[dsl]

There is no gray area here.

San Francisco can make murder legal and refuse to arrest people for it. State and federal law enforcement will just step in.

The DEA still busts dispensaries and grow operations in California for example, it just isn't newsworthy.

[int_19h]

It's a bit more complicated than that. When the state makes something legal and refuses to prosecute, it can do so because it possesses sufficient sovereignty for that under the commandeering doctrine. But the relationship between the state and its municipalities is not equivalent - the state has all the sovereignty while the municipalities only have such power that the state delegates to them, and that power can always be withdrawn (in the most extreme case, by de-chartering). Thus, the state can actually force San Francisco to remove this law, and compel its law enforcement agencies to enforce state law. It just chooses to not do so.