This post was authored by Matthew Loescher, Esq.
This case arose after Santa Cruz County law enforcement officers seized more than 2,000 marijuana plants from a medical marijuana dispensary for violating a local ordinance restricting cannabis cultivation. The local ordinance at issue prohibited any medical cannabis operation from cultivating more than 99 plants, while plaintiff’s dispensary was growing thousands of marijuana plants. When the dispensary sued to recover the marijuana, the county claimed it had no obligation to return the plants since the dispensary violated the ordinance. The trial court agreed and sustained the county’s demurrer without leave to amend.
On appeal, the county asserts that because plaintiff’s dispensary violated a local ordinance restricting cannabis cultivation within the county, the marijuana was illegally possessed and plaintiff had no right to its return. The court found that the illegal property exception applied only where the property in question was per se illegal to possess. The County argued that its cannabis restriction was a health and safety ordinance and not a land use regulation, noting that the ordinance was codified in Title 7 of the County Code – entitled “Health and Safety.” On its face the ordinance restricted the manner in which land can be used, effectively making it a zoning regulation. Nevertheless, possession of medical cannabis, by those qualified according to state law, was not a crime. Thus, marijuana possessed for medical purposes is in compliance with state standards not contraband per se.
In addition to the claims seeking return of property, plaintiff sought damages for trespass, conversion, and inverse condemnation. Here, Plaintiff commenced its lawsuit within six months of the county’s rejection of the two claims for damages it submitted; however, plaintiff was a corporation, and at the time it filed the lawsuit its corporate status was suspended by the Secretary of State for failure to pay taxes. The court noted that a suspended corporation loses all rights and privileges under the law, including the right to prosecute a lawsuit. Nevertheless, Plaintiff argued its suit for damages was timely under the rule that a revival of corporate powers retroactively validates any procedural actions taken during the period of suspension. The court rejected this contention, holding that the application of a statute of limitations was a substantive defense, not a procedural matter. Therefore, Plaintiff’s causes of action for damages were found to be time barred under the Government Claims Act.
Granny Purps, Inc. v County of Santa Cruz, 53 Cal. App. 5th 1 (8/5/2020)
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