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A California court ruled this week that individual cities cannot issue rules banning state-sanctioned marijuana dispensaries so long as the drug is grown on site — and while that sounds like a win for pot shops, a leading advocate is warning that it could spell big trouble for California’s marijuana retail industry.

“Scarcely any dispensaries grow marijuana on site due to security issues,” Dale Gieringer, director of the California chapter of the National Organization for the Reform of Marijuana Laws (NORML), told Raw Story on Friday. “First, there is the problem of theft; secondly, the problem of federal raids. ”

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The Obama administration initially took a mostly hands-off approach to marijuana enforcement in states where voters had approved it for medicinal use. However, U.S. Attorneys in recent years have been aggressively prosecuting a growing number of dispensaries in states like California and Washington, saying they will go after anyone who is breaking federal law.

“The feds typically focus on cases where they can ask for a 5-year mandatory minimum,” Gieringer added. ” The threshold for the mandatory minimum is 100 plants for cultivation, or 100 kilograms for possession/distribution.”

Dispensary owners know this all too well, so they keep the locations of their gardens secret — but California’s Fourth District Court of Appeals ruled on Wednesday that the legislature had intended dispensaries to grow marijuana on site, which could complicate business tremendously and make the largest dispensaries a huge target for federal raids.

“Dispensaries rarely have 100 kilos on hand [today],” Gieringer explained. “However, indoor collective gardens commonly exceed 100 plants. Therefore, dispensaries like to keep their gardens hidden off-site.”

Because of the ruling, California’s pot shops could be forced to scale down dramatically, bring their gardens above-ground and face greater scrutiny by state and local officials, effectively undercutting the whole industry.

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The dispute that produced Wednesday’s ruling boiled down to zoning laws in the City of Lake Forest, which attempted to shut down the Evergreen Holistic Collective based upon a nuisance claim.

A trial court ruled in favor of the city and issued an injunction to shut the dispensary down, but the appeals court struck down that injunction on the grounds that cities may not ban “what the Legislature has authorized.”

Citing state law granting legal protections to marijuana dispensaries and patients, the three-judge court found that “qualified medical marijuana patients and their primary caregivers” are exempt “not only from criminal prosecution for authorized collective or cooperative activities, but also from nuisance abatement proceedings.”

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“Thus, the Legislature has determined the activities it authorized at collective or cooperative cultivation sites, including a dispensary function, do not constitute a nuisance,” they wrote.

The appeals court reversed the ban because the city considered all marijuana shops to be a nuisance, and therefore banned under its zoning laws. The case has since been sent back to the trial judge for further hearings.

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(H/T: OC Weekly)

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