The Morning Report
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On Tuesday, the San Diego City Council will be reviewing proposals to regulate marijuana.
Proposition 64, the statewide measure to allow recreational marijuana in California that passed in November, made it immediately legal for people over 21 to possess, transport, obtain or give away up to one ounce of cannabis. It also allowed households to cultivate up to six marijuana plants, as long as they were out of public view.
The commercial sale and taxation of recreational marijuana, though, will not go into effect until January 2018.
State laws for medical marijuana that passed in 2015 are also expected to go into full effect at the state level in January 2018, but some local governments have started regulating and issuing local medical marijuana-related licenses while the state was setting up the necessary agencies, information systems and regulations to begin issuing state-level licenses.
The proposals the Council will consider will deal with the commercial aspects of marijuana. But they will not only determine how the city would move forward with recreational marijuana, they’ll also reconsider some of the city’s medical marijuana policies.
Some of the proposals are fairly noncontroversial. For example, the city is proposing that the current medical marijuana dispensaries that have legal permits should also have the right to sell marijuana recreationally in San Diego.
The proposal would also clean up some technical definitions, like what qualifies as a park, which might open up more sites for potential dispensaries because they need to maintain a certain distance from places like parks and schools. Current rules and zoning limit where dispensaries are located and require that they be a certain distance from other dispensaries, schools, parks, churches and residences.
But two of the proposals have become a bit more contentious.
The first relates to delivery services. Rather than provide marijuana over the counter at a storefront dispensary, these services bring products to consumers’ doorsteps.
These have gone essentially unregulated in the San Diego. Delivery services for medical marijuana dispensaries are allowed for under state medical marijuana law – though the state will not issue licenses for any marijuana-related businesses, medical or not, until 2018.
Cities have had an opportunity to regulate medical marijuana locally, but San Diego hasn’t expressly prohibited them. Nor will the city give them business licenses, so while they aren’t explicitly illegal, they’re operating in a gray area.
The lack of regulation over deliveries has created an opening for dozens of delivery businesses, according to Weedmaps, an online community that tracks marijuana dispensaries and other related services. In comparison, there are only 15 permitted dispensaries in the city, not all of which are open. The city actively goes after illegal dispensaries, and even counting illegal dispensaries on Weedmaps, the number is dwarfed by delivery services.
The proposal that will come before the City Council Tuesday would regulate delivery services by tying them to existing permits for dispensaries. It’s unclear whether that means the dispensaries themselves would handle delivery services or whether they can contract out to other delivery operators.
The current legal dispensary operators are all for linking deliveries to dispensaries, though many think the way it’s laid out in the city’s proposal is vague. They also are concerned that the city hasn’t addressed how it would deal with delivery services that are based outside of the city of San Diego, but delivering to consumers within city limits.
Delivery operators aren’t happy, since the proposal might limit their opportunities and many would have to shutter their businesses. Some wouldn’t mind more regulation – they don’t like operating in the gray – but would prefer if dispensaries could subcontract out to independent delivery services or if the city could figure out a way to license independent delivery services.
The second issue is a sweeping prohibition on supply-chain activities for both recreational and medical marijuana. The city is considering banning activities like cultivation or growing, manufacturing and testing, which will be required under state law to ensure that products in legal dispensaries don’t include certain pesticides or traces of other substances that aren’t allowed.
For one, the move would leave many existing businesses that currently provide those services for the medical marijuana industry in flux. It’s uncertain whether they would be allowed to remain open if the prohibition passes.
Current dispensary owners also say that the prohibition would require them to get their products from outside the county. La Mesa passed a medical marijuana ordinance last year that may allow for these activities in a few locations, but it wouldn’t be enough to keep up with demand. Lemon Grove also passed an ordinance to allow medical marijuana dispensaries last year, but the city hasn’t yet brought forward policy proposals that would indicate whether cultivation and manufacturing would also be allowed. San Diego County currently has a moratorium on all medical marijuana-related activities and the Board of Supervisors will be voting on whether to ban medical marijuana cultivation and dispensaries before the moratorium ends in March.
There is no place in the county that is considering allowing these activities for recreational marijuana.
Having to go outside the county to test products before their sold and to cultivate could raise costs for local legal dispensaries and isn’t environmentally friendly, as trucking products from Los Angeles or Northern California would emit more greenhouse gases than if cultivation, manufacturing and testing happened locally.
Once state law goes into effect in 2018, legal marijuana retailers will have to track their product from seed to sale to ensure that it was grown, manufactured, tested and sold from businesses that are legal and licensed – something dispensary owners say will be more difficult if they can’t access these parts of the industry locally.
Even people in the biotech industry expressed concerns about this aspect of the proposal during public hearings – it may mean they couldn’t get involved in cannabis testing and research and development.
In December, the city’s planning commission recommended the City Council reject the piece of the proposal that would ban cultivating, manufacturing and testing. It said those aspects of the industry could and should provide jobs and tax revenue locally.