DIXON, Calif. — A group of 24 California cities and Santa Cruz County is suing California's Bureau of Cannabis Control.
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In January, the state approved a rule allowing licensed dispensaries to make marijuana deliveries anywhere in California, even in cities and counties that ban cannabis sales.
Now, those 25 local governments are suing the state to reverse that rule.
California has about 100 licensed marijuana delivery companies but not every city is welcoming them.
When California voters approved Prop 64 in 2016, it came with the understanding that any city or county that didn't want legal marijuana sales didn't have to allow them.
With the new rule allowing marijuana deliveries anywhere in the state, the local governments that have said "no" to cannabis feel the state is undermining them.
The City of Dixon is among the cities involved in the lawsuit.
"I think it's highly unfair that a community that doesn't want to have anything to do with cannabis in any way, to force them to allow cannabis to be delivered in their town,” Dixon city manager Jim Lindley told ABC10.
Dixon actually has a dispensary and a handful of other cannabis businesses, either up and running or in the works. A second dispensary is also on the way.
For the approximately 20,000 people of his city, Lindley said this lawsuit is not about banning marijuana; it's about making sure local dollars stay local.
"In the nine months or so that it's been in operation, we're averaging about $75,000 a month out of one dispensary. That's big revenue for the city," Lindley said. "We're not anti-marijuana. We're just trying to regulate it in a way that we can capture all the sales tax that is due us."
To that end, Lindley explained, the Dixon City Council approved a new ordinance just last month in response to the state’s cannabis delivery rule, requiring any courier service to register as a business with the city.
“We do that for everybody that comes to town,” Lindley said. “If it’s a solar company that comes to town to put in a solar thing on somebody’s roof, they have to apply for a business license, because they’re doing business in the city.”
Haley Andrew is the CEO and director of Dixon’s sole dispensary, Dixon Wellness. She said she’s in favor of marijuana delivery – something she plans on launching at her own store in the future, for customers within Dixon city limits.
“There’s people who are in hospice and have different terminal illnesses that... cannot come into the store, so that’s fine,” Andrew said. “Everybody should have the access that they need.”
She just wants it to be an even playing field for all businesses.
"I pay a 15 percent gross receipts operating tax. That is a hefty amount,” Andrew said, “so I would just like to know that every delivery that's coming into town would also have to pay the same tax bracket that I do."
She said legally operating businesses are all in the same fight against the illicit market, which is still thriving in the state of California.
"We’re all struggling out here,” Andrew said, “so every dollar counts. Every percent counts. It’s really important for us, for all of us, to be treated equally across the board.”
The California Cannabis Courier Association does not want to see California's current rule on statewide delivery overturned.
Eliza Maroney is a member of the CCCA, as well as co-founder and co-owner of cannabis subscription and delivery company Lucky Box Club.
"Licensed delivery services are responsible for remitting state and local taxes on all sales that occur within the state of California,” she explained, “so we are responsible for paying a local sales tax.”
Lindley said he has not seen any of that money in his city – and knows deliveries are happening in Dixon.
“I think the argument on the cannabis industry side about access is a valid one - that elderly people or people that don’t have transportation readily available should be able to get cannabis delivered,” Lindley said.
The CCCA advocates for marijuana delivery as a matter of access.
"It’s important that they have safe access to regulated cannabis that has been tested and is safe for consumption,” Maroney said. “It is important that people have access to their medicine, and many people live very far from actual storefront retailers.”
Steven Domingo is the CCCA president and said that by approving Prop 64, California voters indicated their feelings on legalizing cannabis sales.
“CCCA feels it’s the right of California residents to have legal cannabis goods delivered to the privacy of their homes like any other legal good,” he told ABC10.
By banning cannabis sales in general, he said, cities and counties that opt out of the legal marketplace are bolstering the black market.
“Not only are disabled elderly and veteran consumers disadvantaged from that but tax revenue is stifled and the illicit market bolstered by doing so,” Domingo said.
The state launched legal sales of both recreational and medicinal cannabis Jan. 1, 2018, but even the Bureau of Cannabis Control admitted that it was not a perfect system. After voters approved Prop 64, the state jumped into action, creating a framework of rules that would allow cities and counties that wanted to allow sales to be able to do so by the time the law went into effect in 2018.
Figuring out a process for legal delivery that balances cities’ and counties’ local control with cannabis users’ fair access to the product is the next step in hashing out this evolving regulatory landscape.
“This is like the Wild West,” Lindley said. “We just got legal marijuana here in the state, so we’re trying to figure out the safest and best way to deal with that.”
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