Bay Area cities envision a post-Prop. 19 world of tax revenue and hash bars, but San Francisco opts to wait and see
Much of the controversy around Proposition 19, which would legalize marijuana in California for even nonmedical uses, involves speculation about what comes next. Hash bars on Market Street? Packs of joints next to the cigarettes in Mission District bodegas? Bags of green buds available with the bongs for sale on Haight Street? They are questions that have yet to get serious consideration in the city where the medical marijuana movement was launched.
The measure would give local governments almost complete control over how to regulate recreational-use cannabis sales in much the same way that cities set their own standards for medical marijuana dispensaries, a realm in which San Francisco has shown real leadership and created a well-functioning, successful, and legitimate industry (see "Marijuana goes mainstream," Jan. 27).
But San Franciscans have been slow to prepare for the post-Prop. 19 world, with some other Bay Area cities leaving it in the dust on these issues. Oakland City Council Member Rebecca Kaplan, who is now running for mayor, not only spearheaded that city's ballot measures on taxing recreational pot sales and permitting large scale growing operations, she's actively talking using the Amsterdam model to revitalize the city's downtown business district.
"[Hash bars] absolutely potentially would be part of the mix," Kaplan told us when we asked about the issue during her mayoral endorsement interview, seeing it as part of a multipronged economic development strategy.
When asked if Oakland should have places where people could go to blaze legally, something Oakland doesn't allow in its medical marijuana dispensaries, Kaplan said, "Yes. Oh yeah, we're definitely gonna have those. The only question is gonna be whether the consumption facilities are separate from [those for] sales," or if they're under the same roof.
Kaplan thinks this will be part of the winning strategy that takes cannabis use off street corners while acknowledging its appeal to visitors and "synergy with the restaurants. When I talk about wanting to replicate the Amsterdam model in Oakland ... it doesn't just mean that you have ... a regulated cannabis facility. You also have restaurants, shops, pedestrian safety, nice lighting, patio dining, musicians, artists."
She points out that although an Oakland-regulated cannabis industry may use current alcohol regulation as a template, the two substances would not be sold alongside each other. "Frankly, ABC [California Department of Alcoholic Beverage Control) will freak out." That means, at least in Oakland, you won't be able to purchase cannabis at bars, liquor, or grocery stores.
On this side of the bay, Sup. Ross Mirkarimi — who wrote the regulations on the city's medical marijuana facilities — says it is "extremely premature" to contemplate Amsterdam-esque hash bars. "That would have to occur within a strong regulatory framework," he said, one the Board of Supervisors has yet to envision. San Francisco attorney David Owen, who has helped advise some medical marijuana purveyors, said some dispensaries currently allow on-site medication, and San Francisco might legislate to extend the practice to bars.
Meanwhile other California cities such as Berkeley and Oakland are anticipating Prop. 19's passage much more proactively. Berkeley's Measure S would tax cannabis businesses, applying different rates to for profit med-use cannabis businesses, nonprofit med-use businesses, and rec-use businesses (which won't exist unless Prop 19 passes). The measure would secure medical-use cannabis for low-income patients and tighten regulations on Berkeley's current med-use dispensaries and cultivators regardless of how Prop. 19 fares. There's also a Measure T on the ballot that would establish a new committee that, in the event that Prop. 19 passes, would advise city officials on how to implement it.
Berkeley City Council Member Kriss Worthington said planning for the post-Prop. 19 world is smart to "synchronize a forward movement on the state and local level" and to "hit the ground running," a sentiment that Kaplan also voiced for Oakland and one shared by other cities.
Stockton's Measure I would tax rec-use cannabis businesses at a higher rate than med-use businesses. Sacramento's Measure C is similar, containing a provision for a rec-use tax range if Prop. 19 passes. Richmond's Measure V would tax 5 percent of gross sales of cannabis, and could apply to rec-use businesses too. Oakland's Measure V would add a 5 percent tax to other taxes already on med-use cannabis, and put a 10 percent sales tax on rec-use cannabis. Measure H, on Rancho Cordova's ballot, would tax personal cultivation at a higher tax on any square footage beyond the 25 square feet that Prop 19 specifies. Long Beach's Measure B would establish a business license tax on the city's potential recreational cannabis businesses. Even Albany, which has no dispensaries, would tax for-profit and nonprofit dispensaries differently through its Measure Q.
But Mirkarimi said he would like to tax marijuana cultivation, and has even voiced support for med-use cannabis dispensaries working directly with SF General Hospital to provide to patients, "thereby segregating a special use" and keeping cannabis prices low or nonexistent based on patient needs.
So if Prop. 19 passes, where will San Franciscans be able to purchase rec-use cannabis? Current med-use dispensaries may be a logical choice. "We already have the infrastructure," said SF dispensary Medithrive co-owner Daniel Bornstein.
Whereas alcohol purveyors are accustomed to providing one barrier to purchase (when they card the buyer), dispensaries such as Medithrive offer many. "We already card and only accept patronage from those with a valid doctor recommendation. We also require he/she become a member of the dispensary and limit to one visit per day."
When he contemplates whether Medithrive might provide rec-use cannabis in the future, Bornstein says "If [the city adopts] a responsible statute that's fair, we would welcome the opportunity to offer a broadened service to more people."
That avenue troubles Mirkarimi. "I don't know how that works," he said. Rec-use cannabis purchase would require no doctor's notes and could occur within a for-profit business model. How would dispensaries legally reconcile making money under their nonprofit status? "I don't want to put that burden on them," Mirkarimi said.
Prop. 19 offers other potential implementation conundrums. For example, the measure will only give local governments the option to legalize the limited cultivation/sale of cannabis. Legalization won't be compulsory. Therefore, it is likely that a post-Prop. 19-approved California will become a patchwork of alternating "dry" and "wet" municipalities.
So let's say you're on a road trip and you pass through many cities that all treat cannabis differently. Bornstein and his Medithrive partner Misha Breyburg worry about such a "patchwork of legal complexity." But Prop. 19 provides for the legal transport of cannabis through cities that prohibit its sale, and California Assemblymember Tom Ammiano has already proposed legislation to smooth out the rough spots in Prop. 19 and answer open questions.
So for now, everyone is just waiting to see what state voters do.