Court Rules Grower Cannot Use Access Easement for Cannabis Purposes Without Servient Landowner’s Consent
This post was primarily authored by Daniel Zarchy, a “Rising Star” for five of the past six years who is a litigation attorney at Patton Sullivan Brodehl LLP.
While many Californians consider the legality of cannabis to be settled law, the ongoing conflict between California and federal laws on the subject continue to give rise to unexpected outcomes when it comes to real property law.
On October 29, 2024, the California Court of Appeal reached a decision in JCCrandall LLC v. County of Santa Barbara. In that case, JCCrandall asked the Court of Appeal to review the County’s issuance of a Conditional Use Permit (CUP) allowing a company called Santa Rita Holdings, Inc., to cultivate cannabis. While the cannabis would not be grown on JCCrandall’s land, Santa Rita could not access the parcel where the cannabis would be growing without using an easement that crossed JCCrandall’s land. The owner of the land to be cultivated by Santa Rita Holdings had an easement — granted by deed in 1998 — for ingress and egress across JCCrandall’s land.
JCCrandall objected to the CUP and Santa Rita’s use of the easement for cannabis cultivation purposes. The County issued the CUP over JCCrandall’s objection. In doing so, the County found that the roads and highways were “adequate” for the proposed use, in part because the easement had been historically used for agricultural purposes. The trial court upheld the County’s decision.
However, the Court of Appeal reversed the trial court’s decision and struck down the CUP for two reasons.
First, under California Business and Professions Code section 26051.5, an applicant for a license to grow cannabis must demonstrate that the landowner “where the commercial cannabis activity will occur” has consented to the cannabis activities. The Court interpreted this provision to require consent not just by the landowner where the growing would occur, but also by “the owners of servient tenants over which cannabis is transported.” Here, JCCrandall did not provide the required consent.
Second, the Court of Appeal explained that while many Californians essentially treat cannabis as legal – pointing to California Civil Code 1550.5, which states that cannabis may be the lawful object of a contract, is not contrary to law or good morals, and not against public policy – it remains illegal on a federal level. The court examined whether the grower’s proposed use of the easement for cannabis was consistent with the historical “agricultural” use. Given that cannabis was illegal under both federal and state law when the deeded easement was granted in 1998, and because an easement by definition cannot be intended for an illegal purpose, the Court held that the illegal transport of cannabis was beyond the permissible scope of the easement. The Court therefore held that the County erred in finding that the “streets and highways are adequate and properly designed to carry the type and quantity of traffic generated by the proposed use,” and struck down the CUP.
In its decision, the Court explained that it was not addressing the constitutionality of Civil Code 1550.5 and did not render an opinion on whether “contracting parties who voluntarily agree to enter into the cannabis business” could still do so, but limited its decision to this case where the CUP essentially forced JCCrandall to allow its property to be used for the transportation of cannabis.
This case should serve as a warning for all parties in the cannabis industry. It is crucial to know whose land is being used in any manner related to the cannabis business – even something as mundane as an access easement – and ensure that all landowners understand and consent to such use. While such consent cannot, on its own, overcome federal law declaring cannabis illegal, it provides the best shot to at least stay on the right side of California law.