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SF postpones vote on recreational cannabis law, sales won’t begin Jan. 1

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People in the audience react during a Board of Supervisors meeting at City Hall on Tuesday, Nov. 14, 2017. (Mira Laing/Special to S.F. Examiner)
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San Francisco won’t be ready for recreational cannabis sales on Jan. 1 after the Board of Supervisors postponed a vote on regulations Tuesday, casting into uncertainty the future of the industry.

The board will next vote on the proposal Nov. 28. That means the earliest San Francisco could now allow outlets to begin selling recreational cannabis is Jan. 5, four days after it becomes legal statewide.

The postponement came despite Supervisor Jeff Sheehy, who introduced the regulations with Mayor Ed Lee on Sept. 26, arguing that San Francisco should be ready to offer recreational sales immediately. It also comes as the board remains stuck on how to create citywide planning rules for where new cannabis outlets can open, one of the most politically contentious aspects of the proposal.

SEE RELATED: SF may initially limit outlets selling recreational cannabis to existing dispensaries

Sheehy offered an amendment, with the support of Supervisor Aaron Peskin, to make recreational sales a reality while also postponing the harder decisions about land use regulations.

The amendment would have authorized the existing 46 medical cannabis dispensaries, which includes 16 delivery services, to sell recreational cannabis with their existing permit beginning Jan. 1 after a brief city review and with a state license.

“Not having something available on Jan. 1, I think it makes us look bad,” Sheehy said. “It makes us look like we are not capable of doing our job.”

But Supervisor Malia Cohen, who requested the postponement, blasted the proposal and argued it jeopardized more diverse and low-income residents’ ability to get a foothold in the industry.

As part of the proposed cannabis regulations, Cohen has introduced an equity program that would help people of color, low-income residents and those who were arrested or convicted of drug offenses since 1971 — when then-President Richard Nixon declared a “war on drugs” — find employment and business opportunities in the cannabis industry. “How can equity applicants catch up if we allow existing privileged MCDs a pass forward?” Cohen asked.

Peskin suggested the worry about others getting established in the industry was unfounded. “In reality, there is a huge amount of growth that is going to happen in this industry,” Peskin said. He added, that The City could require that only future cannabis outlets would be for equity applicants.

Peskin was the only board member to vote against the delay. “While we all want to honor equity applicants, the reality is that it’s going to be many months before any of them are up and running,” Peskin told the San Francisco Examiner after the vote. “The fact that there are 30 brick-and-mortar facilities ready to go would allow adult use to be in place at the beginning of January. If those existing operators are not allowed to convert, there won’t be adult use cannabis for a long time. That’s just the reality.”

Supervisor Hillary Ronen was critical of a piecemeal approach and called Jan. 1 a “symbolically important deadline.” She said Sheehy and Peskin’s amendment would be “triply privileging a group that is already so privileged to begin with,” referring to “the almost exclusively white male MCD industry.”

The board would have more leverage to create a robust equity program if it approved a “complete package” that resolves the debates around land use, Ronen said.

Supervisor Mark Farrell said he was prepared to vote on the regulations Tuesday, but deferred to his colleagues. “The voters of San Francisco have spoken,” he said. He cautioned that allowing just MCDs to sell retail “deflates” the board’s will to resolve the tougher issues to allow the industry to grow, and that the debate could drag on for months.

Sheehy said he understood Cohen’s concerns, but that the biggest unresolved issue was around land use. “The real point of contention, where we have become stuck, is on the land use issues,” Sheehy said. “Until we figure that out, nobody is coming in.”

The board has been under intense political pressure around those land use regulations. For weeks, a segment of Asian residents have held rallies and packed hearing rooms at City Hall denouncing cannabis as a harmful drug and calling for tougher regulations, if not an outright ban.

Among the most contentious land use debates is whether to maintain the existing required 1,000-foot buffer between schools and cannabis outlets and have the distance requirement apply to childcare centers as well. But Sheehy has proposed relaxing that distance to 600 feet.

Political pressure is also increasing from cannabis industry supporters to pass regulations right away and without some of the restrictive proposals being discussed.

Prior to the vote, state Sen. Scott Wiener and local Democratic Party chair David Campos, both former supervisors, issued a joint statement that opposed only letting dispensaries sell legal cannabis and called for approval of the regulations that embrace the legal cannabis industry. They threatened to take the issue to the ballot if the board fails.

Supervisor Ahsha Safai downplayed the postponement. “A difference of two or three days does not seem to be a crippling blow to this industry,” Safai said.

Sheehy, however, had questioned if the postponement would ultimately result in adopted regulations. “Do we really think we are going to work through this in the next two weeks? We haven’t worked through it in the last two weeks.”

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