L.A. Delivery App Appeals Injunction

OCTOBER 13, 2015: A Los Angeles-based medical marijuana delivery app, Nestdrop, is appealing an injunction prohibiting it from operating in Los Angeles. The company was ordered to stop in December as the result of a city-initiated lawsuit against the business.

The arguments on both sides center around the proper interpretation of Proposition D, Los Angeles’ medical marijuana dispensary rules that were passed in 2013. The city claims that only patients and caregivers can deliver medical marijuana under Proposition D, while Nestdrop argues the city’s law does not explicitly ban delivery services or apps that are working in conjunction with dispensaries. The language of the ordinance allows dispensaries to operate “one location,” theoretically limiting businesses to one parcel of land–though it is hard to see how this could apply to a delivery service.

Furthermore, Nestdrop is arguing on appeal that Proposition D itself is invalid. A provision in Proposition D aims to prohibit delivery of medical marijuana by vehicles within the city, offering limited immunity for qualified patients and caregivers who drive a medical marijuana-containing vehicle, provided that the medical marijuana is for personal use by the patient or person who designated that primary caregiver. However, Nestdrop is arguing that this is preempted by the California Vehicle Code, which prohibits cities from enacting laws related to vehicle activity and travel without approval from the State Legislature or via ballot initiative. Because a separate provision of Proposition D requires the entire law to be invalidated if any provision that provides immunity to pre-ICO dispensaries (i.e., dispensaries operating legally before Proposition D) is found to be invalid, Nestdrop argues the entire law is invalid.

If Nestdrop’s appeal is successful, it could have major consequences in Los Angeles, both good and bad. It could pave the way for new businesses including more delivery services, but could also create regulatory chaos within the city. Stay tuned and we’ll keep you updated as the case develops.

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