.Town Business: Medical Weed Boom; Hotel Minimum Wage Controversy; Bicycle Master Plan

Medical Weed Boom: Oakland is poised to adopt a suite of new regulations that will dramatically expand the medical cannabis industry, creating new dispensaries, delivery services, factories, and labs, all while generating millions in new revenue for the city.
At the Oakland City Council finance and public safety committee meetings this week, city leaders will hear about various options to fertilize this budding economy. City staff is proposing to amend Oakland’s existing medical cannabis laws to align with the recently passed state Medical Marijuana Regulation and Safety Act (MMRSA), which will bring parts of the industry such as cannabis cultivation and the manufacturing of THC-laced products out of a regulatory gray zone.
The city is considering licensing up to eight new medical marijuana dispensaries each year in Oakland on top of the existing eight shops. The city would also begin issuing licenses to cannabis transporters, a business enterprise that isn’t currently regulated. By the city’s own estimate, there are already a dozen cannabis delivery services operating in Oakland. Regulating delivery services will ensure quality and safety, while allowing Oakland to tax this industry segment. Oakland will also license cannabis cultivators and manufacturers of marijuana-derived products. Regulation of cultivators and manufacturers is expected to help reduce burglaries and robberies while ensuring that business owners maintain safe operations, reduce fire hazards, and treat their employees fairly.
The economic benefits of these new regulations for Oakland are going to be big. According to a city staff report:
“While staff cannot specify exactly how many new medical cannabis businesses will take advantage of this new permitting process, staff estimates issuing approximately 60 permits in 2016 based on inquiries from interested businesses, attendance at public meetings and industry trends. For some perspective, the City’s eight licensed medical cannabis dispensaries contributed over $4 million in taxes in 2015.”
Oakland is going in big on medical marijuana thanks to the MMRSA, but other East Bay cities are entering and expanding into the weed industry also. See our recent news story on Emeryville and San Leandro, for examples.
One big drawback to the the MMRA, however, is that it could allow the state licensing authority (in the process of being set up) to deny medical marijuana business permits to people with prior cannabis and other non-violent drug convictions hoping to enter the weed industry. Oakland officials hope that they can show state regulators a better path to take by rapidly updating the city’s licensing regime with policies that don’t shut out people who have been caught up in the drug war. See our feature story from March, “Locked Out of Legal Weed” for more details.

Hotel Minimum Wage Controversy: Councilmembers Abel Guillen and Dan Kalb want to update the Oakland Planning Code so that all proposed hotel projects have to obtain a conditional use permit (CUP) from the city. To obtain the CUP, hotel developers would have to show that the new employees they hire would be paid good wages with benefits, and furthermore that they will follow Oakland’s minimum wage law, which requires paying $12.55 an hour and providing paid sick leave. Planning department staff and the planning commission would also be required under the Guillen-Kalb proposal to take into account the impact of new jobs generated by a hotel on public services like transit, or on the local housing market. If jobs at a proposed hotel would pay too low and have poor benefits, the city could reasonably reject an application to build a new hotel.
Guillen and Kalb’s proposal comes amidst a controversy over a Hampton Inn hotel that was approved for construction by the planning department in March, despite the fact that city investigators found that the developers — Dhruv Patel and his parents Sima and Pravin Patel — had violated Oakland’s minimum wage law at another hotel they own and operate near the Oakland airport. Planning department staff approved the new hotel on their own without a public hearing before the full planning commission conditional use permit aren’t required for hotels under Oakland’s current development rules, except under very specific circumstances.
Planning department staff said that they were not allowed to take into account issues such as the minimum wage investigation report as well as the wages and job conditions of employees at the applicant’s other hotels when making their decision to approve the new hotel.
The union UNITE HERE 2850 disagrees and is appealing the planning department’s decision and a hearing is scheduled for May 4.
But the amendment to the Planning Code would likely remove any ambiguity in the existing law and require city staff to consider minimum wage compliance and job conditions in the future for all hotel projects.
Meanwhile, the Patel family is disputing the findings of the city minimum wage investigation at their existing Holiday Inn Express hotel, and they have hired attorneys who are demanding that Oakland withdraw the final report concluding the city’s investigation.

Bicycle Master Plan: Oakland already has a bicycle master plan, but the plan has to be updated every five years in order for the city to be eligible to get money from the Alameda County Transportation Commission. And with all the population growth, housing, and other investments lining up to transform Oakland, it only makes sense to re-draft the bike transportation plan.
According to the city, the number of bicycle commuters in Oakland has more than doubled since 2007, when the bicycle master plan was last updated. The city’s bikeway network — streets, paths, and other infrastructure designed for bikes — has expanded by 40 percent. And bike sharing is coming to Oakland soon. To pay for the update to the bike plan, Oakland will apply for a $500,000 state transportation grant.


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