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Where There’s Smoke There’s Water: THE CONUNDRUM OF CANNABIS FARMING IN CALIFORNIA WITH FEDERAL PROJECT WATER

The conflict between federal law and the recent actions of several states, including California, in the legalization of cannabis use and cultivation is well known. This conflict extends to the use of water for cannabis cultivation in situations where the water supply originates from a federal project.

In 1970, Congress enacted the Controlled Substances Act (“CSA”) prohibiting the cultivation of cannabis.[1] California voters’ 2016 approval of the Adult Use of Marijuana Act (Proposition 64) legalized the use, possession, sale and cultivation of cannabis within the state. As a result of these two laws, California permits the use of water for irrigation of cannabis and the federal law characterizes it as illegal. These laws may be on a collision course as farmers with federal water supply contracts begin to contemplate the thought of using federal water for cannabis cultivation.[2] Here is why.

United States Supreme Court Justice Rehnquist’s 1978 opinion in California v. United States[3] represented a stunning reversal[4] of national water policy away from the federal government and toward the states. In short, California v. United States established that Section 8 of the Reclamation Act of 1902 subordinated the United States Bureau of Reclamation’s project operations to state water laws unless Congress had clearly declared a contrary intention.[5]

Section 8 of the Act provides in relevant part:

“nothing in this Act shall be construed as affecting or intended to affect or to in any way interfere with the laws of any State or Territory relating to the control, appropriation, use, or distribution of water used in irrigation, . . . and the Secretary of the Interior in carrying out the provisions of this Act, shall proceed in conformity with such laws. . . .”

In evaluating whether the Bureau of Reclamation was obliged to comply with conditions applied to its operation of the Central Valley Project or was otherwise exempt pursuant to the doctrine of sovereign immunity, the Supreme Court held:

“Under the clear language of § 8 and in light of its legislative history, a State may impose any condition on ‛control, appropriation, use or distribution of water’ in a federal reclamation project that is not inconsistent with clear congressional directives respecting the project.”[6] (emphasis added)

California v. United States is the law of the land and the Bureau of Reclamation now routinely complies with the regulatory decisions of the State Water Resources Control Board (SWRCB).

What does this have to do with cannabis farming? All water used in California must meet its constitutional requirements of reasonable and beneficial use.[7] The simplest translation is that water must be used for a beneficial purpose under reasonable means.[8] And, this is where the trouble arises.

On the one hand, California law authorizes the cultivation of cannabis. Cultivation of cannabis is similar to other farming and Water Code §106 declares irrigation to be a beneficial use. The SWRCB has adopted permissive standards that condition the use of water for the irrigation of cannabis.[9] Thus, for all those cannabis farmers in California that will use native waters of the state under their own independent water rights, the requirement to vest a water right—applying water to a beneficial use—will likely be indistinguishable from other agriculture. That is, a cannabis farmer will be required to follow the applicable common law and statutory requirements and their rights will vest in a manner similar to other vested water rights as private property.

On the other hand, for those relying upon the Bureau of Reclamation to supply their water for irrigation, the puzzle is made significantly more complex by the existence of the CSA. Specifically, California v. United States tells us that the Bureau of Reclamation must respect state water laws in the operation of its projects and in the distribution of its water. As California enables and authorizes the use of water for cannabis farming, it is a prima facie beneficial use.[10] However, as the title of the piece foreshadows, this is not the end of the inquiry.

This follows because Congress has declared cannabis cultivation to be illegal.[11] And as long as this congressional declaration stands, it is hard to believe that the CSA does not constitute clear direction as to the use of project water. In order to provide additional clarity, the Bureau of Reclamation issued a Temporary Release to provide a “clear statement” of intent to “operate consistently” with the CSA with regard to “the potential use of Reclamation water for the production of marijuana.”[12] This policy governs Reclamation conduct and works to ensure that Reclamation is not complicit in violations of the CSA. The state water law deference mandated by California v. United States or a decision not to criminally enforce the CSA will not overcome Congress’ clear directives and may be raised by third parties with standing (competing users/beneficial uses) to raise the challenge to the propriety of the Bureau’s deliveries.

The present Reclamation policy is set to expire May 16, 2018. Some hope for a change or softening of the policy to comport with state pronouncements legalizing cannabis cultivation. However, unless and until there is a marked change in clear congressional intent on cannabis cultivation under the CSA, it is hard to conceive how Reclamation’s deliveries of water for cannabis cultivation—an illegal purpose—are not subject to substantial risk of litigation and curtailment regardless of a relaxation or change in Bureau of Reclamation policy.

Author: Scott Slater

Author: Bradley Herrema


[1] The Controlled Substances Act of 1970 (CSA) and its implementing regulations prohibit the cultivation of marijuana, as defined at subsection 102(16) of the CSA (codified at 21 U.S.C. 802(16).

[2] (www.rgj.com/story/news/marijuana/2018/02/01/can-marijuana-save-dying-town-california-arizona-border/1086062001).

[3] California v. United States (1978) 438 U.S. 645.

[4] Ivanhoe Irrigation District v. McCracken, (1958) 357 U.S. 275; City of Fresno v. California, (1963) 372 U.S. 627; and Arizona v. California, 373 U.S. 546; are disavowed California v. United States 438 U.S. 645, 653-679.

[5] California v. United States (1978) 438 U.S. 645.

[6] California v. United States (1978) 438 U.S. 645, 646.

[7] California Constitution Art X, §2; Millview County Water Dist. v. SWRCB (2014) 229 Cal.App.4th 879, 891 [177 Cal.Rptr. 3d 735] modified on denial of rehearing, petition for review denied.

[8] See Tulare Irrigation District v. Lindsay-Strathmore Irrigation District (1935) 3 Cal.2d 489, 572-574; California Pastoral & Agricultural Co. v. Madera Canal & Irr. Co. (1914) 167 Cal. 78, 85.]; See e.g. 23 C.C.R., § 659.

[9] Water Code §13149; C.C.R. Title 23 § 2925; SWRCB Resolution Establishing General Conditions to be Applied to Small Irrigation Use Registrations for Cannabis Cultivation; https://www.waterboards.ca.gov/water_issues/programs/cannabis.

[10] Water Code §106

[11] United States Controlled Substances Act 21 U.S.C § 801; Gonzales v. Raich (2005) 545 U.S. 1.

[12] Reclamation Manual Policy (PEC TRMR-63) Expires 5-16-18.

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