San Jose’s Last Stand

The fate of medical marijuana in San Jose hangs in the balance, and it is time to make an informed decision. A certain degree of regulation is necessary to ensure a functioning decriminalized market for any goods, including medical marijuana. While under-regulation breeds social harms like crime, over-regulation also has a detrimental effect on lawful enterprise. With 89 dispensaries operating within its city limits, San Jose needs to be able to effectively regulate the medical cannabis industry. San Jose’s newest ordinance, No. 29420, however, overregulates land use issues to the point of extinguishing the medical cannabis industry, thereby denying safe access to its sick residents and denying the city a potentially significant source of income. Land use for medical marijuana in San Jose can be more effectively regulated by enforcing legislative intent, making more gradual carveouts, and keeping the problems that come with cultivation sites separate from retail medical cannabis dispensary locations. Additionally, despite the ordinance’s emphasis on revising land use provisions, San Jose’s answer to effective medical marijuana regulation may not be contained in land use at all.

San Jose Should Enforce Legislative Intent Over the Letter of the Law.

Per se regulations should not be strictly enforced when they betray the legislative intent. The distance requirements contained in the new ordinance were created as buffer zones to sensitive areas. Thus, individualized distances for are set for distinct sensitive areas (1,000 feet from parks and schools, 500 feet from rehabilitation centers, and so on). While these distances provide a quick rule of thumb for attempting compliance and enforcement, the city of San Jose should exercise greater discretion in enforcing the letter of the law.

Santa Cruz’s “intensity” approach to distance requirements is a great example of a municipality effectively exercising its discretion. Rather than strictly adopting the state’s per se distance rule of 1000 feet from sensitive areas, Santa Cruz only asks its dispensaries whether their intensity of use is compatible with nearby residents if located within fifty feet of a residence. While Santa Cruz permitted only two dispensaries, fourteen others made the requisite showing of compatibility with nearby residents allowing them to be immunized. This was a rather clever way of Santa Cruz to establish regulations that will maintain the public wellbeing, but also made the regulations feasible enough to encourage compliance.

As I mentioned in my original article on San Jose, the city is strictly enforcing the per se 1000 foot distance provision. The purpose of this provision is to act as a buffer zone between something like cannabis and sensitive areas like where children or recovering addicts may be expected to be found. By strictly enforcing the 1000 foot buffer, San Jose will be shutting down dispensaries that are within a nearly impassable 1000 feet, or are within 1000 feet of places where children might be expected to be found, but in reality are not. In both cases, strictly enforcing the distance provision will not achieve what the provision was designed to. By adopting a provision or degree of enforcement that could reasonably assess the potential for harm in each situation, San Jose might find itself enjoying the similar results of dispensary compliance.

Gradual Zoning Carveouts Maximize Public and Municipal Welfare

San Jose can maximize public welfare, safe access, and municipal income by engaging in a more gradual zoning carveout. The new ordinance rezones dispensaries such that they will only be allowed to operate in a warehouse district in the south eastern corner of San Jose. Dispensary owners have expressed concern over this extreme zoning restriction due to the unrealistic volume of business that would be required to operate in retail spaces of 20,000+ feet, especially once rents are driven up by the monopolistic hold these land owners have on dispensaries. Rather than enacting zoning restrictions that fall just short of an explicit moratorium, San Jose can benefit from experimenting with more gradual carveouts.

Clark County in Washington was a great case study of a municipality that experimented with its zoning carveouts for regulating medical cannabis. The Washington and California statutes and initiatives closely mimic each other. Both Initiative 502 and Proposition 215 gave the citizens of each state the right to use cannabis in a decriminalized setting (albeit recreational in Washington and medicinal in California). Sections 69.51A.140 and 69.51A.200 in Washington were analogous to the ruling seen in City of Riverside v. Inland Empires as both give local control for municipalities to choose the extent to which they would follow the newfound freedom in each state’s respective initiatives that decriminalize cannabis. Washington had a very specific subset of commercial and industrial zones in which cannabis dispensaries could be located. Clark County used the default regulations handed to it for two years before making adjustments that best suited the needs of their community.

When Clark County made these changes with a new amendment, the land use aspects they changed pertained to cultivation. Section 6.88.430(E) of San Jose’s new ordinance also changes zoning in regards to cultivation by requiring that cannabis sold at dispensaries be vertically integrated and produced by the owners of the dispensary itself. Juxtaposing the Clark County model with San Jose’s suggests that San Jose’s new ordinance is excessively restrictive. Were San Jose to attempt a more gradual zoning carveout as seen in the Clark County model, it might be able to maintain public welfare by simply adjusting its zoning restrictions in regards to cultivation and allow the city’s dispensaries to continue to operate and provide tax revenue for the city.

Requiring Vertical Integration of Cultivation With Retail Dispensaries Breeds More Transgression Than Compliance

Requiring vertical integration of cultivation with dispensaries mistakenly groups land used for cultivation with land used for retail medical dispensaries. Additionally, restrictions on land used for cultivation are often met with transgression. Vertically integrating cultivation with retail sales will unnecessarily result in retail medical dispensary non-compliance. Santa Cruz also has made modifications to reduce land use as applied to cultivation. Like Clark County, Santa Cruz found after years of its legal experiment that “the creation of rules contains an inherent assumption that people will follow them. Our experience has been to the contrary when it comes to cannabis cultivation.” Requiring cultivation to be vertically integrated places more restrictions on using land for cultivation. By imposing these greater restrictions, San Jose can expect a comparable result to what its neighbor Santa Cruz experienced; transgression rather than compliance.

Rezoning Might Not Be The Answer

There are more effective ways to achieve public welfare through regulation than rezoning medical cannabis dispensaries and cultivation sites. Ordinance No. 29421, amending Title 6 of the San Jose municipal code, sets out a multitude of other regulatory provisions separate from zoning requirements. From the dispensary owners I spoke with, this list of provisions is already proving problematic. Nevertheless, the majority of the provisions can realistically be achieved through diligence. Both the city of San Jose and dispensary owners could greatly benefit by focusing on these more effective, achievable provisions, and scaling back on unachievable land use provisions whose ability to ameliorate the public welfare is limited at best.

Oakland has been on the progressive side by consistently being at the forefront of passing regulations for medical cannabis and has focused more on regulatory provisions unrelated to land use. It had the wherewithal to see the gaps in Proposition 215. In 1998, only two years after Proposition 215 passed, and six years before the state would pass SB 420, Oakland passed an ordinance to establish a committee to regulate medical cannabis locally and added a chapter to the municipal code for medical marijuana. When the number of dispensaries grew large enough to earn Oakland the nickname of “Oaksterdam” in the early 2000s, the city passed a new ordinance that established a permitting system. Soon after that, Oakland would go on to pass Measure Z, largely affecting medical cannabis taxation. The interesting part about tracing Oakland’s regulatory development for medical cannabis is the lack of land use provisions it enacted. Oakland finally enacted a broad zoning and 600 foot distance requirement, but otherwise has enacted regulations for taxes, permitting, and enforcement as avenues for achieving public health and safety.

This provides a potentially valuable lesson for San Jose. While both seem to agree that there needs to be some sort of distance between cannabis and sensitive areas, Oakland is significantly less restrictive in its zoning. While taking Oakland’s approach might not make San Jose the next Amsterdam, it does suggest that there are other avenues by which it could regulate its medical cannabis industry without hurting a great source of income for the city.

Conclusion

I do not doubt the need for structure and regulation in a newly decriminalized market like cannabis. Even with some desperate need to enact new, more restrictive regulations like other municipalities, there are degrees and routes of regulation that maximize the public welfare better than others. Sometimes it is important to focus on the spirit of the law when enforcing its letter will betray its intention. Strict enforcement of distance requirements may not actually be preventing social harm, but actively harms a local industry. Sweeping zoning provisions that monopolize real estate and groups dispensary locations and cultivation sites with known compliance problems creates a proverbial scorched earth policy where the city and its sick residents could otherwise reap the fruits of the medical marijuana industry. What if Napa had rezoned its vineyards to unworkable land? It would not be the world class destination that it is today. Like Napa, San Jose should take measures to safely embrace this new industry rather than shun it by rezoning it to untenable corners of the city.

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