Delayed and Confused

With new regulations likely to derail the Jan. 1 rollout of legal cannabis sales, dispensaries face uncertainty and sticky setbacks.

(Courtesy Photo)

The blunt truth is that San Francisco dispensaries probably won’t be selling recreational marijuana on Jan. 1, 2018, despite Californians’ approval last November of the Prop. 64 Adult Use of Marijuana Act. Sup. Jeff Sheehy has proposed a broad new set of regulations intended to create economic fairness in the cannabis industry, but the proposal will take so long to hash out that it’s likely local dispensaries won’t be allowed to sell to people without medical marijuana cards on the first of the year.

“Under the current proposal, the city will not be issuing adult use permits by Jan. 1,” San Francisco Office of Cannabis Director Nicole Elliott tells SF Weekly.

That date is creeping closer, but the rules are getting more complicated rather than clearer. Throw in some sketchy involvement from out-of-town anti-drug crusaders and recent legislative setbacks, and the future of recreational cannabis in San Francisco is suddenly very hazy.

The biggest delay comes from Sheehy’s proposed “equity” legislation, which has broad support on the Board of Supervisors and from Mayor Ed Lee — but if passed, looks certain to create a delay for recreational sales in San Francisco.

The equity rules are intended “to promote equitable ownership and employment opportunities in the cannabis industry.” That means establishing guidelines to make sure communities of color and people incarcerated in the War on Drugs get a fair shot at the fortunes to be made in the legal marijuana market.

“San Francisco led the effort to pass Proposition 215 in 1996,” Sheehy said at the Board meeting where he introduced the legislation. “We must protect and build on that legacy while ensuring that the new adult-use industry is equitable.”

Elliot agrees.

“As the legislation contemplates, an equity program should be established first,” she says. “Then operators would have to go through an application process, including changing their land use from medical to medical/adult-use, and receive a state license before being authorized to legally sell adult-use.”

If that sounds like it will be complicated and time-consuming, it will. Elliott is tasked with writing the equity legislation with help from the Human Rights Commission, and those proposals are scheduled to be submitted by Nov. 1. The earliest the Board of Supervisors could approve that legislation would be at its Nov. 7 meeting.

And even if the Board passes the measure immediately, individual dispensaries would then have to go through a Planning Commission process to get their land-use permits approved for recreational marijuana sales. After that, a separate state licensing process looms for any dispensary hoping to sell adult-use marijuana.

These bureaucratic hurdles would make it impossible for a San Francisco dispensary to be licensed in the two-month window between a November passage of equity legislation and Jan. 1.

Equity legislation is not unique in the cannabis industry; Oakland also has equity guidelines in its cannabis business application process. But Oakland took more than a year to create that framework, a timeline that does not bode well for San Francisco.

The Office of Cannabis has already determined that no adult-use marijuana sales permits will be granted until the equity program is established. And while there will be a process for existing medical dispensaries to be relicensed as recreational-use dispensaries, the new equity applications will get priority approval.

That’s nice for some up-and-coming entrepreneurs who qualify for the preferred status, but it’s a real setback for businesses and marijuana enthusiasts who were counting on that Jan. 1 kickoff — and all the jobs, revenue, and tourism that would come with it. Those dollars will presumably still roll in, but now we have no idea when.

That uncertainty doesn’t help the marijuana tourism industry, which is booming in other recreational-use states. Colorado had its most lucrative year for money spent on tourist visitations after legalizing adult use.

Tourists know that California approved recreational marijuana, and are showing up expecting to buy.

“They’re already looking for it,” Cafe Flore co-owner Terrance Alan said at a recent Planning Commission meeting. “They come in and they say, ‘Where can I get my cannabis?’ ”

 

Finding that cannabis will be even harder for tourists and locals alike after a series of recent dispensary bans and moratoriums choked the local industry. In late July, Sup. Ahsha Safai pushed through a ban on any new dispensaries opening in his Outer Mission/Excelsior District. And in September, the Board of Supervisors passed a 45-day moratorium on the approval of any new cannabis dispensaries in San Francisco.

But the biggest blow came last week when the supervisors shot down a dispensary that had already been approved. Acting on an appeal from the Sacramento-based Pacific Justice Institute — a right-wing legal fund described by the Southern Poverty Law Center as an “anti-LGBT hate group — the Board revoked the medical cannabis permit for a Sunset location of well-regarded dispensary the Apothecarium.

Pacific Justice Institute attorney Ray Hacke gave an ill-informed presentation whose dog-whistle racism left the supervisors slack-jawed.

“The Apothecarium is no different than a street-level crack dealer,” Hacke said, claiming the luxury dispensary would create “extraordinary and unsustainable demand on city police” and “expose children to the evils of drug trafficking.”

In the end, nine supervisors voted to revoke the Apothecarium’s Planning Commission approval. The reason? A huge, organized turnout showed up at the meeting, and engaged in clearly coordinated group shouts. The scene was reminiscent of a March 2017 Taraval Station community meeting where an unruly crowd yelled down Apothecarium representatives before they could speak, Afterward, the dispensary alleged that PJI had brought in protesters from outside the district.

“There was clearly a lot of political gamesmanship around this vote,” Apothecarium spokesperson Eliot Dobris tells SF Weekly. “The comments from supervisors about the Apothecarium’s stellar reputation and their disdain for PJI clearly wasn’t reflected in the vote.

“I think in the ensuing days we will learn that there is more to this story.” Dobris adds.

Funny he should mention this. SF Weekly has been looking into a separate-but-similar opposition campaign being waged against a proposed Barbary Coast dispensary location, some 15 blocks away in the Sunset.

That campaign has placed posters in shops throughout the neighborhood. These posters are misspelled, poorly punctuated, all-caps messes that say, “The Barbary Coast Collective is trying to open a cannibus ‘weed, mariuana, drug’ club in our neighborhood. Lets put a stop to this now. Let your voices be heard!!”

SF Weekly supports the political involvement of anyone, regardless of their language or grammar level. But these posters, attributed to a group called No Weed On Irving Street Ever — have a curious connection to the Apothecarium opposition.

While purporting to oppose an Irving Street Barbary Coast dispensary, NWOISE’s website also has images of several flyers for meetings opposing the  Apothecarium. Both the anti-Apothecarium and anti-Barbary Coast flyers list the same contact information. (SF Weekly reached out but has not received a response.)

There’s nothing wrong with neighborhood activists being involved with two different causes. But it should be noted that one of these causes employed out-of-town support from a right-wing legal fund whose previous shenanigans have earned them hate group classification.

Similar tactics may play out again when Barbary Coast goes before the Planning Commission for a conditional use permit. (Its application was submitted prior to the 45-day dispensary moratorium, and will be considered.)

Ever since the passage of Prop. 64, it’s been an article of faith among San Franciscans that our city would emerge as the unofficial cannabis capital of the U.S., thanks to our trailblazing advocacy and Northern California roots. A delay on recreational cannabis sales could cost us that status, or it could allow us to thoughtfully tinker with policy and set a national example on crafting consensus legislation.  

But cannabis businesses and users excited for the opportunities presented by adult-use marijuana on Jan. 1 will probably have to settle for a delayed high.

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