SQ 788 allows Medical Marijuana license holders to obtain marijuana through retail purchases or to grow the marijuana personally. SQ 788 creates a 3 tiered commercial system with Growers, Processors and Dispensaries. Growers sell to Processors. Processors prepare consumable forms of marijuana that they sell to Dispensaries (retail stores). Growers and Processors cannot directly sell to consumers (i.e. no tasting rooms on parr with local breweries). To what extent can you regulate these commercial activities and/or the growing of marijuana at a license holder's home?
SQ 788 and Local Control
SQ 788 grants municipalities the right to enact measures that increase (but not decrease) the amount of marijuana that a Medical Marijuana license holder may possess. SQ 788 also expressly addresses municipal zoning regulations of retail marijuana establishments. SQ 788 is silent as to municipal zoning regulation of Growers and Processors.
Municipalities may only exercise authority that is granted to them by the OK Constitution or statutes.[i] Municipalities may exercise so-called "police powers" but must "move in the same direction as the legislature but not contrary to or in opposite directions."[ii] Municipalities may enact ordinances that move in the same direction as SQ 788, which is judged by determining whether the ordinance conforms to the provisions of SQ 788 and by ensuring that the ordinance does not restrict something that is permitted by SQ 788. To help illustrate this point, we need look no further than another intoxicating substance.
When Ordinances Conflict with State law: Examples from Alcohol
The irony of using alcohol as a guide to municipal regulation of marijuana is deeper than it might initially seem. When Oklahoma was admitted to the union, it was required to be a "dry" state, but congress included an exception allowing the State to engage in the sale of alcohol "for medicinal purposes."[iii] Further, during an era of national prohibition on alcohol, the State sought to side-step the rules by establishing 3.2% beer as a nonintoxicating beverage - a distinction that would lead to several challenges to prohibition era municipal ordinances banning the sale of all beer, including 3.2% beer.
Banning Beer Sales: Early in our history, a City ordinance banning the sale of 3.2% beer on Sunday was held to be inconsistent with State law.[iv] 3.2% beer was a nonintoxicating beverage, and State law generally allowed the sale of food and beverages for on site consumption on Sunday. Because the ordinance prohibited a sale that the general laws of the State allowed, it was held to be inconsistent and, thus, invalid.
Banning Through Building Codes: Efforts to use highly restrictive building requirements to effectively limit (or eliminate) the ability to sell 3.2% beer were similarly invalidated.[v] The courts reasoned that the legislature established detailed requirements to be met in order to sell 3.2% beer. If municipalities could "enlarge" the requirements to engage in the sale of 3.2% beer, then municipalities would effectively have the power to deprive individuals meeting all State requirements from exercising their right to sell 3.2% beer. Once again, an ordinance was held to restrict and even prevent an activity that was permitted by State law.
Banning Through Zoning Codes: Challenges to zoning ordinances contained some nuance. A municipality could determine where grocery stores would and would not be allowed within their community. But if a grocery store was located in a proper zoning district, the City could not, by ordinance, ban the sale of 3.2% beer at that store via a "within 300 feet of a school" ordinance if the sale of 3.2% beer at that location would be permitted under State law.[vi] It is noteworthy, however, that the Court signaled that a City could ban grocery sales in an area without offending State law. The issue was only that the City sought to allow grocery sales while disallowing the sale of a nonintoxicating beverage that could be sold under State law.
Banning Through Business Codes: One final example comes in the form of an attempt to ban 18-20 year old citizens from working for or entering nude establishments that sold 3.2% beer. The ordinance was invalidated as conflicting with State statutes that authorized a person of the age 18-20 to patronize and be employed by establishments that only sold 3.2% beer.[vii] Once again, an ordinance prohibited an activity that was expressly permissible under State law.
SQ 788 is silent as to municipal regulation of Growers and Processors. If marijuana laws are viewed as similar to alcohol laws, then the argument could be made that, absent express statutory authority, a municipality cannot enact zoning codes that would conflict in anyway with the terms of SQ 788. This view may be problematic for two reasons. First, SQ 788 addressed only how one can gain the right to grow or process marijuana, and not where they may engage in the activity. Second, and most importantly, if SQ 788 intended to occupy the field of regulation of the marijuana industry to the exclusion of any municipal regulation, it could have done so. Instead, SQ 788 enacted 63 O.S. §425A which creates protections for license holders.
Subsection F expressly addresses municipal zoning regulations for retail establishments. Rather than serving as a grant of authority, Sub-F is worded as a restriction on an already-existing municipal power. If SQ 788 was intended to serve as a field preemption of municipal regulation, then Sub-F becomes surplus language.[viii] The most logical reading is that municipalities may enact zoning regulations related to Growers and Processors so long as their regulations are not inconsistent with State law. Put differently, the only tier of the 3 tier system for marijuana distribution that is subject to an affirmative restriction by SQ 788 is the retail sale tier.
Municipalities cannot impose, through zoning or other ordinances, restrictions on who may open a Grower or Processor operation. Such a restriction would very likely be invalidated if it prohibited a person from engaging in a business if they met all requirements of SQ 788. Further, municipalities cannot restrict by ordinance how much marijuana a Grower may grow at any time since 63 O.S. §422A(D) expressly states that "there shall be no limits on how much marijuana a licensed grower can grow.
As for zoning ordinances, municipalities would appear to have broader authority to regulate where Growers and Processors could locate within the jurisdictional limits. It is recommended that you not completely ban such activities outright as such a ban would likely be challenged and a strong argument could be made that you are prohibiting an activity that is legal under State law.
As for proximity restrictions, in particular buffer zones between Growers/Processors and, say, churches or schools, this is a harder issue. §425A(G) expressly prohibits retail establishments within 1,000 feet of a public or private school entrance. By implication, the only commercial operation prohibited within 1,000 feet of a school is a retail establishment. If proximity was not addressed in SQ 788, it would be easier to argue that municipalities could enact any proximity restriction they deem necessary and proper for the promotion of the health, safety and welfare of their citizens. But since SQ 788 addresses proximity, at least as to schools, and applies the restriction to only retail sellers, the argument would follow that Growers and Processors can locate as close to a school as they wish. Municipal ordinances which impose proximity restrictions (at least as to schools) arguably would prohibit an activity that is legal at State law.
SQ 788 prohibits municipalities from "unduly" changing or restricting their zoning laws to prevent the opening of a retail marijuana establishment. As noted above, this is not a grant of authority but, rather, a restriction on an existing municipal right. The restriction includes two key words: "unduly" and "prevent". Because SQ 788 did not define these terms, the Courts will interpret those terms as they are commonly understood.
The Oklahoma Supreme Court has interpreted the term "undue" when used to qualify some statutory power or authority as meaning excessive or exceeding what is appropriate or normal.[ix] Minor changes in municipal zoning codes would thus seem to be permissible. Overhauls to municipal zoning codes may garner strict review by the Court to determine whether the impact has the effect of preventing retail establishments from opening in the municipal limits.
OMAG's advice to our members is that there is express statutory authority to amend your zoning codes to address the impact of SQ 788 so long as those amendments are not excessive and geared toward preventing retail establishments from opening within your jurisdictional limits.
Additional areas of concern include attempts to restrict who may engage in retail sales above and beyond what SQ 788 established. As with Growers and Processors, municipalities cannot impose greater restrictions on who may engage in the lawful sale of Medical Marijuana if it would have the effect of prohibiting a person from engaging in that activity who would otherwise meet all State law requirement.
Another area of concern would be proximity ordinances that are more restrictive than 63 O.S. §425A(G). SQ 788 prohibits the retail sale of marijuana within 1,000 feet of an "entrance" of a school. Municipalities cannot enact proximity restrictions that would prohibit the opening of a retail establishment that would otherwise meet the requirements of SQ 788. So, for example, a municipal ordinance prohibiting retail establishment within 1,000 feet of the property line for a school would be more restrictive than §425A(G) and would likely be invalidated in a legal challenge. So too would ordinances that increased the 1,000 foot proximity to a school entrance restriction. As to other proximity restrictions, SQ 788 is silent, which arguably grants municipalities broader authority to enact other proximity restrictions.
SQ 788 is silent on whether municipal zoning regulations can be used to attempt to regulate or prohibit Medical Marijuana license holders from growing marijuana plants at home. SQ 788 does grant a right of a license holder to possess plants for personal use. As discussed above, since SQ 788 is silent as to where this activity may take place, municipalities arguably have broader authority to regulate the activity. More likely than not, a Court would view the growing of personal marijuana by a license holder as being akin to the sale of 3.2% beer by grocery stores - municipalities can regulate where a grocery store may locate but, once they establish their zoning districts municipalities cannot prohibited the store from engaging in a particular type of grocery transaction. The argument would follow that a municipality may regulate what properties may be used for residential purposes but, having done so, municipalities would be hard pressed to prohibit a resident from engaging in the lawful growth of marijuana pursuant to their license.
The Department of Health voted July 10, 2018, to adopt emergency rules implementing SQ 788.[x] In those new rules, the Department imposes limitations on the home growth of Medical Marijuana, 310:681-2-13:
Must be grown at property owned by the license holder or, if rental property, the license holder must have the written permission of the property owner.
The marijuana plants must not be accessible to the general public.
If grown outdoors, the marijuana plants must be completely behind a 6 foot fence with sight proofing sufficient to prevent the plants from being seen from any public street adjacent to the property. The fence must be secured with a lock and key.
Municipalities likely may enact zoning ordinances consistent with these rules. OMAG recommends against this for one practical reason: these rules are emergency rules and likely to be amended by the Department (or Legislature) over the coming months and years. OMAG would recommend that, if any ordinance is to be adopted, it should require compliance with State law and Department of Health rules and regulations. This would eliminate the need to amend your ordinances going forward as the Department amends its rules and/or the legislature amends the statutes enacted by SQ 788.
Lastly, while there are likely limits on your ability to regulate personal marijuana growth by license holders, there assuredly will be disputes between landlords and tenants over the issue. 63 O.S. §425A(A) prohibits landlords from making decisions based on a person being a license holder. That does not mean, however, that landlords must allow tenants to grow marijuana on the landlord's property. The above referenced rules require written consent from the landlord before a tenant may grow marijuana. The rules require alterations on the property as a prerequisite to the growing of marijuana - alterations that may not be desirable to the landlord. Further, landlords would rightfully be concerned about being in unlawful possession of marijuana should a tenant vacate the premises without ensuring that all plants were removed (and would not return).
i. Elias v. City of Tulsa, 1961 OK CR 59, ¶ 4, 364 P.2d 678, 680; Okla.Const. art. VII, § 1.
ii. 3 McQuillin on Municipal Corporations §894; Ex parte Johnson, 1921 OK CR 202, 201 P. 533; Ex parte Johnson, 1917 OK CR 3, 161 P. 1097.
iii. see the 1906 Oklahoma Enabling Act, https://www.loc.gov/law/help/statutes-at-large/59th-congress/session-1/c59s1ch3335.pdf last visited July 29, 2018
iv. Sparger v. Harris, 1942 OK 418, 131 P.2d 1011; Ex parte Pappe, 1948 OK CR 128, 201 P.2d 260.
v. Ex parte Gammel, 1949 OK CR 81, 208 P.2d 961.
vi. 7-Eleven, Inc. v. McClain, 1967 OK 7, 422 P.2d 455.
vii. Fancy's Entertainment L.L.C. v. City of Enid, 2007 OK CIV APP 112, 171 P.3d 928
viii. Sub-F could have been worded "A city or local municipality may enact zoning laws related to the retail sale of marijuana so long as such laws do not unduly restrict the opening of retail establishments." Instead of using an affirmative grant of authority, the drafters of SQ 788 worded Sub-F as a restriction on an already existing right: "No city or local municipality may unduly change or restrict zoning laws to prevent the opening of a retail marijuana establishment."
ix. Young v. Macy, 2001 OK 4, ¶15, 21 P.3d 44, 48
x. The Department is set to adopt amended rules in response to the advice of the Attorney General. A summary of the proposed revisions, as well as the proposed new rules, are available online. The residential growth rules are not the subject of any proposed amendments.
DISCLAIMER: OMAG has reviewed SQ 788, existing OK statutes and case law as well as statutes and case law from other states that have legalized marijuana to some degree. OMAG cannot predict how our Legislature or Courts will respond to SQ 788 and can only offer our best advice on the subject. OMAG members seeking legal advice on SQ 788 should be aware that there may not be clear-cut answers on some of the issues for some time. OMAG offers this guidance to help your municipality make informed decisions about policies and procedures, directly or indirectly related to medical marijuana, until some of the issues can be decided by the Legislature or the Courts.