Wednesday, October 28, 2020

Create Good Cannabis Policy


You have a massive budget shortfall, you have laid off staff in multiple departments, you have pulled back on city services and still there is a shortfall for years to come.

Do you attempt yet another tax of your residents who are out of work and already struggling, or do we get creative and think outside the box?

When creating your cannabis policy that is both an ongoing revenue source to your city and invite a new industry that will be a good business partner here is what you need to know when determining where and how many legal cannabis licenses to allow. It has been 40+ years since the birth of the last new and exciting industry. The Governor's office has also deemed the legal cannabis industry as essential and continued to operate as all other essential industries with proper pandemic protocols in place.

A cannabis retail business applicant has taken on the task of working in a highly regulated industry; more than tobacco, more than alcohol, more than casinos and more than drug stores.  A good cannabis business operator, has a large labor force, hires locally, always diverse, has challenges to banking and tax preparation, the strictest track and trace and inventory control of the product. There is nothing else like it in America today, and rightfully so.  A major hurdle is finding the appropriate property business location and the State already has guidelines set forth to provide for setbacks of sensitive receptors: schools, daycare centers, etc.

Now for the difficult piece of the puzzle, the actual property.  Once you have your "green-zones" determined the applicant must find a property that is:
1. distant from sensitive receptors
2. the property owner will allow a retail cannabis dispensary as a tenant
3. the owner does not have a loan on the property that would likely get "called" should they allow tenancy
4. no access to traditional banking to purchase their own store 

Here is an example in San Mateo County.  Half Moon Bay used to be the ornamental flower capital of the western world, now decimated due to offshoring.  They chose to allow cannabis cultivation only, not retail, to backfill their agricultural history and to resurrect the greenhouses that lie fallow. Makes perfect sense only on paper.  The cannabis plant is very susceptible to mold and foggy climate. It has been over three years and no cultivator has applied for a license while their city continues to suffer budgetarily and this was all pre-pandemic. Half Moon Bay still struggles.

You may wish to tread shallow water and allow medical-only retail licensing but this is a non-starter.  In Santa Clara County with a current population of 1,940,000 residents holds roughly only 200 active medical license cards. The passage of adult-use in 2016 no longer makes a distinction between medical or recreational cannabis.

Be thoughtful with your approach but please also consider the largest swath of green-zone districts allowed.  The four items listed above are challenging and restrictive on its own.  No legal cannabis retail operator wants to be near your children, your schools, or your daycare centers. These are not their customer. Children and not able to enter the front door as a security person will scan your current identification before entering, no one is allowed to loiter on the business premises, the front of the store must be shielded from the operations inside the business.  These are already written into Proposition 64 passed by your residents in 2016.

Thank you for your time, I am always available, Sean Kali-rai, to answer your cannabis policy municipal questions as I have been integral with writing the City of San Jose cannabis policy in December of 2015 as it stands today.  The City of San Jose allows 16 legal cannabis retail businesses to operate before Proposition 64 and has the strictest guidelines in the state of California. These 16 operators are well run, they participate in community events, they promote from within, they are good neighbors to those who reside around them and with no issues of crime.