In a landmark resolution that highlights the strain between state and federal hashish legal guidelines, a California appellate court docket dominated on October twenty ninth that property house owners can refuse to permit the transportation of hashish throughout their land through easements, even when the hashish operation is accredited by native authorities.
The Second District Courtroom of Enchantment’s unanimous resolution attracts consideration to non-public property rights in a context the place hashish stays federally unlawful, however state legislation permits licensed cultivation, distribution and sale. Presiding Justice Albert Gilbert said, “Irrespective of how a lot California voters and the Legislature would possibly strive, hashish cultivation and transportation are unlawful in California so long as it stays unlawful below federal legislation.” JCCrandall LLC v. County of Santa Barbara, Case No. B333201, 2024 WL 4599304, Oct. 29, 2024.
Until the California Supreme Courtroom grants assessment – which I might not rule out – the choice empowers personal property house owners to refuse to contract with hashish companies, and restricts native authorities from approving hashish operations that implicate the property rights of neighbors who object.
The case at hand
The dispute centered round a hashish cultivation operation in Santa Barbara County, the place JCCrandall LLC challenged a conditional use allow granted by the County to its neighbor, Santa Rita Holdings Inc. The essential problem was that Santa Rita Holdings might solely entry its 2.5-acre hashish farm through an unpaved highway crossing JCCrandall’s property by way of a pre-existing easement. JCCrandall grows oats and barley.
JCCrandall’s major concern? It raised numerous complaints with the Santa Barbara County Supervisors about truck visitors and evening operations, which didn’t acquire traction, however within the Courtroom of Enchantment JCCrandall centered on what it claimed was potential legal responsibility related to having federally unlawful substances transported throughout its property, though County regulators discovered that the Santa Rita operation was totally compliant with state and native legal guidelines.
Key authorized findings
The appellate court docket’s resolution hinged on a number of essential factors:
- Property Rights: The court docket emphasised that “the proper to exclude others is the essence of the proper of property possession” and categorized it as a basic vested proper.
- Federal Supremacy: The panel decided that permitting hashish transportation throughout personal property “defies the Supremacy Clause” of the U.S. Structure.
- State vs. Federal Regulation: Whereas hashish could be authorized below California legislation, the court docket dominated that federal legislation’s prohibition takes priority on this context.
California hashish trade implications
Authorized consultants counsel this ruling might have far-reaching penalties for California’s hashish trade. Part 1550.5(b) of the California Civil Code makes contracts inside California involving hashish lawful and enforceable, and Santa Rita Holdings guess the ranch on that argument. However the Courtroom of Enchantment held that the statute couldn’t compel a landowner to permit hashish to journey throughout its property on a pre-existing easement. Licensed operators could discover it more durable to do enterprise as a result of neighbors who’ve property rights affected by a hashish enterprise can object, and, below the JCCrandall ruling, native authorities should yield to these objections.
An instance could be a hashish dispensary that depends upon entry to its car parking zone through an easement or is positioned in a shopping mall the place different lessees have rights to object to tenants however the approval of the owner. In cultivation, many hashish farms rely upon vehicular entry by way of easements as a result of they’re distant and don’t at all times have direct entry to public thoroughfares, or they rely upon water sourced from different properties pursuant to agreements made by prior house owners who grew conventional crops. These neighbors won’t want to indicate any adverse impression on their property, however can argue that they might be discovered complicit in federally unlawful actions.
I believe essentially the most problematic language within the JCCrandall ruling is the next, which could draw the eye of the California Supreme Courtroom and trigger it to grant assessment: “For so long as an easement is loved, its mode and method of use shall stay considerably the identical because it was on the time the easement was created. The County argues the easement was used for agricultural functions. However there’s a huge distinction between authorized and unlawful agricultural functions.” (Emphasis added.) If California has decided that hashish cultivation is authorized – because it has – and state courts routinely implement contracts involving hashish, it’s a fairly daring step to declare using a lawful pre-existing easement unlawful just because the agricultural crop is hashish and take away easement entry from Santa Rita.
Wanting forward
This resolution creates new challenges for hashish companies in California, and can lead to extra disputes amongst neighbors. Whereas the Biden administration has proven indicators of easing federal marijuana restrictions, this ruling demonstrates that the federal-state legislation battle continues to create important authorized hurdles for the hashish trade.
California court docket choices additionally may be persuasive authority in different states, so we’d see comparable litigation (and choices) elsewhere within the nation the place hashish has been legalized.
The case serves as a reminder that regardless of California’s progressive stance on hashish, federal prohibition continues to forged a protracted shadow over the trade’s operations and growth. Because the hashish panorama continues to evolve, this ruling could immediate companies to reassess their property preparations and native governments will definitely should rethink their allowing processes to present extra cautious consideration to objections by neighbors who declare that their property rights are implicated by hashish operations.
Observe: This publish was first revealed earlier this month on the Alger ADR Weblog.