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SF’s proposed cannabis regulations make hazy when recreational sales could begin

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A jar of marijuana is seen on the counter inside The Apothecarium’s Marina dispensary at 2414 Lombard St. (Mira Laing/Special to S.F. Examiner)
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Cannabis regulations proposed Tuesday leave uncertain when San Francisco will actually start permitting businesses to sell recreational marijuana.

The City won’t issue permits for recreational marijuana sales until an equity program is adopted, under legislation introduced Tuesday by Mayor Ed Lee along with Supervisor Jeff Sheehy.

But there is no deadline for the creation of the equity program, and many specifics were lacking Tuesday.

SEE RELATED: SF appoints director to head new Office of Cannabis

The state plans to issue licenses to businesses for recreational cannabis sales beginning Jan 1. But San Francisco is not expected to be ready by that date.

Sheehy expressed some frustration over the package of legislation to regulate the cannabis industry in San Francisco as California ushers in legal recreational sales under Proposition 64, which voters passed last year.

SEE RELATED: SF passes moratorium on medical cannabis dispensary permits

“This legislation as introduced falls short. Out of a nearly 70-page ordinance less than a page discusses how to make this industry equitable,” Sheehy said, adding that that proposal “is far from perfect and even further from final.”

The mayor had asked city department heads to draft new regulations last year and The City recently created an Office of Cannabis led by director Nicole Elliott to help craft and oversee the new regulations. Elliott is charged with creating the equity program in partnership with the Human Rights Commission, under the proposal.

Sheehy, a medical cannabis cardholder who is openly HIV positive, is a strong advocate of the marijuana industry.

“San Francisco led the effort the effort to pass Proposition 215 in 1996. That statewide initiative demonstrated that Californians understood the medical benefits of cannabis for people with serious conditions like cancer and HIV,” Sheehy said. “We must protect and build on that legacy while ensuring that the new adult use industry is equitable.”

There are about 34 brick-and-mortar medical cannabis dispensaries and 14 delivery services.

Supporters of adult use marijuana would like to see a great deal more retail cannabis businesses to create a thriving industry and point to places like Denver, which legalized recreational marijuana four years ago and has about 270 retail businesses.

Controversy over San Francisco’s handling of the future of the cannabis industry had already surfaced earlier this month when the board enacted a 45-day moratorium on new medical cannabis dispensaries while The City worked on new regulations.

Marijuana advocates had argued the measure sent the wrong message and harmed San Francisco’s role as a leader on marijuana.

Equity programs are not unprecedented. Elliott must submit an equity report by Nov. 1 that could help The City craft its own program.

Oakland has an equity program in which a certain number of permits go toward “equity” applicants, defined by such parameters as low-income and if they’ve had a cannabis-related conviction.

San Francisco’s Cannabis State Legalization Task Force has already been discussing what equity might look like for The City’s permitting of recreational sales.

Suggestions include requiring 25 percent of the employees of licensing applicants with 15 or more employees to have a conviction history to help reduce recidivism.

Other suggestions discussed include setting aside half the cannabis licenses for “equity populations” such as those “who have lived in neighborhoods disproportionately impacted by War on Drugs police activity (Mission, Tenderloin, Southern, Bayview police districts) for five years since 1996 (i.e. post-Prop 215 enactment) as an adult,” according to a task force report.

Existing medical dispensaries would need to obtain temporary permits from the Office of Cannabis to continue operating as medical marijuana dispensaries, which run for 120 days and can be renewed for 90-day periods. The proposal does not foresee issuing temporary permits past 2018.

Should the Office of Cannabis begin issuing recreational sale permits, it would prioritize the yet to be defined “equity” applicants, followed by medical marijuana dispensaries.

The sweeping regulations also change the rules around where cannabis businesses can operate.

For example, the current rule restricting marijuana businesses from operating within 1,000 feet of schools will decrease to a 600-foot radius from a public or private school and cannot be located within 300 feet of another marijuana business.

The legislation also creates permitting for other aspects of the industry that relate to cultivation and manufacturing.

Sheehy praised this part of the proposal as a “strong start” to bring these operations “out of the shadows and be properly regulated under state and local law.”

The Planning Commission is expected to hold a hearing Thursday on the proposal.

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