Central California

San Joaquin keeps commercial cannabis ban in place for now

The San Joaquin County Board of Supervisors voted Tuesday to keep in place a ban on commercial cannabis activity in unincorporated areas of the county while officials figure out if the county would be better served by limiting such businesses to specific areas.

In Feb. 2017, the board tasked the County Counsel’s office with collecting information and compiling a report advising the board on whether to maintain the existing ban on commercial cannabis activity in unincorporated county areas or to develop a new ordinance for licensing and regulating various types of businesses, including retail, manufacturing, distribution and testing.

Deputy County Counsel Zoey Merrill presented her office’s findings to the board during the Tuesday meeting. The board chose to keep the current ban but instructed the counsel to develop a new ordinance by November which would approve an isolated business park that includes commercial cultivation, manufacturing, testing, distribution and retail facilities for both medicinal and recreational cannabis, as well as a new department to regulate the new businesses and regulations for personal cannabis cultivation. The findings were based on information gathered from seven public workshops, as well as meetings with stakeholders and cannabis industry professionals.

During the meetings with industry professionals, it was made clear that overregulation or overtaxation could hinder the businesses’ abilities to compete with the black market, according to Merrill. Merrill also relayed the industry professionals’ requests that a merit-based system be used in deciding permits and approval for businesses, as well as incentives for women and minority business owners seeking to enter the cannabis industry.

The board has until January to develop the new ordinance, or risk being ineligible for a competitive grant program that distributes funds acquired through taxes and fees on commercial cannabis businesses and licenses, according to District Attorney Tori Verber Salazar.

The ordinance must comply with the Medicinal and Adult Use Cannabis Regulation and Safety Act (MAUCRSA), which Governor Jerry Brown signed into law on June 27 to replace the Medical Cannabis Regulation and Safety Act (MCRSA) and the Adult Use of Marijuana Act (AUMA), also known as Proposition 64.

The ordinance must cover regulation, licensing and taxation for commercial cultivation, with tax rates varying based on the size of the cultivation, as well as whether to allow indoor, outdoor, or mixed-light (greenhouse) cultivation facilities.

Additionally, the ordinance must specify whether or not to allow storefront retail facilities, also known as dispensaries, or delivery services. Merrill noted that if the county decides to ban either cultivation or retail, the county will be ineligible for the aforementioned grants.

Under MAUCRSA, the county ordinance would develop a dual-licensing system, allowing licensees to choose whether they want a license for medicinal or recreational dispensaries. Recreational use would be limited to adults 21 years of age and older, while the age limit for medicinal use is still 18.

Cannabis is still a Schedule One narcotic under federal law, meaning that businesses involved with the substance operate on a largely cash-based system. This makes it difficult for the businesses to open bank accounts, which in turn hinders the state government’s ability to tax the businesses appropriately. This is just one of many concerns voiced during Tuesday’s meeting, along with concerns about security, crime rates and real estate values.

Pat Patrick, president and CEO of the Lodi Chamber of Commerce, said that he would only be in favor of indoor cultivation facilities in the county, an opinion shared by many others in both the public workshops earlier in the year and the board meeting on Tuesday, and that cultivation be limited to industrial areas due to the risk of theft and other crimes, as well as problems caused by the plants’ odor.

“The odor travels, it could permeate grape skins and render the wine deficient, causing it to lose value,” said Patrick.

Patrick also brought up the argument that cannabis growers can afford to pay higher wages than other agriculture, construction or entry-level manufacturing jobs, as well as mentioning that some employers have already had issues with employees using cannabis on the job, leading to potential safety risks.

Betsy Robinson of Lockeford made the argument that approving commercial cannabis licenses would be endorsing drug use, claiming that cannabis is a gateway to other, harder drugs.

“Cannabis is a gateway to meth and heroin,” said Robinson.

Bruce Blodgett, executive director of the San Joaquin Farm Bureau, was also opposed to allowing commercial cannabis operations in San Joaquin County’s unincorporated areas, saying that growers would lose farm loans, insurance and USDA funds due to the substance’s Schedule One classification, adding that the tax revenue would never trickle down to the county. Blodgett also argued that allowing commercial cannabis in the county would not reduce the black market, despite Salazar’s claims to the contrary.

District Attorney Tori Salazar and San Joaquin County Sheriff Steve Moore both had mixed feelings on the ordinance. Although Salazar is not in favor of cannabis, she has admitted that maintaining the ban would do nothing to eliminate the black market that will exist regardless of legalization, citing the continued sale of illegal alcohol, cigarettes and counterfeit merchandise, although she does believe that legalization would help decrease it.

“The people have voted. I don’t always agree with their decisions, but I must uphold them,” said Salazar. “I voted against Prop 64, but it’s time to admit that we have lost the war on marijuana.

“Marijuana is here to stay. We can either embrace the opportunities to regulate it and potentially collect revenue, or we can continue to fight a losing battle.”

Moore added that “we’re going to get more calls regarding marijuana either way, and legalizing it would mean an additional need for security from the Sheriff’s Department. Still, I advise that we comply with the state law, but keep the ban in place for another year and learn form other counties’ mistakes.”

The San Joaquin County Counsel will have until this November to bring a revised ordinance to the board, taking these concerns into consideration.