San Diego Considers Plan to Expand Industry Licensing

(Art Wager/iStock)

With adult-use cannabis sales set to become legal on Jan. 1, cities across California continue to hash out local rules and regulations for industry. The latest, San Diego, is scheduled to consider a proposal Monday that would legalize cannabis cultivation, manufacturing, and testing in the city.

If approved, the plan would continue San Diego’s slow loosening of restrictions on cannabis. The city only began allowing dispensaries in 2015, and earlier this year, officials agreed to allow 16 already-approved medical marijuana dispensaries to expand sales to non-medical consumers once recreational sales begin.

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It’s anyone’s guess as to which way the City Council will fall on the proposal, the San Diego Union-Tribune reports. The nine-member body is made up of five Democrats and four Republicans. Democrats reportedly have shown “more enthusiasm” for relaxing the law than have the four Republicans.

San Diego’s police department has recommended the council reject the proposal, claiming concerns about crime and safety. Police Chief Shelly Zimmerman suggested there would be a “significant” increase in service calls, predicting an increase in explosions and fires. Law enforcement in the region has long had a fractured relationship with the cannabis industry.

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Local industry representatives such as Phil Rath, executive director of The United Medical Marijuana Coalition, say it’s crucial to have a complete supply chain for cannabis locally, which could build in efficiencies and decrease prices by eliminating transportation costs.

But Rath said there are some concerns with the proposal to allow cultivation and processing. The plan would limit the number of cultivation and manufacturing businesses to a maximum of two per City Council district, for a total of up to 18. Rath has said the suggested two-per-district cap would not produce enough cannabis to meet demand in the city.

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“To meet local, legal demand, the number of these permits is going to have to be somewhere in the range of 40 to 50,” he said.

Cannabis taxes will also be on the council’s agenda. San Diego voters approved a local tax on adult-use cannabis in November that starts out at 5%. It rises to 8% in July 2019. The tax can increase to as much as 15% with council approval and would apply to cannabis cultivators, producers, and dispensaries.

There are a few other cities in San Diego County that also sell cannabis legally, including La Mesa and Lemon Grove. La Mesa has indicated it might also begin to allow cultivation.