City Council Delays Step Toward Legal Marijuana Sales in Chula Vista

City Council Delays Step Toward Legal Marijuana Sales in Chula Vista
Chula Vista City council postpones vote on pot dispensaries
nThe Chula Vista City Council sent a proposed cannabis regulation ordinance back for fine-tuning on Tuesday, persuaded by critics from the marijuana industry that it was too tough on prospective entrepreneurs in one respect and not tough enough in another.

At issue was a proposed requirement that applicants have at least one business partner who has at least one year of experience operating a legal marijuana business or three years in the heavily regulated alcoholic beverage or pharmaceutical areas.

"I think a lot of people are realizing this now, prop 64 was passed by the people, even people in this city, majority passed the proposition, so I think they might not be the most outspoken. There's still a stigma that we are past the tipping point. As soon as people get over that this is some type of evil thing and start to just embrace that it's going to be here one way or another, it's better to control it, it's better to tax it,  better to let people come out of the shadows," said Green. 

Those limits were drawn up in response to directives from the council that licenses be limited to highly qualified businesses and operators with clean criminal records. The city has closed down about 35 illegal marijuana dispensaries and has at least eight more remaining.

"To have to operate a lawful cannabis business for one year disqualifies everybody that is self contained in the city and if you're going to take it to the other section which is the 36 months of pharmaceutical alcohol-related business, I understand their intent, but I don't think it can be practically applied," said Green. 

Attorneys and other representatives of the cannabis industry said, however, that these and other tough vetting requirements could wind up steering Chula Vista’s licenses toward out-of-state applicants and a small group of operators of dispensaries that have sold medical marijuana under Proposition 215 of 1996.

The restriction will “disenfranchise quality people that want to make a mark in this industry,” said Sean McDermott, noting that his own 35 years of business experience and seven contractor licenses – including an alarm company – would fail to make him eligible for a license.

The ordinance also requires an applicant to have at least a year of experience operating a legal marijuana business. After hearing complaints during public testimony,  city leaders agreed to reconsider that requirement. 

“I’m more than qualified,” McDermott said. “I should not be stopped from applying for this.”

The matter will return to the council Feb. 20 under directions to the staff taken without a formal vote.

Daniel Green has been wanting to start a marijuana business in Chula Vista for 10 years, but as it stands now, he doesn't have the experience needed.

Critics also convinced the council to reconsider provisions of the ordinance requiring applicants to identify a prospective business site only in phase two of a three-phase application process instead of the first. Opponents said this will encourage land speculation and “hogging” of licenses by out-of-town entrepreneurs who may never actually start a business. “There are firms out there that that’s all they do,” said attorney Gina Austin.

Even though voters approved the use of recreational pot in 2016, cities still have the final say and selling it in Chula Vista remains illegal. 

In its current draft, the ordinance allows as many as 12 marijuana retail and delivery businesses beginning in 2019 with an as-yet undetermined tax measure to be presented to voters through a June ballot measure.

If passed, the measure would allow for twelve commercial licenses, including eight store fronts. A pot shop must be at least 150 feet from homes. 

The city expects to pull in as much as $6 million a year through a gross-receipts tax and square-footage fees imposed on commercial cannabis businesses, recovering the costs of licensing and enforcement. The tax, however, must be approved by voters in the June 5 ballot.

The city has struggled to deal with pot shops operating illegally; 35 have been shut down in the last year with roughly 8 still operating. 

A major step toward legalizing recreational marijuana sales in Chula Vista was put on hold Tuesday.

City Councilmembers delayed a vote on a draft ordinance that would approve recreational sales in the city.

Councilmembers plan to amend the two-phase application process to make sure applicants have a proposed location in the first phase. They will also relax proposed regulations that required potential dispensary owners to have operated a liquor or drug store for three years, or a lawful pot shop for one year.

Prospective dispensary owner Daniel Green’s chances will increase significantly if the City Council chooses to relax those regulations.

“To have had to run a lawful cannabis business for one year pretty much disqualifies everyone that’s self-contained in the city,” Daniel said.

If approved, the ordinance would allow for a total of two storefronts and one delivery service in each of the city’s four districts.

Resident Carol Green raised her children in the city. She’s concerned about zoning regulations keeping storefronts at least 150 feet away from homes, 600 feet away from parks and youth-oriented businesses, and 1,000 feet from daycares or schools.

“Any time you advertise and commercialize a product, you send the message it’s safe and harmless,” Carol said. “When we see it normalized, we see younger and younger people try it. The results can be devastating.”

Councilmembers plan to vote on the amended draft ordinance Feb. 20. If passed, it won’t go into effect unless voters approve a June ballot measure to tax recreational cannabis up to 15 percent.

If those two dominoes fall, licenses aren’t expected to be issued until January.

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