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SLO council starts commercial marijuana regulation discussion

A marijuana plant awaits judging in the Oregon Cannabis Growers’ Fair marijuana plant competition in Salem, Ore., in 2016. Local jurisdictions, including San Luis Obispo, are assessing how to regulate commercial uses of marijuana.
A marijuana plant awaits judging in the Oregon Cannabis Growers’ Fair marijuana plant competition in Salem, Ore., in 2016. Local jurisdictions, including San Luis Obispo, are assessing how to regulate commercial uses of marijuana. The Associated Press

The San Luis Obispo City Council began a discussion Tuesday that will continue over several months, about whether to allow storefront sales of marijuana, add a local marijuana sales tax and permit outdoor cultivation, among other commercial marijuana regulations.

But for now, the council opted to maintain the city’s current ordinance prohibiting the commercial and industrial use of marijuana until it gathers public comments on possible new regulations.

With the passage of Proposition 64 in November, which legalized adult recreational marijuana use, the state is in the process of setting up its licensing structure for both medical and recreational marijuana businesses and expects to issue its first licenses in early 2018. Cities statewide may also regulate marijuana businesses through zoning, licensing, local sales tax and other municipal code provisions relating to commercial and medical marijuana activities.

Though state law currently allows those over 21 to have up to an ounce of marijuana or 8 grams of concentrated cannabis oil, buying it is still illegal.

A product that hasn’t been taxed so far will be taxed a lot. If we overtax, it will go back to the black market.

Andy Pease, city councilwoman

On Tuesday, several public speakers said they would support a new city ordinance that serves farmers and users.

Among those supporters was Quinn Brady, who said her family farms organic medical marijuana. She said recreational legalization will bring greater transparency to cannabis use, erasing stigmas about how it’s farmed (her grows don’t rely on pesticides) and perceived negative consequences of using marijuana. Medical marijuana has helped her father, Brady said.

“We’ve crossed bridges with our neighbors and we have dealt with this stigma in the past, learning to understand them, and they have learned to understand who we are,” Brady said. “We have incredibly positive relationships with our neighbors, and many of them now work with our farm.”

But local attorney John Belsher, who produced the documentary “The Other Side of Cannabis” with his wife, Jody, said the council needs to keep marijuana away from children because of its negative effects on the brain. He said he opposes outdoor cultivation to keep teens and underage users from getting access to marijuana illegally.

“I don’t think anyone would suggest it’s healthy for teens to use this drug,” Belsher said.

Council members discussed several topics, including taxation and impacts to city resources such as water.

“We need to have fees that reflect what it takes us to regulate,” Councilwoman Andy Pease said. “... A product that hasn’t been taxed so far will be taxed a lot. If we overtax, it will go back to the black market.”

Assistant City Manager Derek Johnson said studies show that if taxes on marijuana sales reach the high 30-percent range, consumers will pursue a cheaper, illegal product. Under Proposition 64, marijuana will have a per-ounce cultivation tax on growers, a 15 percent state sales tax on buyers and a possible city tax from local municipalities.

I don’t think anyone would suggest it’s healthy for teens to use drug.

John Belsher, local attorney

Pease supported the idea of marijuana retail stores but questioned whether they should be permitted in downtown San Luis Obispo.

Councilwoman Carlyn Christianson recommended establishing a maximum number of “brick and mortar” retail businesses and expressed her concern that outdoor cultivation could be a drain on water and real estate.

“We’re sitting in the middle of a very big county with a lot of land,” Christianson said. “I would like to see commercial ag take place outside our city limits. Our land is needed for city activities, which means things like housing for our workers and not necessarily crops.”

Councilman Aaron Gomez expressed concern that the city, under current policy, can’t prevent transportation of marijuana on its public roads, but it can ban deliveries to individuals and properties within the city. Gomez said the law is inconsistent and needs modification.

“I don’t think we need to wait a year and a half to address this,” Gomez said. “This is something we should take a look at sooner.”

The city isn’t expect to draft a new ordinance relating to business uses of marijuana until next summer.

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