At 5:30 p.m. yesterday, California Governor Gavin Newsom took a giant step forward in preventing the spread of COVID-19 by enacting a “Stay At Home” order (the “Order”) across the state, mandating that California state residents remain in their homes, except to fulfill “essential” needs. The Order is in place seemingly indefinitely as Newsom would not give a deadline for its expiration. For thousands of licensed cannabis businesses, the question is now whether cannabis businesses are considered “essential businesses” under the Order.
Per the Order, essential services will remain open such as:
- Gas stations
- Food: Grocery stores, farmers markets, food banks, convenience stores, take-out and delivery restaurants
- Laundromats/laundry services
Essential state and local government functions will also remain open, including law enforcement and offices that provide government programs and services. And what’s closed/cancelled during the Order? Dine-in restaurants, bars and nightclubs, entertainment venues, gyms and fitness studios, public events and gatherings, and convention centers.
The Order is completely silent regarding cannabis businesses and as of the drafting of this post neither the Bureau of Cannabis Control, the Department of Food and Agriculture, nor the Department of Public Health have made any official statements about whether cannabis businesses can remain open under the Order.
On the back of the Order, cities and counties are instituting their own “Shelter in Place” or “Stay at Home” orders. Los Angeles County, the City of Los Angeles, and the City and County of San Francisco all have their own orders (to name a few). At the local level is where we’re seeing whether cannabis businesses are deemed “essential” and allowed to stay open within a locality’s borders.
In L.A. County, the County’s order makes clear that cannabis dispensaries with a medicinal license from the state are essential and may remain open. Notably, “Businesses that supply other Essential Businesses with the support or supplies necessary to operate” may also remain open. In turn, cannabis licensees that serve medical dispensaries may stay open (and, luckily, under California cannabis regulations, medicinal and adult-use licensees can provide product to each other (with the exception of retailers selling to the public)).
In the City of L.A., “Cannabis dispensaries, or any related and/or ancillary healthcare services” can stay open. “Manufacturers and suppliers” are included on the list, too, but they’re not qualified as “cannabis” manufacturers and suppliers, but arguably “related healthcare services” means that cultivators and manufacturers supplying cannabis dispensaries can remain open. Unlike the County of L.A., there’s no explicit medicinal license requirement.
In San Francisco, originally the City deemed dispensaries non-essential and ordered them closed, but then did a 180 and declared them essential businesses, and its order also includes as essential businesses those “Businesses that supply other essential businesses with the support or supplies necessary to operate.” So, manufacturers and cultivators in San Francisco that supply dispensaries can remain open.
Since the state cannabis agencies haven’t acted yet and where the Order does not explicitly list dispensaries as “essential businesses,” if your city or your county hasn’t determined that your cannabis business is “essential”, it is likely to be shuttered under the Order. If you don’t know whether your cannabis business is “essential” in the city or county in which it’s located, the first place to look is at your city or county regulators. Failing that, communication with state cannabis regulators, advocating for essential status under the Order is your next best bet. And a question remains as to whether local orders allowing for cannabis businesses to remain open are even allowed where the state-mandated Order, itself, doesn’t list cannabis businesses as essential.
More than ever, either the state cannabis agencies need to step up and push for cannabis dispensaries and their suppliers to be officially dubbed essential under the Order, or the cities and counties need to take up the mantle to protect these businesses (and their vulnerable patrons) during this very uncertain time.