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SF places interim restrictions on future cannabis growers

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City officials will not be granting permits for the indoor growth of cannabis while new regulations are put in place after the passage of Prop. 64 legalizing recreational use. (Dan Chambers/Special to S.F. Examiner)
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San Francisco has restricted permits for cannabis cultivators for the next six months as city officials hash out new regulations for warehouse growing after voters legalized recreational marijuana throughout California.

Instead of allowing indoor cannabis cultivators to apply for permits over the counter, the Board of Supervisors approved legislation last week requiring a conditional-use permit, which mandates more review and can be appealed to the board, essentially halting the permitting process.

The proposal was part of Mayor Ed Lee’s executive order issued a day after voters in November approved Proposition 64, which legalized recreational marijuana use, directing city departments to come up with recreational permitting rules by Sept. 1. The state expects to begin issuing permits for recreational use January 2018, but applicants would need to comply with local rules as well.

State Sen. Jerry Hill, D-San Mateo, and other legislators are expected to hold a hearing in Sacramento today to ask state regulators if they will be ready to start issuing permits for and taxing recreational cannabis beginning January 2018.

The initial proposal from the mayor requested an 18-month interim control on permits to grow cannabis in warehouse space — known as production, distribution and repair (PDR) — but after negotiations with those in the industry and members of the board it was reduced to six months.

Supervisor Aaron Peskin had requested the reduction in time. “I want to hold staffs’ feet the fire,” Peskin said, while also noting that the mayor’s directive asked city departments to come up with rules by Sept. 1.

City Planner Aaron Starr is tasked with developing controls for cultivation in PDR spaces, along with Laurel Arvanitidis of the Office of Economic and Workforce Development.

The challenges include community acceptance of the operations, but also the conflicts with the manufacturing industry which uses PDR space.

“Making sure that existing non-indoor [agriculture] cannabis PDR space is maintained is an interest,” Peskin said. “But we also have an interest in making sure that this thriving industry which provides for many jobs is also accommodated.”

The grandfathering provision was a subject of debate last week.

The proposal grandfathers in cultivators who already had their permits, which are permits for indoor agriculture use, on or before Nov. 8, 2016, when Prop. 64 was approved, as well as those who filed for permits with Department of Building Inspection for the necessary permits on or before Nov. 8. The permit holders could also expand their existing operations on the same site.

Peskin made an amendment to include those who “attempted to apply to the Department of Public Health for the building permit and was not referred to DBI until after Nov. 8,” which he said benefited about three potential cultivators.

Supervisor Jane Kim proposed altering the grandfathering clause to as late as Jan. 24, and then to Nov. 25, 2016.

Both dates were sharply criticized by Supervisor Malia Cohen, who did not want the legislation to grandfather in a Nov. 18 applicant in the Bayview district she represents.

Cohen said that applicant came to her attention about an hour before last week’s board meeting. “We haven’t done the proper work that needs to be done with the community,” Cohen said during the meeting. “This is big changes that we are dealing with in the southeast and we need to be thoughtful about our approach.”

Arvanitidis said city departments couldn’t provide a list available for those impacted but they relied on anecdotal information and those who came to them to discuss the proposal.

Changing the date to Nov. 25, 2016, would have benefited two known applicants, one of which was dated Nov. 18 for 333 Potrero Ave. in Cohen’s district to convert a garage into a “greenhouse for growing medical cannabis,” according to DBI records. It wasn’t known the location of the other application.

“There could be more,” she said.

Extending the date to Nov. 25 was rejected by the board in a 8-3 vote, with Kim along with supervisors Sandra Fewer and Hillary Ronen supporting it.

Within six months, The City is expected to propose long-term controls for cannabis cultivation in PDR space. “While this new opportunity is exciting it does pose some challenges for our industrial sector,” Arvanitidis said.

Cohen said that “in the next six months, I’d like to see an aggressive effort from The City to conduct a robust community outreach process to develop and to shape the long term controls regarding the indoor cultivation sites.”

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