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Local Government Impact on Cannabis Industry

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Marijuana legislation has been a hot-button topic for well over a decade now. Many states have legalized some use of the drug - be it recreational, medical, or scientific, while realizing benefits of doing so, such as massive profits from the taxes generated through the use of the product. Many other states lag behind.

However, much of the regulation impacting cannabis operations is being done at the local government level as opposed to the federal level. Here are examples of how local governments are shaping the conditions for this industry.


One of the main strategies local governments are implementing to control marijuana and its byproducts in their communities is zoning laws. Primarily this is being accomplished through buffering and density limitations.

Even in places where weed has been legal for many years, available space for dispensaries to operate has been significantly limited by zoning laws. For example:

  • Colorado, a state that has had legal access to marijuana since 2012, only approximately 10% of land is zoned for dispensing purposes.

  • In North Carolina, a bill was recently floated that would impose a 1,000 yard buffer zone between any medical marijuana dispensary and all schools, churches, and parks.

  • In Chicago, a lottery system was implemented to curb the number of dispensaries that opened, with a low cap to ensure a lack of proliferation.

Alternatively, other communities are holding discussions to outright ban Cannabis establishments.

Town of Woodbury (CT) | Agenda | September 29, 2021

A Public Hearing on a Potential Ordinance Banning Cannabis Establishments in Town of Woodbury.

City of Fort Bragg (CA) | Agenda | Sep 27, 2021

This ordinance is intended to protect the public health, safety, and welfare by prohibiting the establishment of any new cannabis dispensary use with a MUP or expansion or modification of those uses while the City studies and enacts new land use regulations.

DELTA-8 Loophole

Other states' reluctance to decriminalize the use and growth of hemp results mostly from the plant containing high amounts of delta-9 tetrahydrocannabinol (THC), the actual chemical that produces the high.

In areas where marijuana is still illegal, there has emerged a legal grey area that has allowed a THC analog to explode in popularity: delta-8 THC.

It, essentially, is delta-9’s little brother - slightly less potent, and readily less available from the flower itself. Normally, there is perhaps .01% delta-9 concentration in any given plant, so it requires extraction and modification to be grown at higher levels.

Many THC manufacturers have started creating candies, vape cartridges, and full flowers of delta-8 to sell in states where big brother delta-9 THC is still illegal.

While the average man on the street may rejoice at this loophole, there are almost as many folks against the idea.

The loophole originates in a 2018 farming bill, which allows for farmers to grow hemp containing <.03% THC. However, the bill did not address delta-8, which means that, at a federal level, it is currently not regulated whatsoever.

Since then, 14 states have indeed passed legislation halting the production and sale of delta-8, citing a lack of research into the new cannabinoid. A real “better safe than sorry” feeling has emerged from these states, regardless of their citizens’ feelings on the plant.

Many communities seem to be taking early steps to confront this new drug, with Wood County in Wisconsin taking on the task of a community scan to see where delta-8 products are sold, how close these vendors are to schools or playgrounds, and what types of products are being sold.

Wood County, WI | Agenda Document | Sep 21, 2021

Plans for completing a community scan on Delta-8 THC. This substance can be found throughout Wood County and is being sold the same way Delta-9 THC is sold in states with marijuana legalization laws. These products are deemed as legal under the Farm Hemp bill and are unregulated. The chemical produces a similar euphoric "high" (only less intense), than Delta-9 THC. There is little research on Delta-8 THC, so there are several unknowns at this time. A community scan will tell us where the products are sold, how close these retailers are to youth-serving locations (such as schools, parks, walking paths, etc.), what type of products are sold, what is included on packaging, how potent these products are.

Also, in Huron, South Dakota, the zoning board had to meet recently to update their description of medical marijuana and their zoning requirements for dispensaries to be farther away from parks and schools.

City of Huron (SD) | Agenda | September 8, 2021

We used the State's definition of cannabis because it is different than law enforcement due to Delta 8 and the THC level. Delta 9 is illegal, but Delta 8 is not due to the low THC level and is used for medical purposes. Barry explained the remaining definitions noting that the word "an establishment" is used to describe all of the facilities or a dispensary. A cultivation facility for medical cannabis must be a "food grade" quality facility and meet all of those requirements as per the state.

The current situation surrounding delta-8 as a whole is murky. Texas nearly banned the substance earlier this year, but the provision was struck from the bill before a vote took place.

Plus, with this loophole active, more and more products that aren’t delta-9 (the classic THC most people are familiar with) are flooding head shops. THCP, Delta-10, CBD, and other items are trying to fill any gaps that the lack of access to delta-9 has led to. With the future of this loophole uncertain, delta-8 is certainly a topic to keep an eye on.

In regards to regulating delta-8, local governments may act in the following ways:

  • Passing ordinances preventing the growth of the plant in the area.
  • Restrict the sale of products made with delta-8.
  • Conversely, embrace the substance as an alternative to the original plant and permit businesses to grow and sell products containing delta-8.

Possession & Consumption

Even in states where it may be legal to possess marijuana, that doesn’t mean that citizens are freely allowed to ingest it wherever they please. Patchouge, New York, has gone the route of passing an ordinance that treats marijuana smoke as cigarette smoke, in that only certain areas of town allow smoking outside of personal property.

Village of Patchogue, NY | Agenda | Sep 27, 2021

Request approval to amend section 302-2.1 of Chapter 302 of the Village Code to prohibit the smoking of cannabis tobacco, and similar substances on Village property and other locations within the Village.

It will be important to keep an eye on changes that affect consumers' access to cannabis products. As challenges and risks are put in place to possessing and consuming these products, the potential customer base can quickly be eroded.

Another factor to be on the lookout for is sentiment in nearby communities. As issues like these are adopted into laws and ordinances, they tend to sweep through neighboring cities and counties.

Taxes & Fees

One of the major appeals of allowing cannabis operations within a municipality is the additional revenue and additional programs it could support. These primarily show up in the form of license fees for new businesses and the tax on retail sales of the products.

City of Great Falls (MT) | Agenda | Sep 27, 2021

We recommend that if the city were to receive recreational marijuana tax revenue, that the City Commission use all of this tax revenue to support public safety. The legislature allows cities and counties to tax these funds for local resources. This can provide a revenue stream for various recommendations.

It will be important to stay current on proposed changes to applicable fees and taxes as these have direct impacts on an organization's bottom line and can go from discussion to on the books very quickly in local government.


From seed to sale, expect local government regulation of the Cannabis industry to increase. With Curate, you can be alerted before these issues go to vote and know when they’re first being discussed. This gives you the opportunity to advocate for your position and help shape the conditions your business operates.

See the Cannabis issues showing up today in your local government. Schedule a customized demo of the Curate platform.

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