Statewide Pot Regulations on Hold

Meanwhile, in Oakland, Rich Lee's former medical pot dispensary is up for permit review, and in the state of Washington, recreational pot outlets may open later this summer.

When it comes to regulating retail outlets for recreational and medical marijuana, smaller-scale efforts are having success, but larger efforts are still foundering. The relatively low-population state of Washington is set to see its first pot retail outlets open later this summer. And cities like Oakland have been effectively regulating medical pot for more than a decade. But the state of California can’t seem to get out of its own way.


Oaksterdam founder and Proposition 19 sponsor Rich Lee’s former medical marijuana outlet is up for its annual review. Formerly known as SR-71, then as Coffee Shop Blue Sky, the medical cannabis dispensary Oakland Community Partners (OCP) has an administrative permit renewal hearing on June 2, according to city staff. Oakland pioneered the regulation and taxation of dispensaries in 2003 and currently has seven licensed dispensaries, each with sterling records for public safety.

Located in a choice spot at 1776 Broadway, in the city’s Uptown district, just blocks from the 19th Street BART Station, OCP is currently serving mediocre-grade medical cannabis at average prices in a large, clean, well-lit facility. The so-so product might have something to do with the dispensary’s recent history.

In 2012, federal agents from the IRS, DEA, and US Marshals raided the then-Coffee Shop Blue Sky as part of a federal investigation into Lee and his half-dozen canna-businesses in Uptown. No charges have been filed, but Lee later ceded control of his enterprises to their respective managers, and Blue Sky moved into Lee’s hemp museum space at 1776 Broadway, which still bears the signage “Oaksterdam University.”

Timothy Sherwood, Cyrus Saghebi, and Larry Richards are listed on the City of Oakland’s website as the principals at OCP. Sherwood and Richards are former Blue Sky managers. The club is keeping a very low profile. You won’t even find it on

During a recent visit, armed security checked IDs, while sign-up took a few minutes in the well-kept but barren lobby. The main room is almost empty, with only an ATM on one side and a small, two-station sales counter on the other.

OCP had a small selection of staples like Jack Herer and OG Kush in small dishes that were left open to the air (which saps their aroma). Our pre-weighed bag of Jack Herer featured mostly small, fluffy buds that were lackluster in look, nose, and taste — though the sativa-dominant effects remained intact. Better bud can be found on West Grand Avenue at Blüm Oakland.

Washington State

The first retail pot shops in the state of Washington could be open by late July or early August. The Washington State Liquor Control Board (WSLCB) is in the process of permitting the states’ first retail pot stores, after a late-April lottery determined the order in which applications would be reviewed. The WSLCB reviewed 1,174 applicants in the lottery, with the most intense competition for licenses coming from the Seattle area.

“Being identified as the apparent successful applicant is not a guarantee that the selected applicant will receive a license,” the WSLCB warned in a recent statement. Applicants must also pass a criminal background check and a financial investigation, and be located farther than 1,000 feet from a school or park.

In 2012, Washingtonians approved Initiative 502, which legalized pot for adults age 21 and older. The measure banned home-growing and put the WSLCB in charge of bringing the black market trade into the light by regulating retail marijuana outlets. Weed will be taxed at a stiff 25 percent.

The WSLCB is also licensing pot farms and processing facilities and has issued 25 producer and processor licenses so far. The agency expects to begin issuing retail licenses no later than the first week of July.

Colorado’s recreational pot shops have been open since January 1, and gross tax revenues totaled about $20 million for the first three months, according to the state’s Department of Revenue.


Earlier this week, state Senator Lou Correa amended his Senate Bill 1262 — which would regulate California’s medical cannabis industry — to remove the California Department of Public Health from the position of regulating the state’s $1.8 billion industry, according to the League of California Cities.

Instead, SB 1262 would defer regulations to local code enforcement, further enshrining the state’s confusing patchwork of conflicting medical marijuana rules. The amendment could also perpetuate federal raids on the California weed industry, because SB 1262 is unlikely to satisfy federal guidelines for “strong and effective” statewide regulations.

At a hearing Monday morning, the Senate Appropriations Committee moved SB 1262 to the “suspense file” so that analysts can examine its impact on the state’s budget.

Assemblymember Tom Ammiano’s similar bill — AB 1894 — has also been added to the suspense file, but it could get a floor vote in the Assembly later this month. It puts the Department of Alcoholic Beverage Control in charge of pot, at an estimated cost of $15 million per year, or roughly 25 percent of the existing ABC budget.


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