Corporate Legal Service Tel (213) 739-8237 Fax: (213) 739-8262 July 27, 2012 _____________________________________________________________________________________________________________________
REALTORS® often have questions about California and federal laws regarding medical marijuana. For example, residential landlords may be faced with decisions concerning medical marijuana-related activity of tenants, or how to address lease violations related to medical marijuana use. In a sales transaction, a REALTOR® might face questions on whether there is a duty to disclose certain facts related to medical marijuana being grown or stored on the property. The below article provides an overview regarding this area of law. For additional information, view the C.A.R. Legal Q & A, "Medical Marijuana Issue for REALTORS
DW Duke (David W. Duke), Esq., is a member of the C.A.R. Strategic Defense Attorney Referral Panel, and practices law with the law firm of Spile, Leff & Goor, LLP.
ISSUES ARISING UNDER CALIFORNIA MEDICAL MARIJUANA LAWS
On November 5, 1996, California voters approved Prop 215 (California Compassionate Use Act) which went into effect on November 6, 1996 as Health & Safety Code 11362.5. Prop 215 decriminalized marijuana cultivation, possession and use, when the user has obtained an oral or written recommendation from a physician licensed to practice medicine in the State of California, that marijuana would have a medical benefit if used by the holder of the recommendation. In order to qualify for such a recommendation the patient has to suffer from any illness for which marijuana would provide relief. The statute provides a list of conditions for which marijuana may be recommended, but the list was not all inclusive. The list included arthritis, cachexia, cancer, chronic pain, HIV or AIDS, epilepsy, migraine and multiple sclerosis. Under the original act, there was no limit on the amount of marijuana a person could possess, though guidelines regarding quantities were adopted in 2003. It is important to recognize that the statute does not provide reciprocity to persons who live in other states that have medical marijuana statutes. Thus, a person with a recommendation in another state cannot come to California and lawfully use marijuana without obtaining a recommendation by a physician here.
In October of 2003, Senate Bill 420 was passed and became effective on January 1, 2004 as Health and Safety Code §§11362.7-11362.83. These statutes placed guidelines on the cultivation and possession of marijuana. Qualified patients, or their caregivers, may possess up to eight ounces of dried marijuana, six mature plants or eight immature plants. However, a patient may possess a greater amount if deemed beneficial by his physician. In addition, cities and counties may authorize possession of a greater amount than allowed by state law, if they choose to do so.
An important feature of SB 420 is that medical marijuana dispensaries were implicitly authorized in that qualified patients and care givers with valid identification cards would not be criminally prosecuted on the sole basis that they formed non-profit collectives for the purpose of cultivation of marijuana for medicinal purposes. This provision of course, does not authorize tax evasion, cultivation for non-medical purposes, or other illegal acts of which many dispensaries are now being accused.
SB420 also authorized the State of California to establish a medical marijuana registry and to allow counties to issue cards to qualified patients. If a patient is detained for possession, he can present this card, from which the officer can immediately verify that the cardholder has a recommendation from a licensed physician. Possession of the card is voluntary and a qualified patient is not prohibited from using marijuana if he does not possess this card. Its purpose is to quickly demonstrate that one is using marijuana lawfully. Possession of this card is on a county wide basis and is kept confidential.
Initially, one of the most common questions arising under the new law was whether landlords were required to lease apartments to tenants who used marijuana under the recommendation of a physician. The concern was that landlords would be sued for violating state and federal disability laws if they prohibited tenants from using marijuana under a physician’s recommendation. While a variety of opinions was provided by attorneys the most common response was that although legal for medical purposes in California, marijuana remains a Class I Controlled Substance under federal law and thus has no legitimate medical purpose under federal law. A landlord has the right to prevent a crime from occurring on his property which includes crimes under federal law. Thus, a landlord could legitimately prohibit a tenant from possessing or using marijuana on his property notwithstanding the fact that the tenant is using the marijuana under the recommendation of a physician. As time passed, more common questions concerned the operation of dispensaries and the meaning of the term “collectives for cultivation of marijuana for medicinal purposes.”
In order to provide guidance for lawful use of medical marijuana, in August of 2008, Governor Jerry Brown, who was the state attorney general at the time, issued Guidelines for the Security and Non-Diversion of Marijuana Grown for Medical Use. The guidelines were intended to “(1) ensure that marijuana grown for medicinal purposes remains secure and does not find its way to non-patients or illicit markets, (2) help law enforcement agencies perform their duties effectively and in accordance with California law, and (3) help primary caregivers understand how they may cultivate, transport, possess and use medical marijuana under California law.” Despite the stated objectives of the guidelines law enforcement agencies, collectives, physicians and patients remained uncertain of the permissible scope of cultivation, distribution and use of medical marijuana.
CONFLICT BETWEEN STATE AND FEDERAL LAW
After the passage of SB420 medical marijuana dispensaries began to open throughout California. Initially, there was some hesitation but as attorneys began to interpret the statutes as authorizing the operation of dispensaries, the practice became widespread to the extent that dispensaries became fairly common place. At the time of running for election, then candidate Barack Obama made the statement that he would not interfere with state medical marijuana statutes. However, on October 19, 2009, United States Deputy Attorney General David Ogden issued a memorandum to selected U.S. attorneys wherein he stressed the commitment of the Department of Justice to enforcing the Controlled Substances Act in all states and asserting that marijuana distribution in the United States is the single largest source of revenue for Mexican cartels. Nonetheless, Mr. Ogden assured the recipients of the memorandum that federal resources would not be focused on individuals whose actions are in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana. Despite this assurance the memorandum created uncertainty concerning the position the federal government would take with respect to medical marijuana.
In the summer of 2011 the Department of Justice launched an assault on California medical marijuana dispensaries by issuing letters notifying the operators of dispensaries that they would be prosecuted criminally for violating federal drug laws. They were also warned of prosecution for violation of United States tax laws. At the same time the Department of Justice launched its assault on owners of dispensaries it launched another assault that is of tremendous concern to the real estate profession. That attack was a letter campaign directed toward landlords who have leased premises to individuals operating a dispensary. The letters stated, among other things, that allowing the dispensaries to operate on the owner’s premises was a violation of U.S. Code §856(a) and further that “violation of the federal law . . . is a felony crime, and carries with it a penalty of up to 40 years in prison when operating within a prohibited distance of a school. An owner of real property with knowledge or reason to know of illegal drug sales on real property that he owns or controls may have his interest in the property forfeited without compensation.”
Many have asked the questions, how is it that the federal government is permitted to enter the state of California and enforce drug laws that appear to directly interfere with California state medical marijuana laws? Doesn’t the Tenth Amendment to the U.S. Constitution preclude the government from interfering with state medical laws? And further, did not Griswold v. Connecticut 381 U.S. 497 (1965), the landmark U.S. Supreme Court right of privacy case, clearly establish that there is a privileged privacy relationship between a patient and his physician? Did not the Griswold case further establish that if there exists a commodity, in that case contraceptives, that falls within the prescription or recommendation zone between a physician and his patient, the government must recognize and not interfere with that privacy right in the absence of a compelling governmental interest? If these things are true, then how is the federal government able to close down medical marijuana dispensaries if they are operating within the guidelines of state medical laws?
Wickard v. Filburn 317 U.S. 111 (1942), was a case that dealt with the Agricultural Adjustment Act of 1938 wherein Congress sought to regulate the amount of wheat introduced into interstate commerce by private farmers. Filburn sold a portion of his wheat crop and used the rest for his own consumption. The amount of wheat Filburn produced for his own consumption, combined with the wheat Filburn sold, exceeded the amount he was permitted to produce. The U.S. Supreme Court held that Congressional authority to control interstate commerce, in this case the supply of wheat, permits Congress to limit the amount of wheat a farmer could produce even for his own consumption. Relying on Wickard v. Filburn, the U.S. Supreme Court in Gonzalez v. Raich 545 U.S.1 (2005) held that the authority of Congress to regulate interstate commerce includes the authority to regulate the production of medical marijuana even where it is lawful under state law.
Marijuana is a Class I drug under the federal Controlled Substances Act; thus, in the view of the federal government it has no medicinal value. Congress has provided that states are free to regulate controlled substances provided the regulation does not conflict with the federal Controlled Substances Act. In the opinion of the California Attorney General, issued August 2008, there seemed to be no conflict between California’s Compassionate Use Act and the federal government’s Controlled Substances Act. California law simply provided that qualified users could not be prosecuted for possession and use of medical marijuana under state law. It did not prohibit the federal government from prosecuting under the Controlled Substances Act.
In light of the action recently taken by the U.S. Department of Justice uncertainty of the rights of citizens to cultivate and use medical marijuana has become increasingly confounded. For this reason, Ms. Kamala Harris, the Attorney General of the State of California issued a letter on December 21, 2011 calling for the California legislature to establish clear rules governing the access to medical marijuana. Until the legislature follows the recommendation of Attorney General Harris, and clearly sets forth applicable rules governing this issue, Californians will remain uncertain of their rights and duties under state law with respect to medical marijuana cultivation and use. Furthermore, even efforts by the California legislature to address this issue will not resolve the ambiguities that exist under federal law when applied in the context of the Compassionate Use Act. Unless medical marijuana is reclassified under the Controlled Substances Act, Californians who use or cultivate medical marijuana will be uncertain of the risk of prosecution by the Department of Justice notwithstanding the assurance of Deputy U.S. Attorney Ogden, and others, that the federal government will not focus its resources on prosecution of patients who are in clear compliance with California’s Compassionate Use Act.