San Diego is the first local city to approve recreational marijuana sales since state voters approved Proposition 64 in November, and no other cities in the county have indicated they intend to follow suit.
Sales of recreational pot will begin when statewide regulations being crafted in Sacramento are completed sometime before next January. Dispensaries along the coast may have to wait for Coastal Commission approval, but city officials said that’s expected by October.
The San Diego City Council unanimously agreed on Tuesday to allow the sale of recreational marijuana at 15 dispensaries approved by the city to sell medical marijuana, pending the state action, and any additional dispensaries the city approves in the future. Council members also agreed to consider later this year approving regulations for commercial cultivation, testing and distribution of marijuana and byproducts of the drug, such as edibles.
Specific regulations for those activities weren’t available for the council to approve on Tuesday because city staff and the San Diego Police Department had recommended the city ban them based on concerns about crime and other potential problems.
Council members said they were partly motivated by the November election, when 62 percent of city voters approved Proposition 64.
“They told us what they expect us to do,” said Councilman Chris Ward, noting that Proposition 64 also allows local governments to legalize cultivation, manufacturing and testing.
Councilwoman Barbara Bry said the council’s move could boost city tax revenues and the local economy while also making sure marijuana products are safe.
“I believe it is our responsibility to implement the will of the voters,” she said. “It’s also our duty to wisely and responsibly regulate every part of the supply chain in order to ensure that our consumers have a safe and vetted product.”
The council also included a “sunset clause” in the legislation it approved, forcing the city to either ban or approve cultivation and manufacturing within nine months.
In addition, the council agreed to allow existing cultivation and testing facilities already operating within the city to stay open until the council decides how to regulate such businesses.
City revenues from marijuana would be significantly higher if San Diego agrees to allow cultivation and manufacturing, the office of the city’s independent budget analyst told the council.
No estimate of overall revenue was given, but the head of the Ocean Beach Planning Board said San Diego could receive as much as $30 million per year.
San Diego voters approved a local tax on recreational marijuana on Nov. 8 that would start at 5 percent and rise to 8 percent in July 2019. That tax would apply to pot farms and factories as well as dispensaries.
The council’s vote came after a three-hour public hearing where supporters and opponents of legalization focused mostly on cultivation and manufacturing, not sales at dispensaries.
Supporters of allowing cultivation and manufacturing said banning those activities would cost San Diego jobs by shifting such activities to Orange County and other areas, and increase air pollution by forcing tons of marijuana to be trucked into the city from elsewhere.
They also said there is essentially no other industry allowed to sell its product, but not allowed to grow, manufacture or test it locally.
Opponents said factories manufacturing edibles, hash oil and other marijuana products are prone to explosions, and that pot farms have been linked to organized crime.
Police Lt. Matt Novak, commanding officer of the Police Department’s narcotics unit, said pot farms and factories are magnets for crime and would put additional stress on police resources.
He also said farms and manufacturing facilities in Colorado had experienced fires and explosions, noting that they typically use pesticides and other dangerous chemicals.
“Our take is this is going to very much negatively affect public health and public safety,” Novak told the council.
He also said organized crime syndicates have used the opportunity to grow marijuana legally in states like Colorado to boost supplies of the drug that they then divert to states where it’s illegal because they can charge more there.
It’s not clear how loose or strict the council would be willing to be on regulations for cultivation and manufacturing, but Councilman Mark Kersey expressed a desire to see “narrowly crafted” rules proposed.
Phil Rath, leader of a coalition of the city’s permitted medical marijuana dispensaries, said the group is open to “reasonable” regulations for pot farms and factories.
But he said allowing such activities would be crucial to helping close illegal dispensaries, who don’t pay taxes, don’t adhere to strict city security rules and can get the marijuana they sell more cheaply because they can buy it from anywhere.
“If this trend of adding costs to legal operators while illegal sellers avoid them continues, price differences are going to further force consumers to increase their illegal purchasing habits,” Rath said. “People vote with their pocketbook and that’s what we’re afraid of.”
The city’s 15 legal dispensaries, eight of which have opened, all conform with regulations that prevent such businesses from opening near housing, schools, churches, parks and other sensitive uses, while also requiring security guards, cameras and other safety measures.
The legislation adopted on Tuesday would also refine some existing regulations to avoid some unintended consequences of the city’s medical marijuana ordinance, which was approved in 2014.
An example is making the definition of a park more specific to prevent open space and riparian areas from blocking some proposed dispensaries, which will allow a few more to open.
The legislation would also tighten sign rules to allow only alphabetic characters spelling the name of the business. This change is in response to dispensaries seeking to add graphics of marijuana plants or related images.
Dispensaries would also face a new requirement to remove graffiti within 24 hours and keep the area surrounding their businesses free of litter.
Customers would need to be 21 years old — a requirement under Proposition 64 — to buy recreational marijuana, while medical marijuana would still be available to those 18 and up.
San Diego on Tuesday headed in the opposite direction of the county Board of Supervisors, which voted last week to move ahead with a plan to ban pot farms and dispensaries in unincorporated areas and to force existing facilities to shut their doors in the next few years.
The city of La Mesa is the only local government other than the city of San Diego to indicate it may allow cultivation and manufacturing.
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