Nestdrop and the Court of Appeal Decision Heard ’Round the World

Posted by Meital Manzuri, Esq. | Apr 20, 2016 | 0 Comments

A judge recently denied Nestdrop's appeal that it should be allowed to keep delivering medical cannabis. Though it wasn't the decision the company was looking for, the publicity has helped fuel Nestdrop's expansion elsewhere. To those hoping for a convenient method to get their medication, the wait continues.

An appellate court has upheld an injunction against delivery app Nestdrop, nixing legal cannabis delivery in Los Angeles. So Angelenos hoping to get (legal) cannabis delivery via the convenience of a smartphone app can now create more storage space on their phones.

So What is The Deal?

In 2013, Los Angeles-based Nestdrop launched what it hailed as the country's first app-based on-demand delivery service. Although the app initially focused on delivering alcohol to customers in under an hour, in late 2014, Nestdrop partnered with MMJ dispensaries around Los Angeles to arrange MMJ deliveries, as well. Up the wow factor – Nestdrop allowed users to order alcohol and medical marijuana from local liquor or MMJ shops. What a combo! Accordingly, the premise of the Nestdrop business model is that they do not actually sell marijuana or alcohol – rather serve as a delivery system only,

Unfortunately for these entrepreneurs, however, only days after starting their MMJ deliveries, Nestdrop received a complaint from Los Angeles City Attorney Mike Feuer.

The Legal Issue

Feuer's complaint alleged that Nestdrop's business model attempted to circumvent provisions in Proposition D which explicitly state that MMJ delivery service is prohibited. Prop D is the 2013 voter-approved law that limits the number of medical marijuana dispensaries in Los Angeles.

Furthermore, the city law stipulates that an MMJ business keep at least 1,000 feet from schools and 600 feet from other MMJ businesses, youth centers, child care centers, churches, libraries, parks, or addiction-treatment facilities. Of course, anyone who's ever driven throughout Los Angeles knows that one of these structures is found on nearly every block. Drivers making MMJ deliveries will thus be violating the law because they naturally run up against these boundaries.

A Los Angeles County Superior Court judge agreed with the City Attorney's complaint and issued an injunction that Nestdrop stop delivering marijuana.

Thus, legal delivery is still a no-go.

Naturally, Nestdrop founders Joseph Pycher and Roddy Radnia disagreed and filed an appeal. Pycher and Radnia claimed that since the company does not operate an MMJ dispensary, or even handle or distribute marijuana, it isn't subject to Prop D. Pycher and Radnia say that the nature of their business is misunderstood – Nestdrop is a communications technology app that merely connects patients to collectives, who are then responsible for delivering the marijuana.

Appeal Result

In March, 2016, a state appellate court upheld the initial injunction. Or, depending on your perspective, it denied Nestdrop's appeal. Regardless of where you stand, the result is the same: Nestdrop must amend its app so that it no longer delivers medical marijuana in Los Angeles.

The ruling panel decided that, not only does Prop D prohibit vehicular marijuana deliveries within city limits, but also that it would be difficult to navigate most of the city's streets without breaking the law due to the proximity and plentitude of schools, public parks, churches, et al.

Now that this issue has ostensibly been put to rest, other delivery services around Los Angeles had better be on alert. Nestdrop was most likely targeted first due to its size and reach, but the hundreds of MMJ delivery services that still exist are now on Feuer's radar.

Repercussions and What's Ahead

Nestdrop looks like it will be okay. The publicity that the injunction brought has been a boon.

Since it appealed last year, Nestdrop has expanded. It serves cities surrounding Los Angeles, such as Glendale and Pasadena, as well as other parts of the Southland (e.g., Oceanside and San Diego), but it has also branched out into San Francisco, Portland, and Seattle, among others.

As for Los Angeles, Prop D remains in effect, so delivery of medical marijuana continues to be prohibited. Patients with extreme needs still cannot utilize the convenience that MMJ delivery obviously brings.

However, business opportunities do exist for others to at least partially fill the void.

Los Angeles weed service Nugg recently stepped onto the scene, operating similar to how Nestdrop operated, yet Nugg has managed to avoid an injunction. Nugg co-founder Alex Milligan claims his company operates fully in compliance with Prop D because it doesn't deliver inside forbidden boundaries as they are drawn in Prop D. Milligan also says that Nugg works closely with attorneys to make sure it's following all the laws of the municipalities in which it operates.

The bottom line? Until Prop D is amended or superseded by another ordinance, delivery of medical marijuana is almost completely prohibited in Los Angeles. Your dream delivery tandem of marijuana, pizza and a beer remains just that – a dream.

Keep up with Manzuri Law as this and other Prop D issues evolve.

About the Author

Meital Manzuri, Esq.

Managing Partner.

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