Santa Rosa, the capital of Sonoma County, moved early last year to position itself as one of the state’s most progressive jurisdictions, permitting commercial cannabis operations in industrial and commercial areas. In 2016, the city council voted to place the incorporation of medical cannabis industry among the city’s five highest priorities.
Why did they do this? As the North Bay’s largest community, Santa Rosa houses and provides services for close to 180,000 people. As the industrial and commercial core, Santa Rosa’s daily population swells to close to 300,000, making it a major provider of services, leisure, entertainment and transportation.
In making the decision to allow for permitting of commercial cannabis, the city council acknowledged an unspoken truth: cannabis operators and the industry comprise a large portion of the local economic and jobs base.
In 2005, the city began permitting medical cannabis dispensaries. The ordinances initially limited how many patients could be served by each dispensary (only 500), but turned a blind eye to where products were grown, manufactured, tested or distributed. Of course, since the state itself hadn’t yet regulated these aspects, the city is hardly to be blamed for allowing access to patients, and simultaneously collecting tax revenue from what turned out to be the city’s two dispensaries.
The ordinance gave the decision-making authority to the city manager, leaving future would-be operators in the dark as the city manager’s sensitivities waxed and waned.
After the passage of MMRSA (then MCRSA, and now MAUCRSA), the city took advantage of more than a decade of history dealing with medical cannabis operators, and elected to treat this industry just like every other one; except of course, that, as a developed community, Santa Rosa previously had no commercial levels of agriculture.
The city went out of its way to envision a mechanism to permit and support cultivators, along with manufacturers, distributors, labs, and transporters.
The community still awaits more robust regulations for dispensaries. Anticipated changes include moving decision making authority to the planning department (taking it out of the political hands of the City Manager).
Rumors abound about caps on permit numbers, setback requirements between dispensaries, and operations restrictions. However, by treating cannabis permits just like any other entitlement, with predictable fees, approval processes, and tax rates, Santa Rosa remains one of the state’s most canna-business friendly cities.
So much for the winners
Calaveras County opened wide the doors for permitting last year following the devastating Butte Fire, and applications (along with hefty application fees) flooded in. Since accepting all those permits and millions of dollars in fees, the county has threatened to shut down the program, and cancel permits.
Indeed, just over a month ago, sheriff’s deputies eradicated 27,000 plants and 25 tons of cannabis, at least some of which was from gardens attempting to participate in the permit program.
Sonoma County
Despite acknowledging that at least two-thirds of the county’s cultivation occurs in agriculture residential and rural residentially-zoned parcels, the board of supervisors banned all commercial cannabis activity in these zones.
The county attempted to frame their decision as encouraging small farmers to locate in larger ag or Industrial areas. However, anyone familiar with land values in the area knows how extremely difficult it is to acquire property in these zones- especially now that they are the only areas where cultivation can occur.
Land values have sky rocketed, and thousands of small farmers are faced with an impossible choice: shut down and risk losing their homes and farms, or continue operating on the black market, and risk everything else.
The county promised a “Phase II” but there’s neither political will nor interest in addressing this devastating ban in any reasonable timeframe.
Complicating factors
League of California Cities. This conservative lobbying organization has frequently misrepresented cannabis regulations’ impacts to local communities, encouraging them to ban the industry outright rather than thoughtfully regulate and tax it. For many cash-strapped cities, this has been a welcome suggestion.
Community Reputation. Many communities are loathe to become the “cannabis capital of [insert County here].” Communities like Napa and Marin Counties have been slow to consider regulations because they fear a dilution of their brand. (Ed. Note: Marin County could be included in the “losers” category for their bait-and-switch attempt to allow four dispensaries in the county, which they then scrapped entirely- permit fees notwithstanding.) Napa looks likely to allow at least some level of industry participation, limiting activities to those with the least impact to the public.
Water/Land/Labor. After slowly recovering from an historic drought and a year of massive wildfires, fears among California policymakers and regulators about cannabis’ supposedly-unknown impacts to water consumption, land use/value, and labor prices have driven harsh restrictions, and, often, a refusal to allow the industry to come out of the shadows.
The city of Oakland addressed some of the labor and social justice issues of the history of the industry by enacting its equity incubator program, in which “traditional” applicants (i.e. those with capital) receive expedited permit processing if they donate 1,000 square feet of their space for three years to an “equity” applicant- a local, low-income resident, who either lives in certain police beats or was arrested for cannabis-related crimes within the last ten years.
Chaos in Sacramento. Within the last two years, the state has withstood the enactment and amendment of MMRSA, which then became MCRSA; passage of AUMA; hundreds of pages of regulations from the Bureau of Medical Cannabis Regulations; SB 94 (which repealed MCRSA and gave us the awkwardly-named MAUCRSA); redaction of the bureau’s regulations; and, just last week, passage of AB 133 and its Senate corollary, SB 118.
Local policymakers have struggled to keep abreast of these frenzied and often sweeping changes, so much so that many communities have refused to enact regulations until the state settles.
Communities like Santa Rosa have hired outside attorneys (mostly looking to gain a foothold in the state) to keep them up to date, but this type of expense isn’t available to many communities, and, even in Santa Rosa, the chaos has resulted in much-delayed changes to dispensary ordinances.
Cannabis v. housing. Most of California is experiencing a housing crisis. The North Bay may be the hardest hit, but every locality must grapple with priorities for local resources. Do they direct their city attorneys/county counsel and planning departments to enact cannabis regulations, or do they spend those resources finding creative, budget-conscious policies to stir housing production?
I hear this across the state from planning departments, city managers, and elected officials, many of whom want, desperately, to take advantage of the tax benefits of the cannabis industry, but worry that to do so would necessitate ignoring housing priorities. Many in the cannabis industry have offered to pay extra fees for planning staff, additional nexus studies (which could give government staff a legitimate basis for charging additional permit fees to the industry), and outside consultants to review their projects – but few communities have entertained such overtures.
Jobs-housing linkage policies could offer a potential solution, but these types of policies are often opposed by chambers of commerce since they increase fees on all development.
