California Supreme Court considers hazy pot rules

SAN FRANCISCO (Reuters) - California Supreme Court justices on Tuesday suggested that state law might empower local governments to ban medical marijuana shops, in a case set to determine how far cities and counties can go in clamping down on the industry.

The case, which comes as elected officials across the nation grapple with how to handle a growing industry for the federally banned drug, pits the southern California city of Riverside against a medical pot dispensary it has sought to shut down, the Inland Empire Patients Health and Wellness Center.

California in 1996 became the first state in the nation to approve medical marijuana, but some residents have complained about dispensaries they consider a blight in their neighborhoods. Court papers show more than 180 California cities and counties have imposed bans on such dispensaries.

The California Supreme Court justices spent half of Tuesday's one-hour hearing questioning the dispensary's attorney, J. David Nick, about the legislature's intent in a 2003 law and subsequent amendments that set out certain rules governing medicinal pot.

The justices, who will issue a ruling by May, did appear to agree on one point - that California lawmakers have failed to enact a clear regulatory scheme for the sale of medical marijuana since medical marijuana was allowed in a 1996 voter initiative.

"If the legislature wanted to prevent localities from banning the dispensaries, why didn't they say so expressly?" asked Associate Justice Marvin Baxter.

"I think they did," Nick said. He argued that the legislature directed local governments to regulate, not prohibit, dispensaries.

"Can regulation ever amount to a prohibition?" Associate Justice Goodwin Liu asked.

"Absolutely not," Nick answered.

"The legislature knows how to say, ‘Thou shall not ban dispensaries,'" Associate Justice Ming Chin said. "They didn't say that."

CITY'S NO POT SHOP ARGUMENT

Jeffrey Dunn, the city of Riverside's attorney, said the California legislation aimed at simply allowing the use of medical marijuana. "It does not state anywhere we are prohibited from exercising our land-use authority," he said.

Patients, he added, can obtain marijuana from places other than storefront dispensaries.

The state high-court decision, in addition to affecting the validity of bans by cities and counties, could also determine to what extent local governments may impose other restrictions on medical pot sales.

Pot is currently allowed as medicine in 18 states and the District of Columbia and was legalized for recreational use in Washington state and Colorado in November, even as federal law continues to classify cannabis as an illegal narcotic.

The conflicting state and federal laws have set up confrontations between state and federal authorities, with U.S. prosecutors in California last year threatening to use civil-forfeiture laws to seize property in which dispensaries are operating, forcing scores of evictions and dispensary shutdowns.

Two Democratic members of the U.S. House of Representatives unveiled national legislation on Tuesday to allow states to decide how to regulate marijuana like beer or wine, but the legislation is expected to face opposition from conservatives.

While some California municipalities have banned dispensaries, others have tried to cash in on the industry by implementing local regulations and by taxing sales.

After the federal government cracked down on the world's largest dispensary, the city of Oakland sued the government in an effort to allow Harborside Health Center to continue selling marijuana to its 100,000 patients.

The city expects to collect $1.4 million in medical-pot sales this year.

(Editing by Alex Dobuzinskis, Cynthia Johnston and Lisa Shumaker)