CA Appeals Court Finds Ordinance Regarding Medical Marijuana Facilities did not Constitute a Project Within the Meaning of CEQA

In April 2013, the City Council directed the City Attorney to develop an ordinance to allow medical marijuana facilities in the City. The City Council held public hearings and finally adopted Ordinance No. 0–20356 , which amended several parts of the City’s municipal code to regulate the establishment and location of medical marijuana consumer cooperatives. The ordinance defined the term “medical marijuana consumer cooperative” to mean “a facility where marijuana is transferred to qualified patients or primary caregivers in accordance with the Compassionate Use Act of 1996 and the MMP,” and specifically stated that the enacted regulations “were intended to apply to commercial retail facilities.” The Ordinance also provided that medical marijuana consumer cooperatives may be permitted with a conditional use permit in certain zones in the City, subject to various restrictions.

Prior to the enactment of the Ordinance, UMMP submitted two letters to the City, in which it argued that the enactment of the Ordinance was a “project” as defined in CEQA and was otherwise not exempt, requiring the City to perform an initial study of possible environmental impacts before enacting the Ordinance. UMMP filed a petition for writ of mandate against the City on April 29, 2014. UMMP alleged that the City failed to proceed in the manner required by law when it concluded that the Ordinance was not a project requiring the City to prepare an initial study analyzing environmental impacts under CEQA. UMMP alleged in the petition that the Ordinance was a project with the potential to result in a change to the environment because it would cause patients to drive across the City, increasing traffic and air pollutants; would shift or intensify development to certain areas of the City; and could increase the indoor cultivation of marijuana, which would have negative environmental impacts.

UMMP’s argument relied on the fundamental assumptions that based on the text of section 21080, subdivision (a), any zoning ordinance is necessarily a project. However, under the CEQA Guidelines, the enactment and amendment of a zoning ordinance is a project only if that action also creates “a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.” The CEQA Guidelines thus plainly rejected the bright-line rule advocated by UMMP, under which the enactment of a zoning ordinance is necessarily a project under CEQA, regardless of whether there is also the potential for a change in the environment. The court therefore found that the statutory interpretation adopted by the CEQA Guidelines was not clearly unauthorized and was not clearly erroneous.

UMMP also failed to establish that the enactment of the Ordinance could cause a reasonably foreseeable indirect physical change in the environment due to medical marijuana patients driving farther than they currently drive to obtain their medical marijuana. The court likewise rejected UMMP’s contention that the enactment of the Ordinance could cause a reasonably foreseeable change to the environment because patients in the City would decide to undertake their own indoor cultivation of marijuana rather than travel to inconveniently located cooperatives. UMMP’s final argument was that the cooperatives established under the Ordinance would have to be located somewhere, and “this may result in new construction activity.” According to UMMP, the possible construction activity would have an impact on the environment. However, this argument was purely speculative, as it assumed that the establishment of the cooperatives permitted under the Ordinance would require any new buildings to be constructed, as cooperatives could simply chose to locate in available commercial space in an existing building.

Having considered and rejected these three categories of possible environmental impact from the enactment of the Ordinance identified by UMMP, the court held that the enactment of the Ordinance did not constitute a project as defined in CEQA because it did not have a potential for resulting in a reasonably foreseeable indirect physical change in the environment.

Union of Medical Marijuana Patients, Inc. v City of San Diego, 2016 WL 5956980 (CA App. 10/14/16)