Cannabis will be a burning topic of discussion over the next six months as the San Luis Obispo City Council begins to draft regulations on marijuana manufacturing and sales.
Key questions include where marijuana business will be allowed — including downtown — along with a host of delivery, cultivation, manufacturing and testing policy considerations.
The City Council is scheduled to begin its discussions on marijuana regulation in March and then adopt new city laws over the summer.
Following adoption of the regulations, a special tax will be placed on the November ballot for voter approval.
Meanwhile, the San Luis Obispo Chamber of Commerce is recommending the city take a “measured approach to cannabis” that includes no more than five retail businesses citywide.
Other recommendations include:
▪ A rigorous application and screening process for licenses.
▪ Strict performance and operating standards for cannabis businesses, including an annual review.
▪ Separate limitations on square footage for manufacturing and indoor cultivation that are distinct from retail use.
▪ Minimal additional taxation above the state-mandated 15 percent and 7.75 percent local sales tax.
The Chamber announced its position in January after months of research on how marijuana regulation has been handled in communities such as Telluride, Colorado; Bend, Oregon; Monterey and Santa Barbara.
Preliminary estimates show that the city could see up to $500,000 in tax revenue if it allows cultivation and distribution in 2018-2019, climbing to $3 million over the next couple of years.
“The city of San Luis Obispo’s cannabis regulations should consider safety and welfare of citizens, the character of our community and compliance with state and federal law while allowing conservative growth and competition within the emerging adult-use cannabis industry,” the Chamber’s adopted position states. “The San Luis Obispo Chamber of Commerce recognizes the difficulty in balancing these complex dynamics and encourages a measured approach by the city to mitigate unforeseen consequences.”
The Chamber recommends a minimal tax so not to discourage business, according to Charlene Rosales, the chamber’s director of governmental affairs.
“We should allow conservative growth and competition within this emerging industry, not tax it out of viability,” Rosales told The Tribune.
It’s still unclear if the city will allow retail stores downtown, if they’re permitted at all. San Luis Obispo Police Chief Deanna Cantrell said at a public marijuana forum in October that traffic congestion and enforcement of laws in the city’s center could be problematic if cannabis stores are allowed there. The Higuera Street core already demands high levels of police attention, she said.
The city’s survey evoked a wide range of responses about the areas of highest regulatory importance.
Comments and concerns included the following topics: crime in and around marijuana businesses, levels of taxation, restrictions (with some arguing against city over-regulation), illegal marijuana use by minors, drugged driving and a potential influx of homelessness.
In its preparation for the new policy and zoning considerations, city staff members completed a white paper taking a close look at how Denver, Seattle and Portland regulate — where legalization has been in place for at least a few years.
The white paper explored a host of issues: crime, odors, the distances cannabis businesses should be from schools and day cares (California law requires at least 600 feet, but local jurisdictions can require more separation) and the various types of business licenses those cities require.
The research showed that in Denver marijuana-related crimes increased slightly between 2012 and 2016. Marijuana-related crime made up 1 percent of crime overall in Denver in 2016. Cannabis-related burglaries, at 78 percent, made up the largest percentage of those criminal incidents.
The white paper encourages local police to weigh in on the marijuana regulations as they’re drafted over the next few months, providing law enforcement perspective about how best to ensure safety in and around cannabis businesses.
“Given the cash nature of the marijuana businesses due to financial institutions’ unwillingness to engage in transactions with these businesses, the (San Luis Obispo) Police Department may want to weigh in on security requirements in the zoning regulations,” the city’s white paper states.
Odor-control, location restrictions for personal cultivations and plant height regulations are other considerations for the city.