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San Diego City Council Unanimously Approves Recreational Marijuana Regulations

Medical marijuana clone plants are shown at a medical marijuana dispensary in Oakland, Feb. 1, 2011.
Associated Press
Medical marijuana clone plants are shown at a medical marijuana dispensary in Oakland, Feb. 1, 2011.
San Diego City Council Unanimously Approves Recreational Marijuana Regulations
San Diego City Council Unanimously Approves Recreational Marijuana Regulations GUEST:Andrew Bowen, reporter, KPBS News

The San Diego city Council gets it's okay to the cell recreational marijuana. The County citizens review board faces an unusual backlog of death investigations. This is KPBS Midday Edition. I'm Maureen Cavanaugh. It's Wednesday, February 1. Our top story on Midday Edition, when state regulators began issuing licenses next year for the cell recreational marijuana , those sales can take place in the city of San Diego. The city Council voted unanimously yesterday to allow sales of recreational cannabis at dispensaries already approved to sell medical marijuana. And at additional marijuana stores to be approved in the future. There are still supply chain issues to be decided. After a lengthy public hearing on those issues yesterday. Joining me is KPBS Metro reporter Andrew Bowen. Hello good morning. Explain why this was a question to begin with? Could San Diego have prohibited the sale of recreational pot even after prop 64? Yes. Proposition 64 another state laws have made it very clear that cities and counties all local jurisdictions have the authority to ban marijuana sales, marijuana cultivation and any operations to do with marijuana. To be honest it wasn't clear, to me if the city understood that there were statements from council members and also from a statement that I got from a city spokesman giving the impression that if the city does act right now, we are going to relinquish our authority to the state. They are going to decide where these businesses can operate in our city. That's simply not true. The state will not issue licenses to marijuana cultivation operations, marijuana stores, unless the locality, city or county in which those operations exist gives them explicit permission. The city has the authority to ban and it will maintain that authority. Is San Diego the first city to approve the cell recreational marijuana? So far in the County of San Diego yes. When can the 15 city approved dispensaries of medical marijuana start selling marijuana to the public? As soon as they have a license from the state to do so. The proposition 64 dates -- give state regulators until January 1 next year to start issuing licenses. That could happen earlier, but it appears extremely unlikely. Recently state lawmakers say they are not sure the state will be able to meet the deadline of next year. Most of the discussion at the city Council yesterday had to do with the so-called supply chain. That is cultivation testing, distribution of recreational marijuana. Tell us about that. The legal framework for the supply chain operations actually comes mostly from a law that was passed in late 2015 called the medical cannabis regulation and safety act. That came out with 12 different license types. And some subgroups beyond that. Those include cultivation transportation storage, processing manufacturing and testing. There are all these different supply chain operations that are going to be happening, and they all have to be separate. Idea is the state do not want to create big marijuana. One business to has a monopoly on all different aspects of the marijuana trade. All of those licensees by the way will be forbidden from doing business with the nonlicensed operation. If you have a retail shop you have to get your supply chain from a licensed cultivator, brought to by a licensed transporter and tested by a licensed testing facility. The proposal yesterday was to allow retail marijuana sales, but to ban cultivation transportation testing altogether. The councilman said she did not agree with that. It's true that the city voted in great numbers to actually approve the sale of recreational marijuana. 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. During yesterday's public hearing who argued against allowing supply chain activities in the city? There was a gentleman named Scott Chipman. He is the head of an organization that poses marijuana legalization. He has been out all of these meetings. Essentially arguing against marijuana in all shapes and forms. The police department was there saying they did not want the supply chain operation. They said they are afraid it could bring in more crime, and that organized crime could start using these legal operations to funnel marijuana into their illegal market. And those who spoke in favor were many of these businesses that are currently operating in San Diego. Saying we are doing our business and we are doing it under the legal framework that the state has allowed. We should be allowed to continue operating here. These are jobs that will be provided to San Diegans. If we choose to ban the entire supply chain, the retail sales that San Diego has decided it will allow will have to come from counties and cities far away. No city around here really has a supply chain operation that is up and running yet. There were arguments also related to the climate action plan. That the products are going to have to be trucked in from Riverside County. Where the supply chain operations currently exist and are allowed by the cities in which they exist. How did the city Council decide? What did they decide to do about the supply chain issue? They order to be in the supply chain operations for now. They put in a sunset clause. The ban will expire in nine months. Staff are expected to come back with the Council of ideas on how to regulate those businesses with different land-use restrictions. There are a handful of supply and chain operations in the city with what's called a business tax certificate. That's as close as they can get to having permission from the city to operate. They will be grandfathered into the current rules and be allowed to continue to operate. If the city comes up with more restrictive rules on those operations in the future they will still have to abide by those rules. They could ultimately be shut down. Apparently the city could reap a big return in tax revenue by allowing cultivation as well as the sale of marijuana. That's right. City voters passed the measure which was a five percent tax on recreational marijuana sales. All operations involved in the supply chain as well. This tax will apply at multiple levels, and how much the city earns from that tax depends essentially on how much of those operations it chooses to allow. If the city maintains a very strict land-use regulations that would prohibit any of these businesses from actually operating, or if the city chooses to ban them altogether it's likely that the black market will continue. That tax revenue will be lost. That's according to the city's Independent budget analyst. I do want to mention there is state money at stake here. Marijuana cultivation and sales will be taxed by the state. The state will only give out grants using that tax revenue to cities and jurisdictions that allow the supply chain operations and the sales. The idea being, if you are expected to deal with the impacts of legalization you have to allow that legalization. You are not going to get money for something that you are not even allowing in your boundaries. Speaking of not allowing in boundaries, the San Diego County Board of Supervisors met recently and is considering restrictions on recreational marijuana sales. In the unincorporated areas of the County. Is that right? That's right. In March they will be voting. I been speaking with Andrew Bowen, thank you.

The City Council Tuesday unanimously approved regulations for recreational marijuana operations in San Diego in light of voter passage last November of state Proposition 64.

The city has a couple handfuls of medical marijuana dispensaries, which are expected to convert to selling the drug for recreational use.

The state measure, backed by San Diego voters by a wide margin, immediately legalized possession, transport, use and transfer of marijuana for people 21 years old or older. It also immediately allowed personal indoor and outdoor cultivation of up to six living marijuana plants at a private residence.

The new state law also provides municipalities with the authority to regulate marijuana-related activities and to subject such enterprises to zoning and permitting requirements, city officials said.

Land use regulations will be similar to the rules imposed on medical marijuana dispensaries, with some modifications and additions.

Recreational marijuana outlets would be permitted in the same zones, require a conditional use permit and be required to maintain similar security requirements and separation distances from places like residences and schools.

There would also be no more than four such businesses allowed per City Council district.

The main point of contention among the council members and public was over the supply chain, as city staff recommended a prohibition on cultivation, processing, testing, storage and distribution of marijuana and marijuana by-products.

RELATED: San Diego City Council Considers Ban On Marijuana ‘Supply Chain’

"This ban would require us to purchase all wholesale product from outside the San Diego County region," said Phil Rath, who represents some of the legal dispensaries operating in the area. "Effectively it will be shipped long distance."

Between extra costs and taxes, the price differences between legal and illegal dispensaries would be "quite large" and lead to further proliferation of pot shops operating outside the law, Rath said.

The council's action called for staff to continue reviewing the supply chain issues and return within nine months. The permitted dispensaries can continue with cultivation and distribution until those issues are resolved.

The council also banned outdoor personal cultivation unless the plants are in secured exterior structures, such as greenhouses.

Council members last week extended a moratorium on new recreational marijuana businesses from 45 days to a full year. The temporary ban was designed to give city officials time to develop applicable laws and will be rescinded once the regulations take effect.

Various parts of the local law will take effect at different times because of needed reviews by outside agencies. Commercial licenses won't be issued by the state until next year.