Going To Pot: Marijuana And Land Use Disputes

Be sure to prepare accordingly as local governments continue to change how they regulate marijuana businesses in states with legalized cannabis.

With increasing frequency, cannabis companies are coming to us with land use and zoning issues that end up in litigation with their local governments. Cannabis companies are having a tough time complying with local laws in cities and counties that either ban cannabis businesses or that keep revisiting and changing their marijuana laws.

One of the toughest situations our cannabis litigation lawyers face is when a city or a county enacts a new ordinance that prohibits our client’s cannabis business in its existing location after our client invested substantial time and money locating in a spot that’s now been declared off limits. Though there are countless land use litigation issues relating to the cannabis industry, this post focuses on the one issue we most frequently face on behalf of our clients: non-conforming uses.

Generally, a non-conforming use is a use of real property allowed at the time it was lawfully established, but which is no longer permitted because of a change in laws. Though state law governs whether non-conforming uses are permitted, state law typically does not directly regulate non-conforming uses. Consequently, local governments have a great deal of discretion on how they deal with the issue based on their police powers.

If a local government enacts a zoning ordinance that renders a previously permitted use non-conforming, it does not necessarily mean that the non-conforming use is automatically prohibited in the zone. Though some states have regulations that allow for eliminating non-conforming uses, in many states, the non-conforming use can continue if it was properly established before any zoning changes. The key here is that the business has to have been lawfully established before there were changes in the law that made the business a non-conforming use. In all states, an illegal use cannot obtain status as a non-conforming use.

A minority of states have non-conforming use laws where the submission of a complete building permit for a proposed use, for example, can constitute “lawful establishment” and a vested right in the property, but the majority of states require there to have been “substantial development” on the property and that the prior use to have been “continuous” to secure non-conforming status.

There are also catches to protecting your business’s non-conforming use status as it is neither unconditional nor does it last forever.  The non-conforming use is still subject to reasonable regulations of the municipality (like additional permitting and fees). Localities also typically prohibit any expansion of non-conforming uses and such uses can generally be terminated if there is intent to discontinue or change the use for a period of time controlled by local laws. Zoning ordinances may also provide for terminating non-conforming uses after a sufficient period of time for the property user/owner to recover its investment in the use.

After determining whether state law allows for the establishment of non-conforming uses, the guiding line with any land use compliance or dispute is ultimately going to be the governing local code — each city and county may handle non-conforming uses differently. If your business is running into land use or zoning issues with your local government, that’s going to be the first place to start to determine your rights. So, be sure to read your city or county code carefully and be sure to prepare accordingly as local governments continue to change how they regulate marijuana businesses in states with legalized cannabis.

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Hilary Bricken is an attorney at Harris Moure, PLLC in Seattle and she chairs the firm’s Canna Law Group. Her practice consists of representing marijuana businesses of all sizes in multiple states on matters relating to licensing, corporate formation and contracts, commercial litigation, and intellectual property. Named one of the 100 most influential people in the cannabis industry in 2014, Hilary is also lead editor of the Canna Law Blog. You can reach her by email at hilary@harrismoure.com.

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