Island of Ganja?

Alameda is examining whether to tax cannabis deliveries and perhaps allow the sale and cultivation of marijuana in the city.


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Minwoo Park

While canvassing for political candidates in Alameda this fall, Councilmember Jim Oddie sometimes detected an unmistakable scent wafting through the air. “If you’ve ever knocked on doors on a Friday night, you might notice a lot of people using marijuana, many of them, I assume, are medical marijuana patients in Alameda,” said Oddie. “Alameda seems to be a progressive city.”

Alameda might also soon become the latest California city to allow cannabis sales and to regulate and tax pot—both medical marijuana and pot for adult recreational use. On Nov. 1, in anticipation of California voters approving Proposition 64, the city council unanimously greenlighted Oddie’s proposal to examine potential pot regulations. The new rules could range from establishing a tax on delivery services of marijuana in Alameda to allowing virtually all phases of the burgeoning cannabis industry, including the cultivation, manufacture, testing, distribution, and dispensing of cannabis.

It would be quite a turnaround for the island. In 2010, the city banned medical cannabis dispensaries outright—as nearby Oakland and Berkeley were embracing them. But following the passage of East Bay Assemblymember Rob Bonta’s Medical Marijuana Regulation and Safety Act, or MMRSA, in 2015, the California League of Cities began urging cities like Alameda to take legislative steps to regulate and license dispensaries or continue to prohibit them. In February, the Alameda City Council voted to prevent commercial cultivation or sale of cannabis within city limits, but included a provision to reopen the issue at a later date, said Oddie. The city’s current ordinance is also not clear on the regulation of so-called “store-to-door” home deliveries of weed to Alameda medical cannabis patients.

Oddie believes rapid changes in the cannabis industry, including the passage of Prop. 64, coupled with tumult in Oakland over permitting issues, is providing a window of opportunity for Alameda to tap into the rich vein of cannabis-related fees and taxes. If Alameda doesn’t act soon, he said, cities like nearby San Leandro—which approved three dispensaries in the past year—will fill the void. “I want to make sure Alameda doesn’t lose out on a possible source of revenue,” said Oddie. “With San Leandro being aggressive with their dispensaries and Oakland in such flux, Alameda is in a position to benefit.”

Oakland’s problems center on a proposal to set aside a substantial number of weed licenses to people who live in certain areas of East Oakland or have been previously convicted of marijuana-related crimes. Councilmember Desley Brooks said she’s trying to bring equity to the local cannabis industry, but Bonta has said that her proposal is likely illegal under MMRSA. As a result, there is a growing belief among Oakland cannabis interests that the proposal, if approved, will drive the industry out of Oakland.

The threat is not hyperbole, said Max Mikolonis, a senior legislative analyst for Bonta’s office, who also worked on the MMRSA bill. “It’s a very legitimate possibility there will be an Oakland exodus,” Mikolonis said.

“It’s theoretically possible that if these dispensaries choose to shut down, we should be poised to take advantage if our neighboring cities harm the industry,” Oddie added. However, Alameda’s current city rules put it at a disadvantage in the cannabis market, which is expected to expand in cities that already allow weed sales and cultivation following the passage of Prop. 64. (Under Prop. 64, cities still have the ability to ban or allow cannabis sales.)

If Alameda fails to act, San Leandro is poised to pounce. In fact, San Leandro has already taken progressive steps, in addition to approving new dispensaries. “San Leandro has been socially responsible by requiring a community benefits agreement as part of its permitting process,” noted Mikolonis. San Leandro has also caught the attention of other cities in the state currently attempting to position themselves for the brave new world of legal weed, said City Attorney Richard Pio Roda in October.

In the months ahead, some cities may choose to approve permits for only medical pot dispensaries, while discouraging retail stores that sell marijuana for recreational use. Conversely, some jurisdictions may prefer both. But such rules will be left for the Legislature to hammer out.

But there is still time for cities like Alameda to get onboard, said Mikolonis. “Those that choose to regulate will be at a advantage.” The dual local and state licensing process contained in MMRSA will not commence until 2017 and retail shops might follow a year later. “So, we have time to do it right,” Oddie added.

Although, the Alameda City Council appeared to be receptive to at least beginning a discussion on cannabis during its Nov. 1 meeting, Councilmember Frank Matarrese voiced concern for shielding children from cannabis. Oddie downplayed such issues, citing his numerous tours of cannabis dispensaries and cultivation sites over the past few years. He called Oakland’s popular dispensary, Harborside Health Center, “one of the safest places to be in because of all the security.”

Oddie hopes that the city could impose a surcharge on medical cannabis deliveries from outside Alameda—maybe $5 per delivery.

But he’s aiming for more than that. “We have some space in Alameda, and we have a consumer base for this,” he said. “If we can have a facility that is safe and secure, and we can generate some revenue on it, then that would be my ideal.”

 

Published online on Dec. 5, 2016 at 8:00 a.m.

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