San Diego City Council Considers Easing Rules For Pot Businesses To Support Social Equity

Civic leaders in San Diego are considering easing the regulations for cannabis businesses in an effort to promote social equity in the city’s legal marijuana industry. In addition to launching a new agency to regulate San Diego cannabis businesses, the San Diego City Council has approved a resolution to accept a state grant to support restorative justice for communities harmed by the failed War on Drugs.

At a meeting of the council’s Land Use and Housing Committee held last month, P.J. Fitzgerald, the head of the city’s new Cannabis Business Division, said that rules drafted to govern San Diego’s legal cannabis market in 2014 may be too restrictive to allow for inclusive participation in the industry.

“We are seeing now that there may be unintended constraints causing trouble,” Fitzgerald said. 

Among the proposals being considered are reducing the buffer zone required between cannabis businesses and sensitive use sites including schools and churches. The San Diego City Council is also considering licensing on-site consumption lounges, lifting a cap on dispensaries, and allowing for the operation of independent delivery services.

“As the city moves forward with adoption of a cannabis social equity program,” Fitzgerald said, “we will certainly need room for growth and expansion, and so we’ll need to study changes to the city’s cannabis program.”

Of the 36 dispensaries currently allowed by city regulations, only 23 have been approved, two of which have not yet opened. At least part of the problem is caused by requirements that the businesses be located only in light industrial zones at least 1,000 feet from schools, churches, and other sensitive use locations. Under state law, cannabis businesses are required to be only 600 feet from such sites.

“Our zoning framework, as it stands today, precludes and discourages many minority and low-income San Diegans from benefiting from an industry that historically disadvantaged their communities and livelihoods,” said Councilmember Stephen Whitburn.

Councilmember Sean Elo-Rivera said that San Diego’s cannabis regulations should be revised.

“At this point in time, the industry is fairly exclusive,” Elo-Rivera said. “Only those with access to significant capital, attorneys and consultants have had the ability to compete for an operating permit.”

Phil Rath, a lobbyist who represents a coalition of dispensary owners, said that San Diego’s existing operators can support a “reasonable expansion” of the local industry but noted that the city still has a robust market of illicit cannabis businesses.

“We are cautious about rapidly expanding the number of locations to the point where businesses don’t have the chance to compete with the black market, but instead only compete with each other and drive each other out of business,” Rath said.

San Diego City Council Accepts State Social Equity Grant

Also last month, the San Diego City Council adopted a resolution authorizing city staff to draft an agreement with the Governor’s Office of Business and Economic Development to accept a $75,000 grant to support social equity issues for communities disproportionately harmed by cannabis prohibition policies. The state grant provides funding to cities and local governments with regulated cannabis to study the impact of past cannabis criminalization policies, develop potential funding and goals for a social equity program, and identify barriers to entry under the current regulations.

“We are taking deliberate steps to break systemic inequities and barriers to opportunities in all of our neighborhoods, especially those hit hardest by the War on Drugs,” Mayor Todd Gloria said in a statement. “The grant will help us address disparities and develop an inclusive and equitable legal cannabis marketplace where everyone has the chance to succeed.”

The funding from the grant will be used to develop policy recommendations to ensure greater social equity as San Diego expands its regulated cannabis industry.

“This grant will provide essential funding to help develop a cannabis equity program specific to San Diego, supporting those most disadvantaged by cannabis criminalization in our city through inclusive business ownership and employment strategies in our regulated cannabis industry,” said Fitzgerald.