You Gotta Pay To Play

“You gotta pay to play”, said an entrepreneurially minded man in t-shirt and jeans after reviewing applications for new members to his medical cannabis collective. John Doe is an owner of a medical cannabis dispensary called San Jose Medicinal. Located in downtown San Jose, San Jose Medicinal is one of 89 dispensaries in the city of San Jose that faces closure as a result of Ordinance No. 29420 adopted on June 17th, 2014. The ordinance, which takes effect in July 2015, revises regulations for medical cannabis dispensaries in San Jose to the point that an overwhelming majority will be forced to shut their doors permanently. Before diving into the intricacies of the new ordinance, it’s important to first understand the local framework this ordinance fits into.

Proposition 215 gave Californians the right to access and use medical cannabis by adding section 11362.5 to the California Health and Safety code, also known as the Compassionate Use Act of 1996, on November 6th, 1996. The Compassionate Use Act was the beginning for Californians’ rights to use cannabis for the treatment of certain ailments including “cancer, anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis, migraine, or any other illness for which marijuana provides relief.” With this act, patients who are recommended cannabis and doctors who make those recommendations are free from criminal penalties by state authorities. In this sense, this provision served as a medically exempted provision from the criminalization of cannabis set out in the health and safety code’s section 11357. The Compassionate Use Act of 1996 opened the door for access to medical cannabis, but it would be another eight years until further medical marijuana regulation was enacted.

Before 2012, municipalities had already been setting local regulations pursuant to typical zoning practices. As described in Big Creek Lumber Co. v. County of Santa Cruz, “Land use regulation in California historically has been a function of local government under the grant of police power contained in article XI, section 7.” In 2012, however, zoning medical cannabis dispensaries became much more explicit and specific with the addition of California Health and Safety Code Section 11362.83. This provision establishes that, “Nothing in this article shall prevent a city or other local governing body from adopting and enforcing any of the following: (a) Adopting local ordinances that regulate the location, operation, or establishment of a medical marijuana cooperative or collective.” While most municipalities have to some extent tailored medical cannabis zoning laws to fit their local needs and values, the case of The City of Riverside v. Inland Empire Patients Health and Wellness Center, Inc. is a prominent precedent in California that illustrates this provision of the California Health and Safety Code effectively.

In May of 2013 the city of Riverside set a precedent for the use of California Health and Safety Code section 11362.83 as it chose (via its local ordinances) to set a moratorium on cannabis dispensaries. Violation of this ordinance was deemed to constitute a public nuisance (See Inland Empires). Claiming that existing medical cannabis dispensaries were in violation of the local ordinance and therefore a public nuisance, the city of Riverside then filed for injunctive relief against the dispensaries (Id). In place of John Doe defendants, the city of Riverside then named Inland Empire Patients Health and Wellness Center as their defendant (Id). The trial court found in favor of the city.  Inland Empire Patients Health and Wellness Center appealed the ruling until it was decided in the California Supreme Court (Id). In the California Supreme Court, the city of Riverside argued that the dispensary was operating in a business and manufacture park zone, and that operating a medical cannabis dispensary was not a permitted use of land in this zone (Id). While this was cited as the specific zoning violation, the city had actually not zoned any areas in which medical cannabis dispensaries could operate (Id). The California Supreme Court affirmed the rulings of the trial and appellate courts (Id). While Riverside could not ban dispensaries by citing federal pre-emption, the Court felt that this local zoning ordinance did not directly conflict the rights granted under proposition 215 (Id). This case is our first precedent of a way in which local control, here under 11362.83, can be applied.

11362.83 gives the city of San Jose local control. The ordinance provides for regulations at all levels of the medical cannabis industry and sets out land use regulations that have had significant impacts on medical cannabis dispensaries. Perhaps the most striking is the restriction the city has placed on medical cannabis dispensaries in certain areas. Not only does this raise the question of where the city will technically allow them, it is also curious that medical cannabis dispensaries are zoned differently than the other medical facilities like medical or dental offices despite being recognized as occupying the same field. Along these same lines, the ordinance adds blanket bans on medical cannabis dispensaries in certain areas. For example, dispensaries will be banned in the “International Business Park” boundary. This area is defined as “the corporate limits of the City of San Jose bounded by Interstate Highway 880, Montague Expressway, Trade Zone Boulevard, the Union Pacific Railroad line, Murphy Avenue, and Brokaw Road.” For those less familiar with San Jose, this spans the majority of the downtown area. The ordinance also prohibits the use of land for medical cannabis dispensaries in the Edenvale Area Development, which they cite as spanning 2,312 acres. These are just a few examples of provisions found in the new ordinance. Nevertheless, some are more problematic than others.

I had the opportunity to interview owners and volunteers at several different medical dispensaries, and was able to hear specifically which of these land use provisions were proving problematic to their ability to remain in business now, and after July of this year (I will not mention the specific individuals by name so as protect their identities). The first dispensary I spoke with was San Jose Medicinal, located on First Street in downtown San Jose. The first person I spoke to works as a budtender at the dispensary. Upon asking about the ordinance, he insisted he was a volunteer and could not recall anything about the dispensary’s current legal status, or how the ordinance has and will be affecting them. He referred me to John Doe, who cited the 1,000 foot ordinance as the reason why the San Jose Police Department is attempting to shut them down. San Jose Medicinal is alleged to be 997 feet from St. James Park. It is therefore deemed to be in violation of the ordinance, despite fulfilling other difficult criteria such as being located on the second floor in a downtown commercial zone.

San Jose Medical Group is currently appealing the city’s ordinance, and the designation of St. James Park as a “park” as it was intended to be defined. They are arguing that the legislature intended to define “park” as a place where children play. Since there are no playgrounds in St. James Park, and the homeless frequent the park and bathe in its fountain to the point where e. coli has been found there, it is safe to say that children are not playing there. As such, the city should not consider it a “park” from which the 1000 foot requirement should be drawn. When I inquired as to why Mr. Doe felt the city implemented these provisions, he could only respond, “you gotta pay to play”.

The next collective I spoke with was Lux Meds/Red Clover/San Jose Patients Group located on south Autumn street in San Jose. Immediately you may have noticed the hyphenated name. According to Jane Doe, these three medical cannabis dispensaries have been forced to partner together to survive in light of land use issues incurred by the new ordinance. San Jose Patients Group, for example, used to be located on the 800 block of the Alameda (aka highway 82) in San Jose near the new Whole Foods. Some residents in the area had been making complaints that amounted to nuisance, which in turn caused the San Jose Police to measure their distance from the Dispensary. Measuring directly, over a river that lies in between the houses and the dispensary, the San Jose Police found San Jose Patients Group to be operating within 1000 feet of these residences.

Before launching into ordinances other municipalities passed to compare with San Jose’s, this example already presents a striking issue with the new ordinance. The 1000 feet separation requirement is set in place as a buffer zone between the dispensaries and the community so as to separate the community in the event some undesirable circumstance, usually crime, arises. While 1000 feet is a good per se rule for a buffer zone, this should also mean that a dispensary could operate within the 1000 foot area if attended by some other buffer that would separate the dispensary from the community at large. Like a moat to a castle, a river in between a dispensary and residences would keep the potential social ills separate from the community that would otherwise suffer from them. This notion is supported by Santa Cruz County’s policy (stay tuned for details in my article discussing Santa Cruz!), which allows for a medical cannabis dispensary to be located within the buffer zone upon proving that they will not be the cause of harm.

While the thousand foot requirement is perhaps enforced beyond the extent of its original intent, the culprit could also arguably be the way in which this distance is measured. The language of the ordinance requires the measuring to be done “in a straight line from the Parcel boundary of the sensitive use to the nearest exterior wall of the Collective’s Building envelope”. Contained in this single sentence are a couple of ways in which the language of the ordinance can undermine the underlying intention of keeping a buffer zone between medical cannabis and people like children and those with substance abuse issues. The first is that the distance is measured in a straight line. As mentioned above, something like a river is a great example of a physical barrier that works to achieve the intended separation between medical cannabis dispensaries and places of “sensitive use” (like schools and playgrounds). When something like a river creates an interruption in medical cannabis’s ability to reach sensitive use areas, so too should the distance be measured. If an unintended ill like crime were to attempt to reach a sensitive area, it would have to go around the river first. If the state feels that 1000 feet is the distance after which unintended social harms dissipate, it should therefore follow the path of their theoretical criminal, and also have to go around the river first. To take it a step further; in theory this river, or mountain, or other sort of barrier could be insurmountable, impassable, and the dispensary would still not be allowed to operate if located within 1000 feet as the bird flies. Yet, it is not the birds we worry about.

Also problematic in this language is how the distance is measured to the parcel boundary. Theoretically, this could mean that a school, or rehabilitation center, could have property that spans a lengthy estate of several miles, and a medical cannabis dispensary would not be able to operate within a thousand feet of its edge, despite being miles away from the people the ordinance is trying to protect.

Jane Doe raises another serious issue caused by the restrictive rezoning found in the new ordinance. As of July of this year, zoning changes will only allow for medical cannabis dispensaries to be zoned in one area of San Jose.  Located in a warehouse district near Monterey road and Curtner Road, the ordinance sweeps the medical cannabis industry to south central San Jose. In this district, Jane Doe estimates the average square footage of each building is around 20,000 feet. According to Doe, the partnered three collectives are already having trouble getting enough business to support being in operation in a 5,000 square foot building. She fears that being forced into significantly larger spaces will be an automatic death sentence for smaller medical dispensaries, and will require a practically insurmountable restructuring and partnering of more successful medical cannabis dispensaries. Her fear is not without foundation. Rather than grandfathering current dispensaries’ rights to operate, San Jose shut all 89 dispensaries down, with the option to reapply for licenses. As of the time of writing this article, only six dispensaries have found the new legal environment in San Jose viable enough to apply for a new license.

Not only does rezoning the industry in such a way that shuts down 89 of a city’s businesses have fiscal ramifications for the municipality but it also creates the risk of diversion to illegal markets.

As we move forward in comparing what is currently happening in San Jose to the ordinances passed in other municipalities, it is crucial to remember that the people have the right to voice their approval or lack thereof, and can bring about real change in their communities. By looking at other municipalities, we can make an informed evaluation about this ever changing legal environment. Be informed and decide for yourself, because what you decide can have a very real impact on the community you live in, and set precedents for the generations to come. Join me for my next article, as we look to a county in Washington who also faced the decision of how to zone a decriminalized marijuana industry to fit the needs of their community.


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