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SF may stunt growth of cannabis industry ahead of legalization

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Supervisor Ahsha Safai’s proposal to effectively ban medical marijuana dispensaries in the Excelsior, by capping the allowed number to the existing three, will be heard by the Planning Commission on Thursday. (Jessica Christian/2016 S.F. Examiner)

San Francisco may ban new medical marijuana dispensaries in one working-class neighborhood or adopt a citywide moratorium on all new ones, just months before legal sales of recreational marijuana will begin.

Supervisor Ahsha Safai introduced on May 2 legislation effectively banning medical marijuana dispensaries in District 11, the Excelsior neighborhood, by capping the allowed number to the existing three there now.

The proposal was opposed by the Small Business Commission last week and will be heard on Thursday by the Planning Commission.

The legislation comes as two more dispensaries look to open in the district. There are also complaints about two of the three existing operators, which are within a few storefronts of each other along Mission Street.

SEE RELATED: Supes to vote to create Office of Cannabis, extend temporary restrictions on pot cultivation permits

Safai’s staff and two business owners near the two dispensaries were unable to win over the Small Business Commission last week with their focus on double parking, youth having access to the drug and a desire to see other neighborhood amenities like a grocery store, restaurants, cafe and bookstores instead.

“I am very sympathetic to your parking issues,” Small Business Commission Chair Mark Dwight said, noting that he lives in a building with a Philz Coffee and there are double — if not triple — parking offenses. “If you want to see tempers flare I think they flare even more on caffeine than they do on cannabis,” Dwight said.

Dwight said the concerns along Mission Street should be addressed by law enforcement and the San Francisco Municipal Transportation Agency — not by a ban that singles out one type of business.

“MCDs [medical cannabis dispensaries] are known to provide a public benefit,” Dwight said. “By banning MCDs, you are precluding that public benefit to anyone else in your district.” 

He also noted that a grocery store requires much more space than an MCD.

But Safai isn’t letting the opposition faze him.

“The Small Business Commission recommended against banning flavored tobacco and menthol cigarettes,” Safai said, in reference to the law recently approved by the Board of Supervisors. “They have their opinion. And so sometimes we listen to them and sometimes we don’t.”

Safai said preventing more dispensaries was “a really big campaign issue for us.” He was elected to the board in November 2016.

“It didn’t matter who I was speaking to … people in general felt like that if the issue was accessibility that we were well-served.”

Safai noted that the district borders San Mateo County, which doesn’t allow dispensaries, and draws people from that area. There are two other dispensaries just over the border of District 11 on Ocean Avenue in District 7.

Safai’s proposal comes before Planning Commission on Thursday, but a staff analysis suggests a more “appropriate tool.”

In its review of the legislation, Aaron Starr, manager of legislative affairs for the Planning Department, recommended The City adopt a “citywide interim moratorium on the approval of MCD applications” until they hash out regulations for recreational use under Prop. 64. A draft of those regulations, which would require approval by the Board of Supervisors, is due by early September under a directive from Mayor Ed Lee. The regulations are expected to go into effect Jan. 1, when legal cannabis sales are to begin throughout the state.

“Any changes to MCD controls should either be informed by this legislative proposal or be included in them,” the analysis states, referring to the forthcoming recreational use regulations.

The proposed restrictions on dispensaries under debate on Thursday have raised concerns from cannabis advocates.

Terrance Alan has chaired the Cannabis State Legislation Task Force since 2015 to advise The City how to regulate legal adult use industry.

“I think it would be concerning to everyone if we did a knee-jerk reaction,” Alan said.

Alan also said it would send the wrong, “we’re stopping everything” message to the cannabis industry, which could adversely impact talks over regulations.

Safai said on Monday that he wasn’t inclined to push a citywide moratorium and suggested it wasn’t fair to halt the process for those who have had pending applications to open in other neighborhoods.

But, he said he was prepared to move forward with his proposal and hoped to have a vote at the full board on July 25.

Safai said the debate is likely a precursor to a broader conversation about a “right number” of pot selling business, including retailers and dispensaries. The City will likely allow dispensaries to also sell cannabis for recreational use.    

There are 46 marijuana dispensaries either in operation or that have received land use approvals, according to the Planning Commission’s report.

The Planning Department is currently reviewing 16 MCD applications, the same report noted.

Last week, the commission approved one of those applications to open in District 4, where there are currently none, after a six-hour hearing that ended just shy of midnight. That approval, however, could be appealed to the Board of Supervisors, which seems likely given how contentious the debate was. There are four other applications for District 4 and nine applications for District 6.

The highest number of permitted or operating MCDs in any single district are 15 in District 6, followed by 11 in District 3 and seven in District 9.

San Francisco first regulated medical marijuana dispensaries in December 2005.


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