SJ Mercury News: San Jose marijuana ordinance puts the squeeze on dispensaries

San Jose marijuana ordinance puts the squeeze on dispensaries

6/26/2014

San Jose dove deeper into a running national debate on how to effectively regulate the marijuana industry when it passed an ordinance restricting marijuana dispensary locations, implementing additional security measures, and mandating that marijuana be grown locally.

Most city councilmembers believe the ordinance will cut down on marijuana-related crime and marijuana sales to underage people. Opponents, though, do not believe the ordinance provides a workable solution.

"This is a de facto ban," said Sean Donahoe, deputy director of the California Cannabis Industry Association. "We are looking for a workable ordinance to end the gray area. A workable ordinance is not a de facto ban."

Supporters hope new regulations will improve community and business environments, such as schools and industrial parks.

"These regulations will tighten up rules in regards to marijuana. We understand that people need medicated marijuana, but we would like to discourage recreational usage, eliminating collectives in commercial neighborhoods," Vice Mayor Madison Nguyen said. "This is going to provide a safe environment for our school children."

According to a city survey of San Jose residents, many worried that pot shops located near their homes and schools are not safe. The new ordinance sets zoning regulations that will cut down eligible marijuana dispensary locations to less than 1 percent of San Jose's area.

Pot shops will also have to abide by stricter security regulations: Distribution locations must be fully equipped with security cameras and recording systems at all times; medical marijuana must be locked and stored away in vaults or safes; and the premises must be secured to prevent unauthorized entry.

The ordinance also mandates that dispensaries cannot operate between 9 p.m. and 9 a.m., and those younger than 21 are barred from entering pot shops or buying marijuana products.

In a separate city survey, corporations and technology companies in San Jose voiced concern that marijuana collectives near their businesses drive away potential employees and customers.

"There have been negative impacts on businesses near blocks and surrounding blocks where dispensaries are located," said Jim Reed, Vice President of Public Policy for the San Jose Silicon Valley Chamber of Commerce. "We think the voters and businesses want restrictions to find a middle-ground solution on regulating marijuana, and we think the ordinance struck the right balance."

But Donahoe said problems with dealing pot to minors and unsafe conditions apply to only a few problematic locations, and the ordinance will unfairly force the majority of marijuana businesses to close.

Critics also oppose a new requirement that marijuana sold in San Jose must be grown either in or next to Santa Clara County. Donahoe said many pot shops sell marijuana products produced elsewhere because they do not have the resources for marijuana manufacturing.

"We want a regulated industry that can provide patients with access to safe and well-regulated products, as well as a variety of them," Donahoe stated.

Dave Hodges, head of the All American Cannabis Club, is leading his organization in challenging the ordinance. Members have been walking through downtown and distributing free shirts as they collect funds and signatures to form a petition.

"Right now we're just reaching out to locals or anybody who needs a part-time job. We're trying to hire 300 people over the next 30 days to help us in this cause," Hodges said June 20, when club members attended the San Jose Bike Party to recruit new members.

Donahoe and his allies say they will continue to fight to keep their businesses alive.

"Whether a ban or a de facto ban, neither of these are a good public policy solution," Donahoe said. "We have to find a better way, and we will."