How do California cannabis regulators’ experiences differ, from San Francisco to Santa Barbara?
On Tuesday, a session of the California Cannabis Control Summit, underway this week, focused on municipalities—or, more specifically, the state’s regulatory patchwork when it comes to cannabis. Four years after voters passed Proposition 64, which legalized cannabis for adult use, a majority of localities still ban cannabis sales within their borders.
Barney Melekian, assistant county executive officer for the County of Santa Barbara, moderated a panel that included Dennis Bozanich, the senior deputy county administrator for the county of Contra Costa, Marisa Rodriguez, director of the San Francisco Office of Cannabis, and Davina Smith, the Cannabis Manager for the City of Sacramento’s Office of Cannabis Management.
Melekian, with 45 years in law enforcement whose last position before regulating cannabis was as undersheriff of Santa Barbara County, stressed that cannabis regulators don’t all take the same path. “My experience with cannabis and cannabis enforcement has taken quite an arc, as they say, as has our society,” he said, at the start of the panel.
The officials shared best practices, details of their regulatory regimes, “how to determine which best fits your community,” and lessons learned.
Emphasizing the spectrum of approaches to cannabis regulation, panelists talked about their specific local approaches. While Contra Costa, for example, took a “go slow” approach, Bozanich said, Rodriguez highlighted that in San Francisco, Outside Lands was the first music festival to have cannabis sales and concessions. “It was a successful event,” she said.
Rodriguez also talked about San Francisco’s equity verification program, and how she approaches her work “with an equity perspective.” She also mentioned a partnership with the San Francisco Bar Association during which attorneys offered their services free to more than 20 equity applicants, for more than 200 hours of pro bono services.
“Having organizations with credibility like the Bar Association, like the San Francisco Chamber, well-established businesses that have leaped in and said ‘this is an important part of our city,’ has certainly been very helpful,” Rodriguez said.
Panelists also discussed regulatory hurdles.Among them: how does an agency staff when they don’t know their needs? In San Francisco, they hit a log jam.
“San Francisco did not anticipate such a huge demand for this business type. We thought that it would be okay to hire a smaller office. But it turned out that, in fact, there would be a huge demand. And then the queue was formed. But we’re really happy to report that that queue is now done. But it took a lot of work,” Rodriguez said.
Smith, of Sacramento, talked about the “Faustian bargain” that some communities face, especially those inviting legal cannabis activity following a ban, if they want the tax revenue. Smith said that, a lot of times, the idea of additional revenue is an “entrance” for communities to allow cannabis.
“Along with that normalization comes this idea that, you know, if your aunt is telling you that she’s at her Red Hat group, and they’re preparing different kinds of cannabis cream for their arthritis, you suddenly realize that this is something that people are using and utilizing and maybe the fears aren’t there. So I think that’s something that a lot of communities are looking at,” Smith said. To this end, Smith said that some communities are starting to ask themselves why that same aunt might be forced to drive 100 miles for the cannabis arthritis cream, or she might have to order from a delivery service that charges fees.
“Why not have one here in your own community and then take the benefit of the taxes from that? So I think that’s something that’s starting to open up a little bit more. And a lot of communities, especially as they see in the cities and the counties that have opened up, that, you know, the sky hasn’t fallen,” she said.
Smith said that, for Sacramento, the cannabis experience has so far gone well, with the locality bringing in millions in tax revenue, which Smith said, “in these times of COVID-19 economic bad news, that is a bright spot, for sure, for us.”
Smith said that the biggest thing that she learned was that, as a cannabis regulator, she had to be “nimble.”
“You have to be prepared to change going into this. You can’t think that whatever regulations or code that you enact is going to be set in stone,” she said, because cannabis regulators can’t anticipate changes at the state level, or shifts in local needs.
Rodriguez agreed, saying that in San Francisco, they continue to “refine” their rules to make them work a “little bit easier for all of us” once they’re implemented.
“Sometimes in theory, things sound great. But when you put them into practice, not so much. Enforcement as well, making sure that these businesses, they comply,” she said.
Rodriguez also said that the cannabis industry itself has surprised her.
“One thing that I think I was the most surprised about when I came into this work was just how warm and willing to collaborate the industry has been,” she said, describing industry members as “helpful” as regulators continue to work through various processes.
Bozanich, of Contra Costa, said he’s looking down the pike about how hemp will fit into, and perhaps change, the cannabis industry in California.
“The state of California has already laid out a different pathway for industrial hemp than they have for other THC-based cannabis products. And so how localities are going to address that is going to be key,” he said.
Next, Bozanich suggested that local cannabis regulators think hard about what national legalization could mean for localities, from tax revenue to “competitive forces” in the local commercial cannabis industry.
“We’re probably on the verge, within the next five years, of legalization on the national level, probably starting first with some relaxing of the banking regulatory environment and then moving in to perhaps larger legalization efforts nationally and allowing for interstate commerce,” Bozanich said, adding that while he doesn’t think it will happen overnight, he’s focusing on what a shift in federal policy, particularly around banking, could mean.
The California Cannabis Control Summit will continue on Wednesday and Thursday.