Pubdate: Wed, 21 Oct 2015
Source: East Bay Express (CA)
Column: Legalization Nation
Copyright: 2015 East Bay Express
Author: David Downs


Oakland Plans to Capitalize on the State's New Regulations, and Is 
Proposing to Double the Number of Pot Shops, and to License Farms, 
Couriers, Hash Labs, and More. but Some Existing Clubs Don't Want the 

The City of Oakland is moving swiftly to capitalize on California's 
historic, state-level medical marijuana regulations with a vast 
expansion of The Town's cannabis industry permit system. The number 
of permitted dispensaries could double from eight to sixteen, or the 
cap on dispensary permits could be eliminated entirely.

Oakland is also planning to offer a path to citizenship for its 
underground medical canna-businesses - a path that would include 
background checks and licensing and taxing commercial growers, 
hash-makers, edibles kitchens, and testing labs.

Hundreds of permits in a dozen classes - from distributor to 
processor - could become available to entrepreneurs, generating 
thousands of legal jobs, and tens of millions of dollars in tax 
revenue annually for the city. Oakland is aiming to become the 
regional hub for a transparent, fully licensed medical cannabis 
industry - and then a recreational one, if California voters legalize 
pot for adult use next year.

Last Thursday evening at City Hall, before a room packed with 
cannabis industry figures, Assistant to the City Administrator Greg 
Minor presented the big bold new pot plan to the Oakland Cannabis 
Regulatory Commission. The commission has no formal power, but it 
voted overwhelmingly to forward the city staff's plan to the full 
city council with eleven suggested amendments. Chief among them: The 
commission recommends eliminating the cap on the number of licensed 
dispensary permits, rather than raising that cap from eight to 
sixteen, as staff recommended.

But some of Oakland's existing dispensary operators oppose some of 
the proposed sweeping changes. Management and employees from the new 
club Telegraph Health Center asked for more time before the city 
added more competition. Andrew DeAngelo, operations director at 
Harborside Health Center, said existing dispensaries were forming the 
"Oakland Dispensary Council" and would have further comments in the 
coming weeks. "It is our hope to be able to develop a consensus," he said.

About a dozen members of the public spoke in favor of lifting the 
cap. "The laws of supply and demand are a wonderful way to determine 
how many stores there should be," said cannabis attorney Robert 
Raich. "I strongly support lifting arbitrary caps on dispensaries," 
added Matthew Witemyre, of pre-roll maker Medi-Cone. Oakland 
dispensary Magnolia Wellness lobbyist Mickey Martin said, "We welcome 
competition," but asked for the $60,000 annual dispensary permit fee 
to be reduced to $30,000.

No one protested the rest of the pot plan. To a large degree, the 
plan represents Oakland coming to grips with the industry it already 
has. Most permittees would have to find locations in light industrial 
zones, and submit detailed proposals for security, waste and pest 
management, lab testing, and product and workplace safety. "The 
overall goal is to guide commercial cannabis activities away from 
residential areas of the [c]ity," city documents state.

Indoor cannabis cultivation was associated with about a dozen fires 
in Oakland in 2014, the commission found. "Manufacturing in a 
residential area is a bad idea," said Joe Devries, an assistant to 
the city administrator and member of the commission. Referring to 
unregulated butane hash-making, he said, "You have people blowing 
themselves up. I want them to do that in an industrial area."

The plan would also encourage growers to lower their carbon 
footprints. And Oakland's nonprofit mandate would be deleted to match 
the profit-taking provisions allowed in the new state regulations. 
Preference would go to existing unlicensed operators who are paying 
the city's business tax. All commercial farms, warehouses, labs, 
hash-makers, kitchens and transporters without a permit would be 
illegal after the new rules took effect. Nothing would happen to 
unlicensed operators in the short-term, but eventually, Devries said: 
"I guarantee there will be more enforcement."

Minor said city staffers finished drafting Oakland's proposed plan 
"ten minutes after the governor signed the new state laws." Oakland 
plans to use the state's twelve-class licensing structure. Minor 
called the state rules "extremely significant, in that it should 
allow Oakland to regulate medical cannabis activities without federal 
intervention, which crippled prior endeavors by the City of Oakland 
to license cultivation facilities."

State medical cannabis regulations are encouraging municipalities - 
such as San Jose, Long Beach, Berkeley, Desert Hot Springs, and San 
Francisco - to race to permit the largest pot farms they can. The 
state will cap mega-farm permits, and by law, priority will go to 
existing, locally licensed farms. Oakland's plan also provides a 
framework for regulating adult-use legalization - if voters pass it in 2016.

Oakland was one of the first cities in the world to hand out permits 
for medical cannabis dispensaries, starting with four in 2008 and 
going to eight in 2011. Oakland saw a 28 percent increase in cannabis 
sales taxes when it went from four to eight dispensaries.

There are an estimated 21 unlicensed delivery collectives serving 
Oakland. The commission recommended splitting up dispensary licenses 
into categories for brick-and-mortar shops and delivery-only 
services. The full Oakland City Council may take up the issue in 
November or December, with implementation as early as January.
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MAP posted-by: Jay Bergstrom