Judgment Day for San Jose

The city's overly restrictive medical pot rules take effect on Friday, but the ensuing chaos could actually signal progress for the Bay Area's largest municipality.

On Friday, July 18, San Jose’s new medical marijuana laws go into effect. The new rules make all 85 or so of the dispensaries in the city illegal. Many of the clubs, however, probably won’t close. Instead, some collectives will try to work with the city to find ways to remain open, while others plan to file lawsuits to overturn the new ordinance. And some dispensary operators are gathering signatures for a voter referendum to soften the law.

Friday, in short, is not going to be a day of shock and awe, said Dave Hodges, who operates the dispensary A2C2. Instead, the city likely will turn up the heat on dispensaries over the next year. “It’ll affect operations for every collective,” said Doug Chloupek co-founder and CEO of the five-year-old, 18,000-patient MedMar Healing Center.

San Jose’s new rules stem from two city ordinances — a highly restrictive zoning law that relegates clubs to occupying just 1 percent of the city’s geography, along with another law that includes numerous new regulations for dispensaries. Both ordinances have significant problems, yet even that’s progress for San Jose. The city has struggled since 1996 to wrap its mind around the idea of providing patients with safe access to cannabis.

The good aspects of the new laws: The regulations codify dispensary best practices like paying taxes, obeying fire codes, and having security guards and a safe. If a dispensary jumps through all 65 pages of the new hoops, it could have an actual license from the city of San Jose to dispense pot. After literally decades of “marijuana is not medicine” rhetoric in San Jose City Hall, that’s progress.

The bad: We can’t see how any club will actually be able to qualify for a license, and many operators say the new rules amount to a de-facto ban. “It’s not progress,” said Chloupek. “It’s a ban. Just a sneaky one.”

For one, San Jose is mandating that dispensaries grow all their own weed. This stipulation — which is part of Colorado’s new pot regulations — is called “vertical integration” and will likely result in 5,000- to 20,000-square-foot, Costco-like warehouses of pot.

That’s the kind of idea that brought the wrath of the federal government down on Oakland four years ago, when it contemplated allowing large farms for medical marijuana growing. “It’s pretty ridiculous [for San Jose],” said Hodges.

“Oakland was four years ago,” said James Anthony, a Bay Area attorney and dispensary expert. “Maybe somebody will try it and we’ll find out — can you have a 5-, 10-, 20-, 40,000 square-foot grow in San Jose?”

The new law also strips more than one million residents and visitors of their medical privacy. Section 6.88.280 of the ordinance states that the definition of “‘Private Medical Record’ shall not include the recommendation of an Attending Physician or doctor for the medical use of Marijuana, an Identification Card, or the designation of a Primary Caregiver by a Qualified Patient.”

Pot records, in short, will no longer be private in San Jose, Anthony said. The mayor or “any official” involved in or related to pot enforcement will be able walk into a dispensary at any time and demand to examine people’s medical files.

San Jose’s law also disenfranchises qualified patients aged 18 to 21. No one under 21 will be allowed on dispensary property — not even a 20-year-old, stage-4 cancer patient.

On July 10, protesters drove by City Hall honking, as the Silicon Valley Cannabis Coalition demonstrated against the rules by handing out vouchers for free pot doctor appointments to the first 1,000 protestors. The coalition registered folks to vote and asked them to sign a petition referendum that would remove the most odious parts of the new law, including the vertical-integration requirement and the privacy-invasion provision. Hodges said the coalition will collect about 70,000 valid signatures by the deadline of July 18. “It’s been awesome,” he said.

Past petitions have failed, however, and Anthony is doubtful that his one will succeed. “They’re probably doing a really great job, but that’s a really hard lift,” he said.

The privacy invasion provision and the new 21-and-over rule might be grounds for a limited lawsuit, said Anthony, but he doubts a dispensary could get an injunction against all the new regulations. The state Supreme Court ruled in 2013 that cities have the legal power to regulate or ban clubs. In addition, draft regulations pending in Sacramento would solidify the power of local governments to control the distribution of medical weed.

Meanwhile, San Jose clubs likely will get a non-compliance letter from the city in the next few weeks, launching a civil process that could take months to complete before clubs would be forced to close, Hodges said. Operators, in other words, don’t expect law enforcement raids on Friday.

Clubs will have ninety days to obtain a city zoning certificate, and will have a year to move to a compliant location. Currently, only about five dispensaries are compliant with the new zoning rules. The rest will have to either move or close.

City staffers plan to hold workshops for dispensary operators to walk them through the as-yet-to-be-created application process. San Jose’s bureaucracy will then attempt to implement the unworkable law. “[T]he good old days are over,” Anthony said. “You can’t just throw open [a dispensary] wherever you can find a willing landlord.”

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