Pubdate: Tue, 19 May 2015
Source: San Jose Mercury News (CA)
Copyright: 2015 San Jose Mercury News
Author: Ramona Giwargis


A Short Shelf Life? Less Than a Third of Collectives Following Rules: 
San Jose Urges Owners to Comply

SAN JOSE -- A year after San Jose officials adopted rules making it 
one of the state's largest cities to establish a framework allowing 
medical marijuana shops, city leaders are trying to cajole pot stores 
to meet compliance deadlines and residents to be patient.

Two deadlines loom: The adopted rules call for medical marijuana 
shops to meet the city's requirements by July 17.

The City Council will decide Tuesday whether to extend that for those 
that have met many but not all provisions to December 18, which city 
officials said would give the rules a chance to work for those clubs 
demonstrating an effort to comply. In November 2016, voters will 
decide whether to replace the city's regulations with looser rules 
favored by pot providers who gathered signatures to put their measure 
on the ballot.

Only 30 percent of San Jose's nearly 100 medical pot shops have 
agreed to follow the new city rules, though they are struggling to 
meet the July deadline. Others have shut down or continue operating illegally.

Residents like Dennis Nam are frustrated because as the city 
ordinance nears its anniversary, shops continue to operate where they 
shouldn't. The city shut one down near his medical office, but 
another remains, which the city says is too close to a nearby school 
and must relocate.

Nam said the marijuana store's clientele smoke pot in the parking 
lot, loiter and get into fights, and that his patients struggle to 
find parking, fear for their safety and then decide to go elsewhere.

"It's basically driven away most of the business," Nam said. The 
collective's managers didn't respond to a request for comment.

The new regulations passed by the City Council in June set limits on 
where new and existing dispensaries can locate, who can run them and 
how they operate.

Under San Jose's rules, the medical cannabis shops are limited to a 
handful of select industrial areas -- less than 1 percent of the 
city. The collectives can't locate within 1,000 feet of a school, 
park or day care center; 500 feet of a rehab center or shelter; 150 
feet of a home or religious center and 50 feet of another dispensary.

They city also mandates hours of operation, requires background 
checks for staff, bans ingesting marijuana on site and requires that 
the pot is cultivated from one location.

Steve DeAngelo, executive director of Harborside Health Center in San 
Jose and Oakland, said he was scrambling to comply with San Jose's 
new regulations -- but claimed it was going to cost him more than $12 million.

"They imposed quite a heavy burden on us," DeAngelo said. "Despite 
our best efforts to hit all the marks, we're still afraid we're not 
going to make the deadline."

For the majority of dispensary operators, including DeAngelo, 
complying with the city's rules meant moving their shops. Harborside 
Health Center will relocate from its Ringwood Avenue building to 
North 10th Street in July, a $2.5 million move.

Though it's been costly, DeAngelo said he supported regulating 
medical pot. However, he was concerned about a city rule that said if 
marijuana is converted to other forms -- such as candy, capsules or 
brownies -- it must be done on site.

"We've had to convert retail stores into a full-fledged factory," 
DeAngelo said.

Many residents fed up with scofflaw pot stores aren't keen on 
granting any extensions. One property owner, who asked not to be 
identified, fearing retaliation, said she felt "helpless" and that 
her repeated complaints to city officials about stores that won't 
relocate go unanswered.

Creating a city division to oversee and regulate the medical 
marijuana dispensaries could be the answer, according to council 
members Ash Kalra, Raul Peralez and Chappie Jones, who put out a memo 
Friday with that recommendation. They propose no fiscal impact to the 
general fund, similar to the city's gaming control division.

But James Anthony, an Oakland-based attorney, said the medical pot 
rules in San Jose already went too far. The city's push to restrict 
cultivation to one spot might not be tolerated by the federal 
government, Anthony said, and limits access and quality for medical 
pot patients.

San Jose also has skin in the game. A measure approved by voters in 
2010 allows the city to charge a 10 percent tax on all medical 
marijuana transactions. San Jose has collected more than $19 million 
over the last five years.

But Anthony said tax revenue was already dropping because of the city's rules.

"That doesn't mean the amount of medical cannabis activity in San 
Jose is shrinking," Anthony said. "It's just gone underground where 
it's untaxed."

Vice Mayor Rose Herrera wanted to ban the collectives altogether, but 
didn't gain political support from her council colleagues a few years 
ago. Herrera said the current ordinance was working, pointing to 
fewer new dispensaries in San Jose.

But some existing pot shops still weren't playing by the rules, 
Herrera acknowledged.

"There are still businesses that are operating illegally and I wish 
we had better enforcement," she said. "I think we need to find ways 
to streamline the enforcement process to shut them down."

Though he supported the medical marijuana restrictions last year, 
Councilman Johnny Khamis said it was too soon to tell if they were 
working. The city, he said, needed to make the case to voters that it 
could effectively regulate marijuana stores. He noted that the 
marijuana stores' ballot measure didn't impose strict limits on where 
dispensaries can locate, but said voters would ultimately decide how 
San Jose handles the issue.

"I certainly don't want a marijuana collective next to my house, so 
the fact that the initiative doesn't allow us to limit that is a big 
problem," he said. "But I think the voters have a right to control 
their government."
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MAP posted-by: Jay Bergstrom