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HUGUENIN KAHN LLP/HK CANNABIS LAW
RobertJ. Kahn, Esq., State Bar No. 95037
Edward R. Huguenin, Esq., State Bar No. 173653
Ryan P. McGuire, Esq., State Bar No. 292396
rkahn@ hugueninkahn.com
ehuguenin@ hugueninkahn.com E-FILED
rmc
i
uire@
300 Lava
Roseville,
hugueninkahn.com
Ri e Court, Suite 300
CA 661
8/7/2020 11:31 AM
Superior Court of California
Telephone: (916) 367-7098 County of Fresno
Facsimile: (916) 367-7491 By: |. Herrera, Deputy
Attomeys for Amicus Curiae HK CANNABIS LAW on
behalf of Defendants BUREAU OF CANNABIS CONTROL;
and LORI AJAX, Chief of the Bureau
SUPERIOR COURT OF THE STATE OF CALIFORNIA
10 COUNTY OF FRESNO
11
12 COUNTY OF SANTA CRUZ, ET AL., CASE NO. 19CECG01224
13 Plaintiffs, AMICUS CURIAE BRIEF
14 vs. TRIAL DATE: AUGUST 6, 2020
TIME: 8:30 A.M.
15 BUREAU OF CANNABIS CONTROL; LORI DEPT: 502
AJAX, IN HER OFFICIAL CAPACITY AS JUDGE: HON. ROSEMARY T
16 CHIEF OF THE BUREAU OF CANNABIS MCGUIRE
CONTROL, AND DOES 1 THROUGH 10,
17 INCLUSIVE, ACTION FILED: APRIL 4, 2019
18 Defendants.
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TABLE OF CONTENTS
Page
INTRODUCTION
IL PLAINTIFFS’ CONTENTIONS
Il AMICUS’ POSITION
IV STATEMENT OF FACTS
DISCUSSION
A Section 26200(a)(1) Is A Grant Of Only Limited Authority And Does
Not Authorize A Local Jurisdiction To Prohibit The Delivery Of
Cannabis Goods To Persons Within Its Jurisdiction
10 By Its Terms, Section 26200(a)(1)’s Grant Of Authority To A Local
Jurisdiction To Prohibit The Conduct Of A Cannabis Business
11 Extends Only To Licensees Licensed Within That Local Jurisdiction. 15
12 Section 26090(e) Does Not Grant Local Jurisdictions The Authority
To Prevent Deliveries. On Thehe Contrary, It Expressly PrPrevents Them
13 From Doing So .. 18
14 VI SUMMARY 21
15 VIL CONCLUSION 22
16
17
18
19
20
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22
23
24
25
26
27
28
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TABLE OF AUTHORITIES
Page(s,
Cases
Briggs v. Eden Council for Hope & Gpportunity (a99e) ) 1 19 Cal.4th 1106, 1117, 81
Cal.Rptr.2d 471, 969 P.2d 564.. 11, 16
Envil. Def. v. Duke Eneray Corp.. 549 U.S. 561, 575-76, 127 S.Ct. 1423, 167
L.Ed.2d 295 (2007)... 14
Kleffman v. Vonage Holdings Corp. (2010) 49 Cal. 4th 334, 342-43 11
Lockhartv. United States (2016) 136 S. Ct. 958, 962-63. 17
Pakootas v. Teck Cominco Metals, LTD. 830 F.3d 975, 984 (9th Cir. 2016) 14
10 Peoplev. J ones (1988) 46 Cal.3d 585, 596, 250 Cal.Rptr. 635, 758 P.2d 1165 11
11 People v. Leal (2004) 33 Cal.4th 999, 1008, 16 Cal.Rptr.3d 869, 94 P.3d 1071
12 People v. Superior Court (Pearson) (2010) 48 Cal. 4th 564, 571 6, 16
13 Reno v. Baird (1998) 18 Cal.4th 640, 658 16
14 Util. Air Regulatory Grp. v. EPA, — U.S. —, 134 S.Ct. 2427, 2441, 189 L.Ed.2d
372 (2014) 14
15
Wasatch Prop. Mgmt. v. Degrate (2005) 35 Cal. 4th 1111, 1117-18 11
16
Whitev. County of Sacramento (1982) 31 Cal.3d 676, 680 17
17
Statutes
18
26001 (ak) 13
19
26052.4(b) 13
20
26055. (d) 19
21
26070(d) 13
22
Section 26001(ac)
23
Section 26001(dd) 13
24
Section 26001(k) 5, 9, 11
25
Section 26013
26
Section 26055( 19
27
Section 26070(a)(1) 20
28
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TABLE OF AUTHORITIES (cont.
Page(s,
Section 26090(c).... 8
Section 26090(e).... sess 6, 7, 8, 13, 18, 19, 20, 21, 22
Section 26200(a)(1) sessessssesess 0, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 21, 22
Sections 26038(a) ..
Sections 26045(a) .. 13
Regulation:
Regulation 5416(d) 5, 7, 8, 21
10 Regulation and Safety Act (“S.B. 94” or “MAUCRSA”)
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
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I INTRODUCTION
At its core, this action presents an issue of statutory interpretation of an initiative statute that
is as simple as it is narrow. That issue, stripped of the interesting but largely irrelevant history and
genesis of Proposition 64, Senate Bill 94, the regulations of Title 16, and the myriad ordinances
and other extrinsic materials presented by the parties to the court, is whether Section 26200(a)( 1)!
grants a local jurisdiction the authority to prohibit delivery of cannabis goods to persons within
their jurisdictions. If it does not (and it does not), then Regulation 5416(d),? authorizing delivery to
any jurisdiction in California, is not in conflict with Section 26200(a)(1), was lawful when adopted,
10 and Plaintiffs’ request that it be enjoined is without merit and should be denied.
11 Notably, Plaintiffs understand quite well the very words that should have been used in Section
12 26200(a)(1) for it to actually grant local jurisdictions the authority Plaintiffs claim it does. Plaintiffs
13 made the point clearly at 10:15-18 of their Reply Brief:
14 Localities maintain under Section 26200 unfettered local control with
respect to commercial cannabis activity within their borders. That’s
15 what the statute says, and that’s what the voters approved. Regulation
5416(d) cannot stand in view of the plain language of Section 26200,
16
subdivision (a)(1). (Emphasis added.)
17
The problem for Plaintiffs, however, is that Section 26200(a)(1) does not, in fact, say what
18
Plaintiffs say it does. Specifically, and critically, Section 26200(a)(1) does not use the term
19
“commercial cannabis activity” when describing the conduct local jurisdictions may prohibit. As
20
will be discussed, the omission is significant and directly indicates the voters’ intent to limit the
21
authority of local jurisdictions and not enable them to prevent the delivery of cannabis goods.?
22
23
1 Cal. Business and Professions Code.
24
25 2 Section 5416(d), Title 16, Califomia Code of Regulations, referred to herein as “Regulation
5416(d).”
26
27 3 Spoiler Alert: “Commercial cannabis activity” is a defined term (Section 26001(k)) that embraces
a comprehensive list of cannabis-related conduct and, especially pertinent to the case at bar,
28 includes an express reference to “delivery.” Moreover, it cannot reasonably be argued that Section
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The established rules for interpreting an initiative statute are straightforward:
When we interpret an initiative, we apply the same principles governing statutory
construction. We first consider the initiative’s lanquace, aiving the words their
ordinary meaning and construing this lanquaae in the context of the statute and
initiative as a whole. If the lanquage is not ambiquous, we presume the voters
intended the meaning apparent from that lanquage, and we may not add to the
statute or rewrite it to conform to some assumed intent not apparent from that
lanquace. If the lanquage is ambiguous, courts may consider ballot summaries and
arguments in determining the voters’ intent and understanding of a ballot measure.
(People v. Superior Court (Pearson) (2010) 48 Cal. 4th 564, 571.)
Thus, the court’s primary task is to carefully read and consider the statute at issue. Putting
an even finer point on it, Justice Anderson, in a dissent joined by Justice Mosk, instructed that
10 “legislative intent should be discerned from the words actually used — and the words not used — by
11 the Legislature in enacting statutes.” People v. Cruz (1996) 13 Cal.4" 764, 785-86.
12 Consistent with the above-stated rules, and focusing entirely on the language of the two
13 statutes in question while staying within the four corners of the language of the two statutes and the
14 initiative itself, amicus curiae, HK Cannabis Law, (“amicus”) hereby respectfully submits this
15 brief for the Court’s consideration and possible assistance. The brief is being submitted on behalf
16 of the defendants and is based upon amicus’ position that Plaintiffs’ claim is without merit and that
17 both the declaratory and injunctive relief sought should be denied.
18 Il. PLAINTIFFS’ CONTENTIONS
19 Plaintiffs contend that Section 26200(a)(1) grants a local jurisdiction the authority to
20 prohibit the delivery of cannabis goods to persons within theirjurisdictions. Specifically,
21 Plaintiffs contend that under and by virtue of Section 26200(a)(1), and as allegedly confirmed by
22 Section 26090(e), local jurisdictions possess plenary authority to prohibit all commercial cannabis
23 activity, including deliveries, within their jurisdictions. Based upon those contentions, Plaintiffs
24
25
26 26200(a)(1)’s failure to use the term “commercial cannabis activity” was an oversight. It wasn’t.
Both the term and its definition were well known to the voters and the drafters of Section
27 26200(a)(1) because it was used and approved, justa few inches down, in subsection (c) of the
same code section as follows: “A local jurisdiction shall notify the bureau upon revocation of any
28 local license, permit, or authorization for a licensee to engage in commercial cannabis activity
within the local jurisdiction.” Emphasis added.
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claim that Regulation 5416(d), which authorizes the delivery of such goods to “any jurisdiction
within the State of Califomia,” is inconsistent with Plaintiffs’ statutory authority, that the Bureau of
Cannabis Control should not have adopted the regulation, that the regulation is unlawful, and that
its enforcement should be permanently enjoined.
II. AMICUS’ POSITION
Plaintiffs’ assertion that Section 26200(a)(1) grants them the authority to prohibit deliveries
of cannabis goods to persons within their jurisdictions (and that Section 26090(e) confirms this) is
without merit and wrong. The language and structure of Section 26200(a)(1), both alone and in the
context of Section 26200 and Prop. 64 as a whole, demonstrates that section 26200(a)(1)’s grant of
10 authority to a local jurisdiction to prohibit cannabis-related conduct: (a) is limited, not plenary, (b)
11 extends only to “the establishment or operation” of a cannabis business and not to all “commercial
12 cannabis activity”, and (c) extends only to cannabis businesses that are licensed within that local
13 jurisdiction. Separately, by its terms, Section 26090(e) not only does not grant or confirm in local
14 jurisdictions any authority to prevent the delivery of cannabis goods, but it instead specifically
15 imposes an express restriction against a local jurisdiction that seeks to prevent such deliveries when
16 they are being made by a retailer that is in compliance with both state law and the local law of the
17 local jurisdiction in which it is licensed.
18 Thus, contrary to Plaintiffs’ contentions, Section 26200(a)(1) does not grant, and local
19 jurisdictions do not have, the authority to prevent or prohibit the delivery of cannabis goods to
20 persons within their jurisdictions. Regulation 5416(d) is fully consistent with Sections 26200(a)(1)
21 and 26090(e), has at all times been lawful, and Plaintiffs’ claims for declaratory and injunctive
22 relief are without merit and should be denied.
23 Iv. STATEMENT OF FACTS
24 In 2016, California voters approved the initiative measure known as Proposition 64, which
25 became the Control, Regulate and Tax Adult Use of Marijuana Act (“Prop. 64” or “AUMA”).
26 AUMA included Section 26200(a), which, when adopted, read as follows:
27
26200. (a) Nothing in this division shall be interpreted to supersede or limit,
28 the authority of a local jurisdiction to adopt and enforce local ordinances to regulate
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businesses licensed under this division, including, but not limited to, local zoning and
land use requirements, business license requirements, and requirements related to
reducing exposure to secondhand smoke, or to completely prohibit the establishment
or operation of one or more types of businesses licensed under this division within the
local jurisdiction.
In 2017, the Califomia Legislature passed the Medicinal and A dult- Use Cannabis
Regulation and Safety Act (“S.B. 94” or“MAUCRSA”). As a result, section 26200(a) was
amended slightly but not substantively, was renumbered as section 26200(a)(1), and now reads as
follows:
26200. (a)(1) This division shall not be interpreted to supersede or limit the
authority of a local jurisdiction to adopt and enforce local ordinances to regulate
businesses licensed under this division, including, but not limited to, local zoning and
10 land use requirements, business license requirements, and requirements related to
reducing exposure to secondhand smoke, or to completely prohibit the establishment
11
or operation of one or more types of businesses licensed under this division within the
12 local jurisdiction.
13 In 2016, AUMA also included Section 26090(c), which, when adopted, read as follows:
14 26090. (c) A local jurisdiction shall not prevent delivery of marijuana or
marijuana products on public roads by a licensee acting in compliance with this
15 division and local law as adopted under Section 26200.
16
In 2017, section 26090(c) was amended slightly but not substantively, was renumbered as
17
section 26090(e), and now reads as follows:
18
26090. (e) A local jurisdiction shall not prevent delivery of cannabis or
19 cannabis products on public roads by a licensee acting in compliance with this
division and local law as adopted under Section 26200.
20
In January 2019, in accordance with Section 26013, the Bureau of Cannabis Control
21
adopted a comprehensive set of regulations to address multiple issues involved in the
22
implementation of California’s cannabis laws. Among them is Section 5416(d), the regulation
23
Plaintiffs are challenging by this action, which reads as follows:
24
5416. (d) A delivery employee may deliver to any jurisdiction within the
25 State of Califomia provided that such delivery is conducted in compliance with all
26 delivery provisions of this division.
27 Plaintiffs are a group of local jurisdictions, with “local jurisdiction” being defined as “a
28 city, county, or city and county.” (Section 26001(ac).)
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“Commercial cannabis activity” is a defined term that “includes the cultivation, possession,
manufacture, distribution, processing, storing, laboratory testing, packaging, labeling,
transportation, delivery, or sale of cannabis and cannabis products as provided for in this division. ”
(Section 26001(k). (Emphasis added.)
Throughout Division 10 (Cannabis) of the Business and Professions Code, the term “this
division” is used to refer to the code sections that comprise Division 10. (Section 26000(a).)
Vv DISCUSSION
A Section 26200(a)(1) Is A Grant Of Only Limited Authority And Does Not
Authorize A Local Jurisdiction To Prohibit The Delivery Of Cannabis Goods
10 To Persons Within Its J urisdiction.
11 To understand that Section 26200(a)(1) grants only limited authority to local jurisdictions to
12 prohibit conduct related to cannabis businesses within their jurisdictions, it is helpful to consider
13 key aspects of the subsection and to do so in the context of well-established rules of statutory
14 interpretation. It may also be helpful, for demonstrative and illustrative purposes only, to recast the
15 statute in the manner that Plaintiffs appear to be reading it, or that it must read, for Plaintiffs to
16 have a meritorious claim.*
17 When interpreting a statute, it is necessary to have its terms well in mind. For convenience,
18 therefore, we repeat the language of Section 26200(a)(1) here, noting that it is comprised of two
19
“prongs,” as more fully discussed and examined below:
20
26200. (a)(1) This division shall not be interpreted to supersede or limit the
21 authority of a local jurisdiction to adopt and enforce local ordinances to regulate
businesses licensed under this division, including, but not limited to, local zoning and
22 land use requirements, business license requirements, and requirements related to
reducing exposure to secondhand smoke, or to completely prohibit the establishment
23
or operation of one or more types of businesses licensed under this division within the
24 local jurisdiction. (Emphasis added.)
25
26 4 As the Supreme Court has emphasized, however, the judiciary’s role in determining
27 h
the meaning of a statute “ ‘ “is simpl to ascertain and declare what is in terms or in substance
contained erein, not to insert what ‘as been omitted or omit what has been inserted ....”
[Citation.] We may not, under the guise of construction, rewrite the law or give the words an effect
28 different from the plain and direct import of the terms used.’ [Citation.]” (People v. Leal (2004) 33
Cal.4th 999, 1008, 16 Cal.Rptr.3d 869, 94 P.3d 1071.)
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Focused on the words used and not used by the drafters of Section 26200(a)(1), and as
approved by the voters, amicus respectfully offers the following observations regarding subsection
(a)(1) of the statute:
e The first prong concems a local jurisdiction’s authority “to regulate”
The second prong describes the scope and extent of a local jurisdiction’s
authority “to prohibit”
The second prong identifies the cannabis business conduct that a local
jurisdiction may prohibit and does so using the words “the establishment or
operation of”
Neither prong makes reference to or uses the term “commercial cannabis
10 activity”
11 Unlike Section 26200(a)(1), subsection (c) of section 26200 does make
reference to and use the term “commercial cannabis activity”
12
13 The first prong does not include the phrase “within the local jurisdiction”
whereas the second prong does, placing it after the words “licensed under this
14 division,” not after either the words “prohibit” or “the establishment or
operation”
15
The second prong ends thus with the words “licensed under this division
16
within the local jurisdiction”
17
Neither subsection (a)(2) nor (b) of section 26200 use or include the phrase
18 “within the local jurisdiction”
19 While Section 26200(c) does use the phrase “within the local jurisdiction” it
20 does so in conjunction with words referencing local licensing, specifically “a
license to engage in commercial cannabis activity within the local
21 jurisdiction”
22
Notwithstanding that Section 26200(a)(1) omits the term “commercial cannabis activity” in
23
24 || both of its two prongs, Plaintiffs nevertheless assert in their Trial Brief at 9:9-10 that:
25 “{iJn approving Prop. 64 in 2016, California’s voters expressly protected the existing
regulatory authority of cities and counties over commercial cannabis activity.”
26
(Bold emphasis added, standard emphasis in original.) And, as noted above, they make the
27
28 | following proclamation in their Reply Trial Brief at 10:15-17:
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Localities maintain under Section 26200 unfettered local control
with respect to commercial cannabis activity within their borders.
That’s what the statute says, and that’s what the voters approved.
(Bold emphasis added.)
But, as should be now be quite clear, Section 26200(a)(1) does not say what Plaintiffs say it}
does - it never uses nor makes reference to the term “commercial cannabis activity.” Instead, the
subsection only refers to a local jurisdiction’s authority to prohibit “the establishment or operation
of” a cannabis business and, even then, only those that are licensed within that local jurisdiction.
Why is this significant? Because there is a material difference between the phrase “the
10 establishment or operation of” a cannabis business, meaning the “formation” or later “running” of
11
that business, and the defined term “commercial cannabis activity”, which is broadly defined at
12
Section 26001(k) to specifically include “delivery” in its definition.
13
It is also significant because, to ignore the fact that the term “commercial cannabis activity”
14
was omitted from subsection (a)(1), while it was contemporaneously included in subsection (c) of
15
16 the same code section, would contravene a fundamental rule of statutory construction. As the
17 California Supreme Court has said:
18 This approach contravenes the principle that “when different words are used in
19 contemporaneously enacted, adjoining subdivisions of a statute, the inference is
compelling that a difference in meaning was intended.” (People v. J ones (1988) 46
20 Cal.3d 585, 596, 250 Cal.Rptr. 635, 758 P.2d 1165, italics omitted; see also Briggs v.
Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1117, 81 Cal.Rptr.2d
21 471, 969 P.2d 564 [“[w]here different words or phrases areusedin the same
connection **631 in different parts of astatute, it is presumed the Legislature
22 intended a different meaning”].)
2
(Kleffman v. Vonage Holdings Corp. (2010) 49 Cal. 4th 334, 342-43, emphasis added.)
24
Moreover, and again from the Supreme Court:
25
“TW Jhen the Legislature has carefully employed a term in one place and has excluded
26
it in another, it should not be implied where excluded.’ “ (Citations.)
2
(Wasatch Prop. Mgmt. v. Degrate (2005) 35 Cal. 4th 1111, 1117-18, as modified (July 27, 2005),
28 emphasis added.)
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Accordingly, under these well-established and logical rules, there is no question but that the
term “the establishment or operation of” has a different (and more limited) meaning than the defined
term “commercial cannabis activity,” with the latter being comprehensive and making specific
reference to “delivery.” Nor under the circumstances, and according to the Supreme Court, may the
term “commercial cannabis activity” even be “implied” in Section 26200(a)(1). That said, had the
drafters or the voters intended that local jurisdictions be granted the authority to prohibit the delivery
of cannabis goods within their jurisdictions, there is no question but that the term “commercial
cannabis activity” would have been used in Section 26200(a)(1). Plaintiffs understand this, clearly
10 agree with it, and have argued it, but their argument lacks support from the most importance source
11
and indication of voter intent...Section 26200(a)(1) itself.
12
To further illustrate the point, had the voters intended that local jurisdictions have the
13
authority to prohibit the delivery of cannabis goods to persons within their jurisdictions, the actual
14
language of the statute, in relevant part, would not have been written and approved as follows...
15
16 26200. (a)(1) ***, or to completely prohibit the establishment or operation of one or
more types of businesses licensed under this division within the local jurisdiction.
17
...but would instead have been written and approved as follows...
18
19 26200. (a)(1) ***, or to completely prohibit commercial cannabis activity within
the local jurisdiction.
20
But the latter variant is not what the drafters wrote nor what the voters approved. Instead,
21
Section 26200(a)(1), as written and approved, omitted the term “commercial cannabis activity” in
22
subsection (a)(1), while contemporaneously using it in subsection (c). In so doing, the drafters and
23
voters manifested their clear intent not to empower local jurisdictions with the authority to prohibit
24
all commercial cannabis activity, including but not limited to “delivery.”5
25
26
5 And, indeed, this is fully consistent with what the voters were told b' y the Legis slative Analyst in
27 the 2016 Official V oter Information Guide for Prop. 64. There, in words no ly devoid of any
qualifiers, conditions, exceptions, or equivocation, the Legislative Analyst explained that the intent
28 of Prop. 64 was that “adults age 21 and over would be able to purchase marijuana at state licensed
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Understandably stymied by the drafters’ choice of terms in Section 26200(a)(1), and the
voters’ approval of them, Plaintiffs have also pursued a fallback position, this one attempting to
endow the word “operation”, as used in Section 26200(a)(1), with a technical meaning that it was
clearly not intended to have. ® The effort fails for several reasons.
First, it is clear from Section 26200(a)(1) that the word “operation” was used in its ordinary
non-statutorily defined sense, namely, meaning “to run”, “function”, or “be active.” Nor is this the
only time or place where the word “operation” was or is used in its ordinary sense. For example, in
a contemporaneous use made in Prop. 64’s original definition of “Unreasonably impracticable,”
10 which appeared in the approved initiative at Section 26001(dd), the word “operation” is similarly
11
used in its ordinary sense, there to mean “running” a cannabis business
12
26001. (dd) “Unreasonably impracticable” means that the measures necessary to
13 comply with the regulations require such a high investment of risk, money, time, or
any other resource or asset, that the operation of a marijuana establishment is not
14 worthy of being carried out in practice by a reasonably prudent business person.
15
16 There are also other instances in Division 10 (Prop. 64 and S.B. 94) where the word
17 “operation” is used in its ordinary sense. For example, see Sections 26045(a) and (f) [“operation or
18 execution” of an order], 26055(c) [“business operation’”], and 26070(d) [‘operation” of vehicles”].)
19 For instances where the term is used in its technical and defined sense, see Sections 26038(a) “each
20 day of operation shall constitute a separate violation”], 26052.4(b) [‘‘prior operation in the local
21 jurisdiction”) and 26052.4(c) [“operation in compliance”].)
22
23
24
25
th
businesses or throu h their delivery services.” (Official Guide at p. 92.) Not coincidentally,
those are precisely e rights implemented and protected by Sections 26200(a)(1) and 26090(e).
26
27 6 “Operation, as defined in Section 26001(ak), “means any act for which licensure is required under
the provisions of this division, or any commercial transfer of cannabis or cannabis products.” In
28 Prop. 64, the definition appeared at section 26001(w) and was similarly defined, the only difference
being the “marijuana” was used in place of “cannabis”.
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Nor is it unusual for a word or term otherwise defined in a statute to also be used in a non-
defined manner elsewhere in the statute. When that occurs, the nule is that the presumption of
consistent usage readily yields to context. As the Ninth Circuit recently noted in Pakootas v. Teck
Cominco Metals, LTD. 830 F.3d 975, 984 (9th Cir. 2016)
The Supreme Court teaches that, even when the same word is used in different
provisions of the same statute, the word does not necessarily have to be interpreted
identically. Envtl. Def. v. Duke Energy Corp., 549 U.S. 561, 575-76, 127 S.Ct. 1423,
167 L.Ed.2d 295 (2007). Rather, “the presumption of consistent usage ‘readily yields
to context, and a statutory term—even one defined in the statute—’may take on
distinct characters from association with distinct statutory objects calling for different
implementation strategies.’ ” Util. Air Regulatory Grp. v. EPA, —_ U.S. —, 134
S.Ct. 2427, 2441, 189 L.Ed.2d 372 (2014) (quoting Duke Energy Corp., 549 U.S. at
10 574, 127 S.Ct. 1423)
11
12 In Section 26200(a)(1), the word “operation” was used in its ordinary sense, as was the
13 accompanying word “establishment.”’ Given the plain meaning and ordinary usage of the words
14 the phrase “the establishment or operation of” is simply a way of denoting, first, the formation or
15
starting of a business and, second, the running of it thereafter. Thus, under Section 26200(a)(1)
16
local jurisdiction could prohibit the formation or start-up of a cannabis business within its
17
jurisdiction, or, once formed or started up, the local jurisdiction could shut it down.
18
Had the drafters and voters intended that local jurisdictions be authorized to prohibit the
19
20 delivery of cannabis goods to persons within their jurisdictions, Section 26200(a)(1) would have said
21 so. It could have done it by using the word “delivery”, which already had a code section of its own
22 in section 26090(e). Or it could have done it by using the term “commercial cannabis activity,” a
23
term well known to the drafters and voters (it was, in fact, used and approved in subsection (c) of
24
25
7 With regard to the ordinary meaning of the words “establishment” and “operation”, The New
c
26 Oxford A merican Dictionary (2001), at pa fe 580, defines “establishment” as “the action of
establishing ‘Something or being establishe ’ and defines “establish” as “set up” as in “to initiate or
27 bring about.” The same dictionary, at page 1200, defines “operation” as “the fact or condition of
functioning or being active” with the usage example being “the construction and operation of
28 power stations.” It is difficult to imagine more precisely applicable definitions for the words “the
establishment or operation of” as they appear and were used in Section 26200(a)(1)
14
AMICUS CURIAE BRIEF
Section 26200) whose definition expressly referred to and incorporated the conduct of “delivery.”
Or it could have been done by using the word “operation” in its technical sense, rather than in its
ordinary sense. But none of these things occurred because the voters never intended Section
26200(a)(1) to authorize local jurisdictions to be able to prohibit the delivery of cannabis goods to
persons in their jurisdictions.
B. By Its Terms, Section 26200(a)(1)‘s Grant Of Authority To A Local
Jurisdiction To Prohibit The Conduct Of A Cannabis Business Extends Only
To Licensees Licensed Within That Local Jurisdiction.
Having discussed that the term “commercial cannabis activity” was deliberately not used in
10
11 the second prong of Section 26200(a)(1), and that the word “operation” was only used in its ordinary
12 sense, both of which negate Plaintiffs’ claims of plenary power to prohibit all “commercial cannabis
13 activity” in their jurisdictions, including the delivery of cannabis goods, we tum now to a discussion
14
of the words of the second prong that fundamentally limit the reach of a local jurisdiction’s authority
15
to prohibit conduct only to those businesses that are licensed within that local jurisdiction. They are
16
the words “...licensed under this division within the local jurisdiction.”
17
18 Amicus respectfully submits that these words should be understood to mean what they say in
19 their ordinary sense and that, in accordance with fundamental rules of statutory construction, they
20 are not merely surplusage or placed in the subsection just to state the obvious, i.e., that Section
21 26200(a)(1), as does Section 26200 as a whole, relates to matters of a local nature. Rather, amicus
22
submits that the term was used, and placed where it was placed, in order to provide that a local
23
jurisdiction’s authority to prohibit the actions of a cannabis business extends only to those businesses
24
that are located and licensed within that jurisdiction. Said differently, given the words and their
25
26 placement, i.e., immediately following the reference to businesses “licensed” under the division, the
27 intent is that a local jurisdiction does not have the authority to prohibit the activities of licensees
28 located in and licensed within other local jurisdictions.
AMICUS CURIAE BRIEF
As the California Supreme Court has instructed, “Courts should give meaning to every
word of a statute if possible, and should avoid a construction making any word surplusage.” Briggs
v. Eden Council for Hope & Opportunity (1999) 19 Cal. 4th 1106, 1117~18, citing Reno v.
Baird (1998) 18 Cal.4th 640, 658. Therefore, the phrase “within the local jurisdiction” is presumed
to have an intended meaning and purpose. By its own terms, and even its title, Section 26200
clearly relates to matters occurring within or pertaining to a local jurisdiction. Because of that, it
would not have been necessary to add the phrase “within the local jurisdiction” if its purpose was
to simply inform the reader that the subsection relates to local matters. To illustrate the point by
comparison, subsections (a)(2) and (b) of Section 26200 also necessarily relate to local issues but,
10 as may be seen, neither of them includes the term “within the local jurisdiction.”
11 Recalling the Supreme Court’s guidance relative to the interpretation of an initiative statute,
12 a court must “first consider the initiative’s language, giving the words their ordinary meaning and
13
construing this language in the context of the statute and initiative as a whole.” (People v. Superior
14
Court (Pearson) (2010) 48 Cal. 4th 564, 571.) It is clear, therefore, that “context” is important and
15
amicus respectfully submits that it is indeed significant to this analysis here.
16
Specifically, with regard to context and placement of the qualifying phrase “within the local
17
18 jurisdiction” in Section 26200(a)(1), while the phrase could have been placed either immediately
19 after the word “prohibit”, or the phrase “the establishment or operation,” it was not. Had such
20 alternative placement been used, the second prong would have effectively described the geographic
21
locale in which a local jurisdiction’s prohibitory authority could be exercised, but the qualifying
22
phrase would not have thereby implicated the word “licensed.” For example, the two options would
23
have read in pertinent part, as follows:
24
25 Option 1:
26 26200. (a)(1) ..., or to completely prohibit within the local jurisdiction the
establishment or operation of one or more types of businesses licensed under this division.
27
Option 2:
28
- 16-
AMICUS CURIAE BRIEF
26200. (a)(1) ..., or to completely prohibit the establishment or operation within the
local jurisdiction of one or more types of businesses licensed under this division.
But neither of those options were selected. Instead, the qualifying phrase was placed
immediately after the words “licensed under this division.” As such, the actual placement was as
follows:
Actual placement:
26200. (a)(1) ..., or to completely prohibit the establishment or operation of one or
more types of businesses licensed under this division within the local jurisdiction.
This is significant for at least three reasons. First, although the first prong does include the
10
phrase “licensed under this division,” it does not also include the qualifying phrase “within the local
11
jurisdiction.” Second, when addressing a local jurisdiction’s authority to prohibit in the second
12
prong, the words “licensed within this division” are immediately followed by the qualifying phrase
13
“within the local jurisdiction,” thereby ending the second prong with words whose ordinary meaning
14
indicate an intent to limit a local jurisdiction’s prohibitory authority only to those businesses that are
15
licensed within that local jurisdiction.
16
Third, were the last antecedent rule of statutory interpretation to be applied, which provides
17
that “‘qualifying words, phrases and clauses are to be applied to the words or phrases immediately
18
preceding and are not to be construed as extending to or including others more remote...’ “, that,
19
would again confirm, just as the plain meaning and actual placement of the words do, that the
20
qualifying phrase “within the local jurisdiction” is appropriately to be applied to the phrase
21
immediately preceding it, namely, “licensed under this division.” (See White v. County of
22
Sacramento (1982) 31 Cal.3d 676, 680, and Lockhart v. United States (2016) 136 S. Ct. 958, 962—
23
63.) Either way, the language of Section 26200(a)(1) makes clear that a local jurisdiction’s authority
24
to prohibit conduct, under the second prong of Section 26200(a)(1), only extends to businesses that
25
are licensed within that local jurisdiction and not to businesses that are not.
26
For the reasons noted above, not only does Section 26200(a)(1) not empower a local
27
jurisdiction to prohibit delivery of cannabis goods within its borders, but whatever prohibitory power
that is afforded by Section 26200(a)(1) only extends to those businesses that are actually licensed
-17-
AMICUS CURIAE BRIEF
within its jurisdiction. Accordingly, and as the discussion regarding Section 26090(e) in Part C of
this brief underscores, Section 26200(a)(1) does not grant a local jurisdiction the authority to prohibit
delivery of cannabis goods being made by a retailer that is not licensed within that local jurisdiction
but is licensed and acting in compliance with the local law of a different local jurisdiction where its
premises are located and licensed.
Cc Section 26090(e) Does Not Grant Local J urisdictions The Authority To Prevent
Deliveries. On The Contrary, It Expressly Prevents Them From Doing So.
Section 26090(e) provides that so long as the delivery of cannabis goods are being made by
a licensee (a retailer) acting in compliance with both state cannabis law under Division 10 and “local
10 law as adopted under Section 26200”, then a local jurisdiction “shall not prevent” that delivery from
11 taking place. Specifically, Section 26090(e) provides:
12 26090. (e) A local jurisdiction shall not prevent delivery of cannabis or
cannabis products on public roads by a licensee acting in compliance
13 with this division and local law as adopted under Section 26200.
14
15 According to Plaintiffs, the reference to “local law” in Section 26090(e) is necessarily a
16 reference to the local law of the local jurisdiction seeking to prevent delivery (meaning Plaintiffs)
17 and is, therefore, a confirmation of the grant of authority to prohibit that Plaintiffs contend Section
18 26200(a)(1) affords them. Once again, Plaintiffs are wrong and they are wrong for three
19 independent reasons.
20 First, as discussed in detail above, Section 26200(a)(1) does not by its terms grant a local
21 jurisdiction the authority to prohibit the delivery of cannabis goods. It could have, had the term
22 “commercial cannabis activity” or the word “delivery” been used, but they were not.
23 Second, whatever prohibitory authority Section 26200(a)(1) does grant to a local jurisdiction,
24 that authority extends only to those businesses that are licensed within that local jurisdiction. That,
25 amicus submits, is the plain meaning of the words “licensed under this division within the local
26 jurisdiction,” as they were used and approved in the second prong of Section 26200(a)(1).
Third, in their reading of Section 26090(e), Plaintiffs make a leap, bom of an assumption,
27
28 and reach an erroneous conclusion. Specifically, Plaintiffs assume that the reference to “local law”
- 18-
AMICUS CURIAE BRIEF
in Section 26090(e) is necessarily a reference to “their” local law, or to the local law of alike-minded
local jurisdiction that seeks to prohibit the sale and delivery of cannabis goods to its residents. But
there is nothing in Section 26090(e) to support either that assumption or conclusion and both are
undermined by the initiative itself.
As originally passed and adopted, Prop. 64 contained provisions recognizing that licensees
(such as retailers) would have premises from which their business operations would be conducted.
For example, when Prop. 64 was adopted, its Section 26055(c) imposed a license requirement “for|
each of the premises of any licensee having more than one location...”:
10 26055. (c) Separate licenses shall be issued for each of the premises
of any licensee having more than one location, except as otherwise
11
authorized by law or regulation.
12
In addition, original section 26055 also included subsection (d), which imposed
13
modification restrictions on licensees concerning their business locations and, by its terms, fully
14
acknowledged and anticipated that licensees would be conducting their business operations from a
15
physical location and premises:
16
26055. (d) After issuance or transfer of a license, no licensee shall
17 change or alter the premises in a manner which materially or
substantively alters the premises, the usage of the premises, or the
18 mode or character of business operation conducted from the
19 premises, from the plan contained in the diagram on file with the
application, unless and until prior written assent of the licensing
20 authority or bureau has been obtained. For purposes of this section,
Preview
HUGUENIN KAHN LLP/HK CANNABIS LAW RobertJ. Kahn, Esq., State Bar No. 95037 Edward R. Huguenin, Esq., State Bar No. 173653 Ryan P. McGuire, Esq., State Bar No. 292396 rkahn@ hugueninkahn.com ehuguenin@ hugueninkahn.com E-FILED rmc i uire@ 300 Lava Roseville, hugueninkahn.com Ri e Court, Suite 300 CA 661 8/7/2020 11:31 AM Superior Court of California Telephone: (916) 367-7098 County of Fresno Facsimile: (916) 367-7491 By: |. Herrera, Deputy Attomeys for Amicus Curiae HK CANNABIS LAW on behalf of Defendants BUREAU OF CANNABIS CONTROL; and LORI AJAX, Chief of the Bureau SUPERIOR COURT OF THE STATE OF CALIFORNIA 10 COUNTY OF FRESNO 11 12 COUNTY OF SANTA CRUZ, ET AL., CASE NO. 19CECG01224 13 Plaintiffs, AMICUS CURIAE BRIEF 14 vs. TRIAL DATE: AUGUST 6, 2020 TIME: 8:30 A.M. 15 BUREAU OF CANNABIS CONTROL; LORI DEPT: 502 AJAX, IN HER OFFICIAL CAPACITY AS JUDGE: HON. ROSEMARY T 16 CHIEF OF THE BUREAU OF CANNABIS MCGUIRE CONTROL, AND DOES 1 THROUGH 10, 17 INCLUSIVE, ACTION FILED: APRIL 4, 2019 18 Defendants. 19 /// 20 /// 21 /// 22 /// 23 /// 24 /// 25 /// 26 /// 27 /// 28 /// -1- AMICUS CURIAE BRIEF TABLE OF CONTENTS Page INTRODUCTION IL PLAINTIFFS’ CONTENTIONS Il AMICUS’ POSITION IV STATEMENT OF FACTS DISCUSSION A Section 26200(a)(1) Is A Grant Of Only Limited Authority And Does Not Authorize A Local Jurisdiction To Prohibit The Delivery Of Cannabis Goods To Persons Within Its Jurisdiction 10 By Its Terms, Section 26200(a)(1)’s Grant Of Authority To A Local Jurisdiction To Prohibit The Conduct Of A Cannabis Business 11 Extends Only To Licensees Licensed Within That Local Jurisdiction. 15 12 Section 26090(e) Does Not Grant Local Jurisdictions The Authority To Prevent Deliveries. On Thehe Contrary, It Expressly PrPrevents Them 13 From Doing So .. 18 14 VI SUMMARY 21 15 VIL CONCLUSION 22 16 17 18 19 20 21 22 23 24 25 26 27 28 -2 AMICUS CURIAE BRIEF TABLE OF AUTHORITIES Page(s, Cases Briggs v. Eden Council for Hope & Gpportunity (a99e) ) 1 19 Cal.4th 1106, 1117, 81 Cal.Rptr.2d 471, 969 P.2d 564.. 11, 16 Envil. Def. v. Duke Eneray Corp.. 549 U.S. 561, 575-76, 127 S.Ct. 1423, 167 L.Ed.2d 295 (2007)... 14 Kleffman v. Vonage Holdings Corp. (2010) 49 Cal. 4th 334, 342-43 11 Lockhartv. United States (2016) 136 S. Ct. 958, 962-63. 17 Pakootas v. Teck Cominco Metals, LTD. 830 F.3d 975, 984 (9th Cir. 2016) 14 10 Peoplev. J ones (1988) 46 Cal.3d 585, 596, 250 Cal.Rptr. 635, 758 P.2d 1165 11 11 People v. Leal (2004) 33 Cal.4th 999, 1008, 16 Cal.Rptr.3d 869, 94 P.3d 1071 12 People v. Superior Court (Pearson) (2010) 48 Cal. 4th 564, 571 6, 16 13 Reno v. Baird (1998) 18 Cal.4th 640, 658 16 14 Util. Air Regulatory Grp. v. EPA, — U.S. —, 134 S.Ct. 2427, 2441, 189 L.Ed.2d 372 (2014) 14 15 Wasatch Prop. Mgmt. v. Degrate (2005) 35 Cal. 4th 1111, 1117-18 11 16 Whitev. County of Sacramento (1982) 31 Cal.3d 676, 680 17 17 Statutes 18 26001 (ak) 13 19 26052.4(b) 13 20 26055. (d) 19 21 26070(d) 13 22 Section 26001(ac) 23 Section 26001(dd) 13 24 Section 26001(k) 5, 9, 11 25 Section 26013 26 Section 26055( 19 27 Section 26070(a)(1) 20 28 -3 AMICUS CURIAE BRIEF TABLE OF AUTHORITIES (cont. Page(s, Section 26090(c).... 8 Section 26090(e).... sess 6, 7, 8, 13, 18, 19, 20, 21, 22 Section 26200(a)(1) sessessssesess 0, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 21, 22 Sections 26038(a) .. Sections 26045(a) .. 13 Regulation: Regulation 5416(d) 5, 7, 8, 21 10 Regulation and Safety Act (“S.B. 94” or “MAUCRSA”) 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -4- AMICUS CURIAE BRIEF I INTRODUCTION At its core, this action presents an issue of statutory interpretation of an initiative statute that is as simple as it is narrow. That issue, stripped of the interesting but largely irrelevant history and genesis of Proposition 64, Senate Bill 94, the regulations of Title 16, and the myriad ordinances and other extrinsic materials presented by the parties to the court, is whether Section 26200(a)( 1)! grants a local jurisdiction the authority to prohibit delivery of cannabis goods to persons within their jurisdictions. If it does not (and it does not), then Regulation 5416(d),? authorizing delivery to any jurisdiction in California, is not in conflict with Section 26200(a)(1), was lawful when adopted, 10 and Plaintiffs’ request that it be enjoined is without merit and should be denied. 11 Notably, Plaintiffs understand quite well the very words that should have been used in Section 12 26200(a)(1) for it to actually grant local jurisdictions the authority Plaintiffs claim it does. Plaintiffs 13 made the point clearly at 10:15-18 of their Reply Brief: 14 Localities maintain under Section 26200 unfettered local control with respect to commercial cannabis activity within their borders. That’s 15 what the statute says, and that’s what the voters approved. Regulation 5416(d) cannot stand in view of the plain language of Section 26200, 16 subdivision (a)(1). (Emphasis added.) 17 The problem for Plaintiffs, however, is that Section 26200(a)(1) does not, in fact, say what 18 Plaintiffs say it does. Specifically, and critically, Section 26200(a)(1) does not use the term 19 “commercial cannabis activity” when describing the conduct local jurisdictions may prohibit. As 20 will be discussed, the omission is significant and directly indicates the voters’ intent to limit the 21 authority of local jurisdictions and not enable them to prevent the delivery of cannabis goods.? 22 23 1 Cal. Business and Professions Code. 24 25 2 Section 5416(d), Title 16, Califomia Code of Regulations, referred to herein as “Regulation 5416(d).” 26 27 3 Spoiler Alert: “Commercial cannabis activity” is a defined term (Section 26001(k)) that embraces a comprehensive list of cannabis-related conduct and, especially pertinent to the case at bar, 28 includes an express reference to “delivery.” Moreover, it cannot reasonably be argued that Section -5- AMICUS CURIAE BRIEF The established rules for interpreting an initiative statute are straightforward: When we interpret an initiative, we apply the same principles governing statutory construction. We first consider the initiative’s lanquace, aiving the words their ordinary meaning and construing this lanquaae in the context of the statute and initiative as a whole. If the lanquage is not ambiquous, we presume the voters intended the meaning apparent from that lanquage, and we may not add to the statute or rewrite it to conform to some assumed intent not apparent from that lanquace. If the lanquage is ambiguous, courts may consider ballot summaries and arguments in determining the voters’ intent and understanding of a ballot measure. (People v. Superior Court (Pearson) (2010) 48 Cal. 4th 564, 571.) Thus, the court’s primary task is to carefully read and consider the statute at issue. Putting an even finer point on it, Justice Anderson, in a dissent joined by Justice Mosk, instructed that 10 “legislative intent should be discerned from the words actually used — and the words not used — by 11 the Legislature in enacting statutes.” People v. Cruz (1996) 13 Cal.4" 764, 785-86. 12 Consistent with the above-stated rules, and focusing entirely on the language of the two 13 statutes in question while staying within the four corners of the language of the two statutes and the 14 initiative itself, amicus curiae, HK Cannabis Law, (“amicus”) hereby respectfully submits this 15 brief for the Court’s consideration and possible assistance. The brief is being submitted on behalf 16 of the defendants and is based upon amicus’ position that Plaintiffs’ claim is without merit and that 17 both the declaratory and injunctive relief sought should be denied. 18 Il. PLAINTIFFS’ CONTENTIONS 19 Plaintiffs contend that Section 26200(a)(1) grants a local jurisdiction the authority to 20 prohibit the delivery of cannabis goods to persons within theirjurisdictions. Specifically, 21 Plaintiffs contend that under and by virtue of Section 26200(a)(1), and as allegedly confirmed by 22 Section 26090(e), local jurisdictions possess plenary authority to prohibit all commercial cannabis 23 activity, including deliveries, within their jurisdictions. Based upon those contentions, Plaintiffs 24 25 26 26200(a)(1)’s failure to use the term “commercial cannabis activity” was an oversight. It wasn’t. Both the term and its definition were well known to the voters and the drafters of Section 27 26200(a)(1) because it was used and approved, justa few inches down, in subsection (c) of the same code section as follows: “A local jurisdiction shall notify the bureau upon revocation of any 28 local license, permit, or authorization for a licensee to engage in commercial cannabis activity within the local jurisdiction.” Emphasis added. -6- AMICUS CURIAE BRIEF claim that Regulation 5416(d), which authorizes the delivery of such goods to “any jurisdiction within the State of Califomia,” is inconsistent with Plaintiffs’ statutory authority, that the Bureau of Cannabis Control should not have adopted the regulation, that the regulation is unlawful, and that its enforcement should be permanently enjoined. II. AMICUS’ POSITION Plaintiffs’ assertion that Section 26200(a)(1) grants them the authority to prohibit deliveries of cannabis goods to persons within their jurisdictions (and that Section 26090(e) confirms this) is without merit and wrong. The language and structure of Section 26200(a)(1), both alone and in the context of Section 26200 and Prop. 64 as a whole, demonstrates that section 26200(a)(1)’s grant of 10 authority to a local jurisdiction to prohibit cannabis-related conduct: (a) is limited, not plenary, (b) 11 extends only to “the establishment or operation” of a cannabis business and not to all “commercial 12 cannabis activity”, and (c) extends only to cannabis businesses that are licensed within that local 13 jurisdiction. Separately, by its terms, Section 26090(e) not only does not grant or confirm in local 14 jurisdictions any authority to prevent the delivery of cannabis goods, but it instead specifically 15 imposes an express restriction against a local jurisdiction that seeks to prevent such deliveries when 16 they are being made by a retailer that is in compliance with both state law and the local law of the 17 local jurisdiction in which it is licensed. 18 Thus, contrary to Plaintiffs’ contentions, Section 26200(a)(1) does not grant, and local 19 jurisdictions do not have, the authority to prevent or prohibit the delivery of cannabis goods to 20 persons within their jurisdictions. Regulation 5416(d) is fully consistent with Sections 26200(a)(1) 21 and 26090(e), has at all times been lawful, and Plaintiffs’ claims for declaratory and injunctive 22 relief are without merit and should be denied. 23 Iv. STATEMENT OF FACTS 24 In 2016, California voters approved the initiative measure known as Proposition 64, which 25 became the Control, Regulate and Tax Adult Use of Marijuana Act (“Prop. 64” or “AUMA”). 26 AUMA included Section 26200(a), which, when adopted, read as follows: 27 26200. (a) Nothing in this division shall be interpreted to supersede or limit, 28 the authority of a local jurisdiction to adopt and enforce local ordinances to regulate -7- AMICUS CURIAE BRIEF businesses licensed under this division, including, but not limited to, local zoning and land use requirements, business license requirements, and requirements related to reducing exposure to secondhand smoke, or to completely prohibit the establishment or operation of one or more types of businesses licensed under this division within the local jurisdiction. In 2017, the Califomia Legislature passed the Medicinal and A dult- Use Cannabis Regulation and Safety Act (“S.B. 94” or“MAUCRSA”). As a result, section 26200(a) was amended slightly but not substantively, was renumbered as section 26200(a)(1), and now reads as follows: 26200. (a)(1) This division shall not be interpreted to supersede or limit the authority of a local jurisdiction to adopt and enforce local ordinances to regulate businesses licensed under this division, including, but not limited to, local zoning and 10 land use requirements, business license requirements, and requirements related to reducing exposure to secondhand smoke, or to completely prohibit the establishment 11 or operation of one or more types of businesses licensed under this division within the 12 local jurisdiction. 13 In 2016, AUMA also included Section 26090(c), which, when adopted, read as follows: 14 26090. (c) A local jurisdiction shall not prevent delivery of marijuana or marijuana products on public roads by a licensee acting in compliance with this 15 division and local law as adopted under Section 26200. 16 In 2017, section 26090(c) was amended slightly but not substantively, was renumbered as 17 section 26090(e), and now reads as follows: 18 26090. (e) A local jurisdiction shall not prevent delivery of cannabis or 19 cannabis products on public roads by a licensee acting in compliance with this division and local law as adopted under Section 26200. 20 In January 2019, in accordance with Section 26013, the Bureau of Cannabis Control 21 adopted a comprehensive set of regulations to address multiple issues involved in the 22 implementation of California’s cannabis laws. Among them is Section 5416(d), the regulation 23 Plaintiffs are challenging by this action, which reads as follows: 24 5416. (d) A delivery employee may deliver to any jurisdiction within the 25 State of Califomia provided that such delivery is conducted in compliance with all 26 delivery provisions of this division. 27 Plaintiffs are a group of local jurisdictions, with “local jurisdiction” being defined as “a 28 city, county, or city and county.” (Section 26001(ac).) -8- AMICUS CURIAE BRIEF “Commercial cannabis activity” is a defined term that “includes the cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery, or sale of cannabis and cannabis products as provided for in this division. ” (Section 26001(k). (Emphasis added.) Throughout Division 10 (Cannabis) of the Business and Professions Code, the term “this division” is used to refer to the code sections that comprise Division 10. (Section 26000(a).) Vv DISCUSSION A Section 26200(a)(1) Is A Grant Of Only Limited Authority And Does Not Authorize A Local Jurisdiction To Prohibit The Delivery Of Cannabis Goods 10 To Persons Within Its J urisdiction. 11 To understand that Section 26200(a)(1) grants only limited authority to local jurisdictions to 12 prohibit conduct related to cannabis businesses within their jurisdictions, it is helpful to consider 13 key aspects of the subsection and to do so in the context of well-established rules of statutory 14 interpretation. It may also be helpful, for demonstrative and illustrative purposes only, to recast the 15 statute in the manner that Plaintiffs appear to be reading it, or that it must read, for Plaintiffs to 16 have a meritorious claim.* 17 When interpreting a statute, it is necessary to have its terms well in mind. For convenience, 18 therefore, we repeat the language of Section 26200(a)(1) here, noting that it is comprised of two 19 “prongs,” as more fully discussed and examined below: 20 26200. (a)(1) This division shall not be interpreted to supersede or limit the 21 authority of a local jurisdiction to adopt and enforce local ordinances to regulate businesses licensed under this division, including, but not limited to, local zoning and 22 land use requirements, business license requirements, and requirements related to reducing exposure to secondhand smoke, or to completely prohibit the establishment 23 or operation of one or more types of businesses licensed under this division within the 24 local jurisdiction. (Emphasis added.) 25 26 4 As the Supreme Court has emphasized, however, the judiciary’s role in determining 27 h the meaning of a statute “ ‘ “is simpl to ascertain and declare what is in terms or in substance contained erein, not to insert what ‘as been omitted or omit what has been inserted ....” [Citation.] We may not, under the guise of construction, rewrite the law or give the words an effect 28 different from the plain and direct import of the terms used.’ [Citation.]” (People v. Leal (2004) 33 Cal.4th 999, 1008, 16 Cal.Rptr.3d 869, 94 P.3d 1071.) -9- AMICUS CURIAE BRIEF Focused on the words used and not used by the drafters of Section 26200(a)(1), and as approved by the voters, amicus respectfully offers the following observations regarding subsection (a)(1) of the statute: e The first prong concems a local jurisdiction’s authority “to regulate” The second prong describes the scope and extent of a local jurisdiction’s authority “to prohibit” The second prong identifies the cannabis business conduct that a local jurisdiction may prohibit and does so using the words “the establishment or operation of” Neither prong makes reference to or uses the term “commercial cannabis 10 activity” 11 Unlike Section 26200(a)(1), subsection (c) of section 26200 does make reference to and use the term “commercial cannabis activity” 12 13 The first prong does not include the phrase “within the local jurisdiction” whereas the second prong does, placing it after the words “licensed under this 14 division,” not after either the words “prohibit” or “the establishment or operation” 15 The second prong ends thus with the words “licensed under this division 16 within the local jurisdiction” 17 Neither subsection (a)(2) nor (b) of section 26200 use or include the phrase 18 “within the local jurisdiction” 19 While Section 26200(c) does use the phrase “within the local jurisdiction” it 20 does so in conjunction with words referencing local licensing, specifically “a license to engage in commercial cannabis activity within the local 21 jurisdiction” 22 Notwithstanding that Section 26200(a)(1) omits the term “commercial cannabis activity” in 23 24 || both of its two prongs, Plaintiffs nevertheless assert in their Trial Brief at 9:9-10 that: 25 “{iJn approving Prop. 64 in 2016, California’s voters expressly protected the existing regulatory authority of cities and counties over commercial cannabis activity.” 26 (Bold emphasis added, standard emphasis in original.) And, as noted above, they make the 27 28 | following proclamation in their Reply Trial Brief at 10:15-17: -10- AMICUS CURIAE BRIEF Localities maintain under Section 26200 unfettered local control with respect to commercial cannabis activity within their borders. That’s what the statute says, and that’s what the voters approved. (Bold emphasis added.) But, as should be now be quite clear, Section 26200(a)(1) does not say what Plaintiffs say it} does - it never uses nor makes reference to the term “commercial cannabis activity.” Instead, the subsection only refers to a local jurisdiction’s authority to prohibit “the establishment or operation of” a cannabis business and, even then, only those that are licensed within that local jurisdiction. Why is this significant? Because there is a material difference between the phrase “the 10 establishment or operation of” a cannabis business, meaning the “formation” or later “running” of 11 that business, and the defined term “commercial cannabis activity”, which is broadly defined at 12 Section 26001(k) to specifically include “delivery” in its definition. 13 It is also significant because, to ignore the fact that the term “commercial cannabis activity” 14 was omitted from subsection (a)(1), while it was contemporaneously included in subsection (c) of 15 16 the same code section, would contravene a fundamental rule of statutory construction. As the 17 California Supreme Court has said: 18 This approach contravenes the principle that “when different words are used in 19 contemporaneously enacted, adjoining subdivisions of a statute, the inference is compelling that a difference in meaning was intended.” (People v. J ones (1988) 46 20 Cal.3d 585, 596, 250 Cal.Rptr. 635, 758 P.2d 1165, italics omitted; see also Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal.4th 1106, 1117, 81 Cal.Rptr.2d 21 471, 969 P.2d 564 [“[w]here different words or phrases areusedin the same connection **631 in different parts of astatute, it is presumed the Legislature 22 intended a different meaning”].) 2 (Kleffman v. Vonage Holdings Corp. (2010) 49 Cal. 4th 334, 342-43, emphasis added.) 24 Moreover, and again from the Supreme Court: 25 “TW Jhen the Legislature has carefully employed a term in one place and has excluded 26 it in another, it should not be implied where excluded.’ “ (Citations.) 2 (Wasatch Prop. Mgmt. v. Degrate (2005) 35 Cal. 4th 1111, 1117-18, as modified (July 27, 2005), 28 emphasis added.) -11- AMICUS CURIAE BRIEF Accordingly, under these well-established and logical rules, there is no question but that the term “the establishment or operation of” has a different (and more limited) meaning than the defined term “commercial cannabis activity,” with the latter being comprehensive and making specific reference to “delivery.” Nor under the circumstances, and according to the Supreme Court, may the term “commercial cannabis activity” even be “implied” in Section 26200(a)(1). That said, had the drafters or the voters intended that local jurisdictions be granted the authority to prohibit the delivery of cannabis goods within their jurisdictions, there is no question but that the term “commercial cannabis activity” would have been used in Section 26200(a)(1). Plaintiffs understand this, clearly 10 agree with it, and have argued it, but their argument lacks support from the most importance source 11 and indication of voter intent...Section 26200(a)(1) itself. 12 To further illustrate the point, had the voters intended that local jurisdictions have the 13 authority to prohibit the delivery of cannabis goods to persons within their jurisdictions, the actual 14 language of the statute, in relevant part, would not have been written and approved as follows... 15 16 26200. (a)(1) ***, or to completely prohibit the establishment or operation of one or more types of businesses licensed under this division within the local jurisdiction. 17 ...but would instead have been written and approved as follows... 18 19 26200. (a)(1) ***, or to completely prohibit commercial cannabis activity within the local jurisdiction. 20 But the latter variant is not what the drafters wrote nor what the voters approved. Instead, 21 Section 26200(a)(1), as written and approved, omitted the term “commercial cannabis activity” in 22 subsection (a)(1), while contemporaneously using it in subsection (c). In so doing, the drafters and 23 voters manifested their clear intent not to empower local jurisdictions with the authority to prohibit 24 all commercial cannabis activity, including but not limited to “delivery.”5 25 26 5 And, indeed, this is fully consistent with what the voters were told b' y the Legis slative Analyst in 27 the 2016 Official V oter Information Guide for Prop. 64. There, in words no ly devoid of any qualifiers, conditions, exceptions, or equivocation, the Legislative Analyst explained that the intent 28 of Prop. 64 was that “adults age 21 and over would be able to purchase marijuana at state licensed -12- AMICUS CURIAE BRIEF Understandably stymied by the drafters’ choice of terms in Section 26200(a)(1), and the voters’ approval of them, Plaintiffs have also pursued a fallback position, this one attempting to endow the word “operation”, as used in Section 26200(a)(1), with a technical meaning that it was clearly not intended to have. ® The effort fails for several reasons. First, it is clear from Section 26200(a)(1) that the word “operation” was used in its ordinary non-statutorily defined sense, namely, meaning “to run”, “function”, or “be active.” Nor is this the only time or place where the word “operation” was or is used in its ordinary sense. For example, in a contemporaneous use made in Prop. 64’s original definition of “Unreasonably impracticable,” 10 which appeared in the approved initiative at Section 26001(dd), the word “operation” is similarly 11 used in its ordinary sense, there to mean “running” a cannabis business 12 26001. (dd) “Unreasonably impracticable” means that the measures necessary to 13 comply with the regulations require such a high investment of risk, money, time, or any other resource or asset, that the operation of a marijuana establishment is not 14 worthy of being carried out in practice by a reasonably prudent business person. 15 16 There are also other instances in Division 10 (Prop. 64 and S.B. 94) where the word 17 “operation” is used in its ordinary sense. For example, see Sections 26045(a) and (f) [“operation or 18 execution” of an order], 26055(c) [“business operation’”], and 26070(d) [‘operation” of vehicles”].) 19 For instances where the term is used in its technical and defined sense, see Sections 26038(a) “each 20 day of operation shall constitute a separate violation”], 26052.4(b) [‘‘prior operation in the local 21 jurisdiction”) and 26052.4(c) [“operation in compliance”].) 22 23 24 25 th businesses or throu h their delivery services.” (Official Guide at p. 92.) Not coincidentally, those are precisely e rights implemented and protected by Sections 26200(a)(1) and 26090(e). 26 27 6 “Operation, as defined in Section 26001(ak), “means any act for which licensure is required under the provisions of this division, or any commercial transfer of cannabis or cannabis products.” In 28 Prop. 64, the definition appeared at section 26001(w) and was similarly defined, the only difference being the “marijuana” was used in place of “cannabis”. -13- AMICUS CURIAE BRIEF Nor is it unusual for a word or term otherwise defined in a statute to also be used in a non- defined manner elsewhere in the statute. When that occurs, the nule is that the presumption of consistent usage readily yields to context. As the Ninth Circuit recently noted in Pakootas v. Teck Cominco Metals, LTD. 830 F.3d 975, 984 (9th Cir. 2016) The Supreme Court teaches that, even when the same word is used in different provisions of the same statute, the word does not necessarily have to be interpreted identically. Envtl. Def. v. Duke Energy Corp., 549 U.S. 561, 575-76, 127 S.Ct. 1423, 167 L.Ed.2d 295 (2007). Rather, “the presumption of consistent usage ‘readily yields to context, and a statutory term—even one defined in the statute—’may take on distinct characters from association with distinct statutory objects calling for different implementation strategies.’ ” Util. Air Regulatory Grp. v. EPA, —_ U.S. —, 134 S.Ct. 2427, 2441, 189 L.Ed.2d 372 (2014) (quoting Duke Energy Corp., 549 U.S. at 10 574, 127 S.Ct. 1423) 11 12 In Section 26200(a)(1), the word “operation” was used in its ordinary sense, as was the 13 accompanying word “establishment.”’ Given the plain meaning and ordinary usage of the words 14 the phrase “the establishment or operation of” is simply a way of denoting, first, the formation or 15 starting of a business and, second, the running of it thereafter. Thus, under Section 26200(a)(1) 16 local jurisdiction could prohibit the formation or start-up of a cannabis business within its 17 jurisdiction, or, once formed or started up, the local jurisdiction could shut it down. 18 Had the drafters and voters intended that local jurisdictions be authorized to prohibit the 19 20 delivery of cannabis goods to persons within their jurisdictions, Section 26200(a)(1) would have said 21 so. It could have done it by using the word “delivery”, which already had a code section of its own 22 in section 26090(e). Or it could have done it by using the term “commercial cannabis activity,” a 23 term well known to the drafters and voters (it was, in fact, used and approved in subsection (c) of 24 25 7 With regard to the ordinary meaning of the words “establishment” and “operation”, The New c 26 Oxford A merican Dictionary (2001), at pa fe 580, defines “establishment” as “the action of establishing ‘Something or being establishe ’ and defines “establish” as “set up” as in “to initiate or 27 bring about.” The same dictionary, at page 1200, defines “operation” as “the fact or condition of functioning or being active” with the usage example being “the construction and operation of 28 power stations.” It is difficult to imagine more precisely applicable definitions for the words “the establishment or operation of” as they appear and were used in Section 26200(a)(1) 14 AMICUS CURIAE BRIEF Section 26200) whose definition expressly referred to and incorporated the conduct of “delivery.” Or it could have been done by using the word “operation” in its technical sense, rather than in its ordinary sense. But none of these things occurred because the voters never intended Section 26200(a)(1) to authorize local jurisdictions to be able to prohibit the delivery of cannabis goods to persons in their jurisdictions. B. By Its Terms, Section 26200(a)(1)‘s Grant Of Authority To A Local Jurisdiction To Prohibit The Conduct Of A Cannabis Business Extends Only To Licensees Licensed Within That Local Jurisdiction. Having discussed that the term “commercial cannabis activity” was deliberately not used in 10 11 the second prong of Section 26200(a)(1), and that the word “operation” was only used in its ordinary 12 sense, both of which negate Plaintiffs’ claims of plenary power to prohibit all “commercial cannabis 13 activity” in their jurisdictions, including the delivery of cannabis goods, we tum now to a discussion 14 of the words of the second prong that fundamentally limit the reach of a local jurisdiction’s authority 15 to prohibit conduct only to those businesses that are licensed within that local jurisdiction. They are 16 the words “...licensed under this division within the local jurisdiction.” 17 18 Amicus respectfully submits that these words should be understood to mean what they say in 19 their ordinary sense and that, in accordance with fundamental rules of statutory construction, they 20 are not merely surplusage or placed in the subsection just to state the obvious, i.e., that Section 21 26200(a)(1), as does Section 26200 as a whole, relates to matters of a local nature. Rather, amicus 22 submits that the term was used, and placed where it was placed, in order to provide that a local 23 jurisdiction’s authority to prohibit the actions of a cannabis business extends only to those businesses 24 that are located and licensed within that jurisdiction. Said differently, given the words and their 25 26 placement, i.e., immediately following the reference to businesses “licensed” under the division, the 27 intent is that a local jurisdiction does not have the authority to prohibit the activities of licensees 28 located in and licensed within other local jurisdictions. AMICUS CURIAE BRIEF As the California Supreme Court has instructed, “Courts should give meaning to every word of a statute if possible, and should avoid a construction making any word surplusage.” Briggs v. Eden Council for Hope & Opportunity (1999) 19 Cal. 4th 1106, 1117~18, citing Reno v. Baird (1998) 18 Cal.4th 640, 658. Therefore, the phrase “within the local jurisdiction” is presumed to have an intended meaning and purpose. By its own terms, and even its title, Section 26200 clearly relates to matters occurring within or pertaining to a local jurisdiction. Because of that, it would not have been necessary to add the phrase “within the local jurisdiction” if its purpose was to simply inform the reader that the subsection relates to local matters. To illustrate the point by comparison, subsections (a)(2) and (b) of Section 26200 also necessarily relate to local issues but, 10 as may be seen, neither of them includes the term “within the local jurisdiction.” 11 Recalling the Supreme Court’s guidance relative to the interpretation of an initiative statute, 12 a court must “first consider the initiative’s language, giving the words their ordinary meaning and 13 construing this language in the context of the statute and initiative as a whole.” (People v. Superior 14 Court (Pearson) (2010) 48 Cal. 4th 564, 571.) It is clear, therefore, that “context” is important and 15 amicus respectfully submits that it is indeed significant to this analysis here. 16 Specifically, with regard to context and placement of the qualifying phrase “within the local 17 18 jurisdiction” in Section 26200(a)(1), while the phrase could have been placed either immediately 19 after the word “prohibit”, or the phrase “the establishment or operation,” it was not. Had such 20 alternative placement been used, the second prong would have effectively described the geographic 21 locale in which a local jurisdiction’s prohibitory authority could be exercised, but the qualifying 22 phrase would not have thereby implicated the word “licensed.” For example, the two options would 23 have read in pertinent part, as follows: 24 25 Option 1: 26 26200. (a)(1) ..., or to completely prohibit within the local jurisdiction the establishment or operation of one or more types of businesses licensed under this division. 27 Option 2: 28 - 16- AMICUS CURIAE BRIEF 26200. (a)(1) ..., or to completely prohibit the establishment or operation within the local jurisdiction of one or more types of businesses licensed under this division. But neither of those options were selected. Instead, the qualifying phrase was placed immediately after the words “licensed under this division.” As such, the actual placement was as follows: Actual placement: 26200. (a)(1) ..., or to completely prohibit the establishment or operation of one or more types of businesses licensed under this division within the local jurisdiction. This is significant for at least three reasons. First, although the first prong does include the 10 phrase “licensed under this division,” it does not also include the qualifying phrase “within the local 11 jurisdiction.” Second, when addressing a local jurisdiction’s authority to prohibit in the second 12 prong, the words “licensed within this division” are immediately followed by the qualifying phrase 13 “within the local jurisdiction,” thereby ending the second prong with words whose ordinary meaning 14 indicate an intent to limit a local jurisdiction’s prohibitory authority only to those businesses that are 15 licensed within that local jurisdiction. 16 Third, were the last antecedent rule of statutory interpretation to be applied, which provides 17 that “‘qualifying words, phrases and clauses are to be applied to the words or phrases immediately 18 preceding and are not to be construed as extending to or including others more remote...’ “, that, 19 would again confirm, just as the plain meaning and actual placement of the words do, that the 20 qualifying phrase “within the local jurisdiction” is appropriately to be applied to the phrase 21 immediately preceding it, namely, “licensed under this division.” (See White v. County of 22 Sacramento (1982) 31 Cal.3d 676, 680, and Lockhart v. United States (2016) 136 S. Ct. 958, 962— 23 63.) Either way, the language of Section 26200(a)(1) makes clear that a local jurisdiction’s authority 24 to prohibit conduct, under the second prong of Section 26200(a)(1), only extends to businesses that 25 are licensed within that local jurisdiction and not to businesses that are not. 26 For the reasons noted above, not only does Section 26200(a)(1) not empower a local 27 jurisdiction to prohibit delivery of cannabis goods within its borders, but whatever prohibitory power that is afforded by Section 26200(a)(1) only extends to those businesses that are actually licensed -17- AMICUS CURIAE BRIEF within its jurisdiction. Accordingly, and as the discussion regarding Section 26090(e) in Part C of this brief underscores, Section 26200(a)(1) does not grant a local jurisdiction the authority to prohibit delivery of cannabis goods being made by a retailer that is not licensed within that local jurisdiction but is licensed and acting in compliance with the local law of a different local jurisdiction where its premises are located and licensed. Cc Section 26090(e) Does Not Grant Local J urisdictions The Authority To Prevent Deliveries. On The Contrary, It Expressly Prevents Them From Doing So. Section 26090(e) provides that so long as the delivery of cannabis goods are being made by a licensee (a retailer) acting in compliance with both state cannabis law under Division 10 and “local 10 law as adopted under Section 26200”, then a local jurisdiction “shall not prevent” that delivery from 11 taking place. Specifically, Section 26090(e) provides: 12 26090. (e) A local jurisdiction shall not prevent delivery of cannabis or cannabis products on public roads by a licensee acting in compliance 13 with this division and local law as adopted under Section 26200. 14 15 According to Plaintiffs, the reference to “local law” in Section 26090(e) is necessarily a 16 reference to the local law of the local jurisdiction seeking to prevent delivery (meaning Plaintiffs) 17 and is, therefore, a confirmation of the grant of authority to prohibit that Plaintiffs contend Section 18 26200(a)(1) affords them. Once again, Plaintiffs are wrong and they are wrong for three 19 independent reasons. 20 First, as discussed in detail above, Section 26200(a)(1) does not by its terms grant a local 21 jurisdiction the authority to prohibit the delivery of cannabis goods. It could have, had the term 22 “commercial cannabis activity” or the word “delivery” been used, but they were not. 23 Second, whatever prohibitory authority Section 26200(a)(1) does grant to a local jurisdiction, 24 that authority extends only to those businesses that are licensed within that local jurisdiction. That, 25 amicus submits, is the plain meaning of the words “licensed under this division within the local 26 jurisdiction,” as they were used and approved in the second prong of Section 26200(a)(1). Third, in their reading of Section 26090(e), Plaintiffs make a leap, bom of an assumption, 27 28 and reach an erroneous conclusion. Specifically, Plaintiffs assume that the reference to “local law” - 18- AMICUS CURIAE BRIEF in Section 26090(e) is necessarily a reference to “their” local law, or to the local law of alike-minded local jurisdiction that seeks to prohibit the sale and delivery of cannabis goods to its residents. But there is nothing in Section 26090(e) to support either that assumption or conclusion and both are undermined by the initiative itself. As originally passed and adopted, Prop. 64 contained provisions recognizing that licensees (such as retailers) would have premises from which their business operations would be conducted. For example, when Prop. 64 was adopted, its Section 26055(c) imposed a license requirement “for| each of the premises of any licensee having more than one location...”: 10 26055. (c) Separate licenses shall be issued for each of the premises of any licensee having more than one location, except as otherwise 11 authorized by law or regulation. 12 In addition, original section 26055 also included subsection (d), which imposed 13 modification restrictions on licensees concerning their business locations and, by its terms, fully 14 acknowledged and anticipated that licensees would be conducting their business operations from a 15 physical location and premises: 16 26055. (d) After issuance or transfer of a license, no licensee shall 17 change or alter the premises in a manner which materially or substantively alters the premises, the usage of the premises, or the 18 mode or character of business operation conducted from the 19 premises, from the plan contained in the diagram on file with the application, unless and until prior written assent of the licensing 20 authority or bureau has been obtained. For purposes of this section,