft legislation to the full council. That draft legislation is referred for consideration to one of the various council committees, which meet separately from the full council. Committees are smaller than the full council and generally are comprised of only a handful of council members, with one member chairing the committee.

After considering a draft ordinance, the committee recommends that the full council either pass or defeat the ordinance. After draft legislation is introduced, it can take four to six months before that measure comes to a final vote.

If legislation is passed, the ordinance goes to the mayor, who can generally do one of two things: The mayor can sign the legislation (in which case it becomes law), or the mayor can veto the legislation (in which case it does not). If the mayor does nothing, local and state law likely determine whether that ordinance goes into effect.

Too often, companies affected by local ordinances attend full council meetings, but fail to attend meetings of the relevant committees considering those ordinances. TIP 1: If legislation enacting (or rescinding) a moratorium is referred to a committee, you need to be at the committee meetings. It can be difficult to get full council to override an adverse report from a committee because other council members will want to defer to their colleagues on a committee.

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Educate

TIP 2: When attending council and committee meetings, be prepared to educate members on why cannabis can be beneficial for their community. Members who oppose cannabis will be concerned about increased crime, increased youth use and decreased property values. These are issues that we want our local officials to be concerned about. But there is good news. The data is in your favor on each of these topics.

Crime Concerns:
  • A Cato Institute analysis of cannabis policy shifts in Colorado, published in 2014, found no significant change in murder, aggravated assault, robbery and burglary in Denver after commercialization in 2009, legalization adoption in 2012 or full implementation of legalization in 2014.
  • When border states enacted medical cannabis programs, violent crime fell by 13 percent on average, according to the U.S. study “Is Legal Pot Crippling Mexican Drug Trafficking Organisations? The Effect of Medical Marijuana Laws on U.S. Crime,” whose findings were published in The Guardian in January 2018.
  • There is also evidence to suggest that cannabis businesses do not attract more crime than other businesses, according to the report “Medical Marijuana Dispensaries Not Linked to Neighborhood Crime,” whose findings were published in U.S. News & World Report in June 2012.
Youth-Use Concerns
  • Medical marijuana programs typically do not lead to an increase in teen usage, Forbes contributor Debra Borchardt shared from a Columbia University study published in The Lancet Psychiatry in June 2015.
Public Health Concerns
  • In states with medical cannabis programs, suicide rates for males aged 20 to 29 decreased 10.9 percent, and decreased 9.4 percent for ages 30 to 39, according to a study co-authored by professors from Montana State University, San Diego State University and the University of Colorado at Denver, reported by PBS NewsHour in February 2014.
  • And, annual deaths from prescription drug overdoses are 25-percent lower in states with medical marijuana programs, according to the Johns Hopkins Bloomberg School of Public Health.
  • The reason for that prescription drug overdose decrease may be that prescriptions decreased for painkillers and other drugs for which marijuana may be an alternative. On average, that resulted in 1,826 fewer doses of painkillers per year in legal states, according to the research article “Medical Marijuana Laws Reduce Prescription Medication Use In Medicare Part D,” published by Health Affairs in July 2016.
Property Value Concerns
  • Cannabis legalization can lead to increased commercial and residential real estate values. On the commercial side, cannabis cultivators generally prefer to purchase vacant warehouses in industrial areas, while cannabis dispensaries look to purchase (or lease) vacant storefronts in business districts, according to the November 2017 article “The Budding Impact of Marijuana on Real Estate” published by Poplogix.
  • The same article states that localities with cannabis businesses also tend to see an increase in residential sales as workers move to the area seeking employment. Data also suggests that states with legal cannabis see an increase in home prices, well above the national median.
  • Another finding from the Poplogix article: The main caveat is that residential areas near large cultivation facilities may see a dip in home values due to unavoidable odor from cultivation operations. For this reason, most localities limit cultivation and manufacturing to industrial areas.
Be a resource for local officials when it comes to your state’s cannabis program. Ensure they know you are available to answer any question, whether about your business or the industry.

Persuade

Armed with this information, what is the most effective way to persuade your local government to allow your cannabis company to operate? We find that a multi-pronged approach works best. TIP 3: Talk to the councilperson for the area in which you want to operate. They are the most important person you need to persuade. Get a feel for whether they have preconceived notions about cannabis and have an honest discussion about their concerns. Find out whether any residents have contacted them about cannabis and what their response was.

TIP 4: Talk with local officials on council and in the mayor’s office and loop in the local police chief. Build a rapport with everyone you can so that they feel as if they can trust you. Explain that you want to be a partner in the community and keep the lines of communication open.

TIP 5: Campaign for your company. We have gone door-to-door with clients to talk with residents about what life would be like with a dispensary next door. Many times, apprehension comes from not knowing who wants to do business in the community. Residents are rightfully afraid that some out-of-town company wants to move in and maximize profits sans concern for the community. TIP 6: Explain the data above, as well as the security measures your company will implement to keep the community safe. If you plan to donate to or support local community programs, let them know.

Talk to the councilperson for the area in which you want to operate. They are the most important person you need to persuade.

Be a resource for local officials when it comes to your state’s cannabis program. Ensure they know you are available to answer any question, whether about your business or the industry. TIP 7: Be candid about the unknowns—this is still a relatively new industry, after all.

TIP 8: Don’t be afraid to help local officials craft permanent legislation that would authorize your company to operate. It doesn’t have to be more onerous than state-mandated requirements, but maintaining some semblance of local control may make it more likely that a moratorium will be rescinded or avoided altogether.

The process to address local cannabis moratoriums can be lengthy. It can feel like pushing a boulder up a steep hill. But we have found that by developing relationships at the local level, our clients emerge not only with a more favorable local framework, but with a true operating partner in the local government.

Thomas Haren is an associate at Frantz Ward LLP. He assists clients with license acquisition, regulatory compliance and more. Patrick Haggerty is chair of the Frantz Ward Litigation Practice Group. In 2015, he created the firm’s Cannabis Law and Policy Group. Mark Stockman is an partner at Frantz Ward LLP. His counsels clients through all phases of real estate development and construction.