2 medical marijuana dispensaries to open in Morro Bay after city approves ordinance

Morro Bay officials will begin taking applications from prospective operators of up to two medical marijuana dispensaries in July, after the City Council on Tuesday formally adopted local rules to regulate cannabis businesses, personal cultivating and public smoking.

The unanimous vote comes about 10 years after a law enforcement raid initiated by San Luis Obispo County’s former sheriff shut down the city’s — and county’s — only medical marijuana dispensary for alleged violations of state and federal marijuana laws.

The city now joins Grover Beach as the only cities in the county to pass rules allowing for up to two medical marijuana dispensaries. Though the San Luis Obispo County Board of Supervisors’ discussion on marijuana remains ongoing, the majority has indicated that it will ban all dispensaries in unincorporated communities.

Like all California cities, Morro Bay had until January to pass its own laws before the state starts issuing business licenses to marijuana providers, as decided by voters with 2016’s Proposition 64, the Control, Regulate and Tax Adult Use of Marijuana Act.

After Tuesday’s passage of the ordinance, which goes into effect in 30 days, the city will begin accepting applications from possible medical marijuana dispensary operators this summer, with two preferred candidates being selected in 2019.

Recreational dispensaries are not allowed in the city under the ordinance, though officials say a proposed cannabis tax could lead to changes for commercial recreational marijuana in the future.

“We’re taking a wait-and-see approach,” Councilwoman Marlys McPherson said.

Applicants seeking to open a medical marijuana dispensary will be vetted by Community Development Director Scot Graham, who will rank those that meet minimum requirements on a Merit List; will be reviewed by a cannabis permitting committee made up of city officials; and will face a final decision by City Manager Scott Collins.

The business permits will be good for an initial term of up to two years, followed by two-year terms thereafter based on a renewal review process.

Medical marijuana delivery services are required to hold a city-issued business license and proof of association with a legitimate medical marijuana dispensary. Those services will be subject to inspection by city officials.

Under the ordinance, smoking marijuana is illegal in any public place.

Under the voter-passed state law, residents may possess and grow up to six marijuana plants. With Morro Bay’s ordinance, two of those plants may be grown outdoors, at least 10 feet away from the property line. There’s no height limit for outdoor plants, so long that they are out of sight from public spaces.

Growing must also be done with a property owner’s consent and in a secured place that’s inaccessible to minors. Odor control may be required if a property’s pot attracts complaints.

Administration and enforcement of the new law are supposed to be self-funded through yet-to-be-determined city permitting fees and with development agreements with the dispensary applicants. City officials say they want to keep those permitting fees low to encourage people to sign up.

The city is also looking to put a cannabis tax measure before voters in the November 2018 election, unless the council opts for a special election beforehand. A report on the possible measure is due back to the City Council this summer.

It remains unclear what penalties might be assessed for violations of the ordinance. The current ordinance allows for the city to charge violators with infractions and even misdemeanors, which are punishable by up to six months in jail and a $1,000 fine.

The Morro Bay vote follows a lengthy process that included months of public input and recommendations from a city cannabis committee consisting of city administration, police and fire officials and council members McPherson and Robert “Red” Davis.

After narrowing its preferences, the City Council unanimously approved final language for the ordinance at its Oct. 24 meeting.

The adoption of the new rules comes 10 years after former San Luis Obispo County Sheriff Patrick Hedges initiated a multi-agency raid on Morro Bay operator Charles Lynch’s Compassionate Caregivers medical marijuana dispensary in 2007.

Lynch’s business was the first and only dispensary to open in San Luis Obispo County history. Lynch, who had the support of city officials, was convicted in federal court of illegally selling marijuana and received a year in prison. Lynch remains out of custody on bail awaiting his appeal and has since moved out of the state.

This story was originally published November 14, 2017 at 8:30 PM with the headline "2 medical marijuana dispensaries to open in Morro Bay after city approves ordinance."