City Gears Up for Pot Legalization

Potential at ballot box sparks commission



If California voters decide next fall to follow Colorado, Washington, Oregon and Alaska by legalizing adult use cannabis, San Francisco plans on being ready.


This summer the Board of Supervisors unanimously approved legislation to form a Cannabis State Legalization Task Force, which will be tasked with planning local policies if adult use cannabis becomes legal. District 8 Supervisor Scott Wiener, one of the co-sponsors of the bill, said the taskforce will allow the city to prepare for legalization by making policy recommendations to the Board of Supervisors to ensure an effective local implementation.


“If cannabis is legalized in 2016, we want to be prepared to hit the ground running in terms of implementing that legalization locally in a very rational, thoughtful and calm way,” Wiener said. “If we don’t, then inertia will set in and it becomes a chaotic fire drill.”


The 22-member task force will spend the year grappling with the complex issues the city will be confronted with following a statewide legalization and will formulate a strategy to promptly act if a ballot measure passes. Its diverse membership will feature representatives from the cannabis industry, business community, hospitality and nightlife industry, neighborhood groups, organized labor and public health and drug policy experts.


The backdrop for the task force’s creation begins with Terrance Alan, an innovator in nightlife reform who led a political movement in the 90s to create the San Francisco Entertainment Commission. Alan became an inadvertent cannabis activist in 1992 after more than 150 SWAT, DEA, CHP and SFPD officers raided his home and threw him and his partner Randall to the ground with guns in their faces. He was arrested for growing marijuana for himself and Randall, who was dying of AIDS.


His arrest caught the attention of longtime marijuana activist Prop 215 author Dennis Peron, who used Randall’s clear medical use to pressure authorities to reduce charges. The medical cannabis movement got a poster child out of the case, and the longer vision of Dennis Peron began to unfold, leading to the passage of Prop 215 in 1996.


Driven by his intense personal experience, Alan has remained involved in the medical cannabis movement ever since. “I can’t ignore that first experience, which ate up a year and half of my life, where I didn’t know if I was going to jail or what was going to happen at a time when I was pretty beaten,” Alan said.


In 2014, Alan co-founded the California Cannabis Voice, a political action committee to support fair medical marijuana use legislation. If California legalizes adult use cannabis in 2016— early polling indicates that 55 percent of CA voters strongly support it—then Alan believes the City must reexamine its medical cannabis regulatory system.


Under the current licensing system, medical cannabis dispensary (MCD) locations are limited to “green zones” that require them to be at least 1,000 feet from a school and operated in a location zoned for retail use. It has allowed for 29 licensed MCDs in San Francisco thus far. There is no restriction on the number of permits the city can grant, so given the number of green zones, there could theoretically be up to 100. But it doesn’t work that way. Once you find a green zone, it is usually comprised of very few pieces of suitable property, maybe a block and a half at most. What if all those buildings are rented or the landlord doesn’t want to rent to a MCD, or if the rent is too high?


Once you start drilling down into each green zone, this seemingly large map of possible MCD locations shrinks drastically.


When asked how legalization could impact the Castro business dynamic, Alan said it all depends on whether or not the city wants to participate in a cannabis dispensary expansion. “If we are able to regulate it and nurture it so that it grows in a way that we are all comfortable with and minimize negativity, if that happens—and that’s the goal of the task force—then I think it will be a huge employer and monumental cash cow for the entire city,” Alan said.


This system of parsing out the city into green zones created a clustering problem, leading to an over-concentration of MCD’s in some neighborhoods.


“None of the MCD’s that has been proposed over the last 18 months has been approved,” Alan said. “When you’ve got legalized adult-use cannabis and a system that won’t even allow for another dispensary, and we have an economy that is based on tourism and a huge population of cannabis users already living here, how in the world are we going to serve a million tourists and a couple hundred thousand local residents out of 29 tiny dispensaries dotted around the city? They are going to expect to come to a city that is prepared for cannabis tourism, and I think it’s right to create a rational regulatory marketplace for them to fulfill their expectations.”


When Colorado became the first state to legalize adult use cannabis last year, they did not anticipate that it would produce a new stream of tourism, nor did they anticipate how many of their existing tourists would want to participate in the cannabis market as well. Their problem was the state legislature did not create a way for tourists to use cannabis products. Visitors can buy cannabis, but there is no legal place to smoke it except for in a private home. As a result edibles dominated the recreational marketplace, but nobody thought to regulate edibles, whose potency can be highly variable due to THC levels that often differ from what is promised on the label.


Last March Colorado released its first annual report on the status of its marijuana market one year after legalization. It revealed a significant divergence in the way recreational users consume cannabis compared to medical users. Of all the cannabis sold in the first year of legal sales, 75 percent of it was purchased by medical users compared to 25 percent for recreational users. Cannabis-infused edible products tell a different story: recreational users bought 60 percent of them compared to 40 percent for medical users.


Because of his experience as an innovator in nightlife reform, Alan believes he has a unique skill set that he can bring to the cannabis challenge. Even though the product is very different, he sees a lot of similarities between the pre-Entertainment Commission regulatory environment and the current medical cannabis regulatory environment. “The challenges are similar, and the lack of infrastructure is similar, and the public perception is similar,” Alan said.


Most mature industries have trade associations that represent them in City Hall, communicating their needs. Everything from hotels to restaurants to nightclubs - which did not until Alan helped create the Entertainment Commission – have trade associations. This has yet to happen in the world of medical cannabis, and a task force could help form some industry wide organization to get people together to approach issues as a unified group.


Drawing on experience from state legalization in Colorado, Alan went to the Board of Supervisors one by one presenting his concerns. He suggested the idea of a blue ribbon task force to help prepare the city for legalized adult use cannabis. He received support from Wiener, as well as from fellow Supervisors Eric Mar and Jane Kim, and they put together legislation to form the task force. He has spent the past few months drumming up interest in the task force and pledged to the board to do everything in his ability to give them qualified appointees from which to choose. Selection hearings should begin by the end of the month.


“The future is bright if we do it right,” he added, chuckling at his accidental rhyme. “Maybe that should be our slogan.”

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