New buds

Just months ago, the city appeared poised to crack down on medical-cannabis dispensaries. Now, it’s reaching out to stakeholders. What changed?

A nonfat grande mocha, please. Wait, this isn’t Starbucks? Correct: It’s El Camino Wellness Center, a Sacramento medical-cannabis dispensary. Employee Raquel chats with Max Del Real, who represents the Sacramento Alliance of Collectives.

A nonfat grande mocha, please. Wait, this isn’t Starbucks? Correct: It’s El Camino Wellness Center, a Sacramento medical-cannabis dispensary. Employee Raquel chats with Max Del Real, who represents the Sacramento Alliance of Collectives.

Photo by Gabor Mereg

After 15 years, is the city of Sacramento finally ready to embrace medical cannabis?

If so, it would be an about-face. Just a few months ago, Sacramento was on the verge of approving a contentious draft ordinance that would have imposed strict regulations—some called it a “de facto ban”—on city medical-marijuana dispensaries. Municipal governments have approved similar ordinances or bans, including in Folsom, Citrus Heights, West Sacramento, Davis, and Placer and Sacramento counties.

As dispensary owner and Sacramento Alliance of Collectives’ member Jeanne Larsson put it: “They were just going to slam the ordinance into place.”

Now, instead, city officials are reaching out to stakeholders, rethinking Sacramento’s medical-cannabis future. On June 1, the Sacramento City Council unanimously voted to extend its dispensary moratorium and continue work on its first ever ordinance.

And ideas previously off-limits are now on the table.

“The council realized overall that there’s a need to work with stakeholders while continuing to resolve, or at least narrow down, the issue,” explained Councilman Steve Cohn, who called the staff’s initial draft ordinance “too inflexible.”

City officials, who previously sought to cap the number of dispensaries at 12, are now considering allowing more dispensaries to exist in the Midtown/downtown area. There’s also talk of taxing medical cannabis, which could appear on the November ballot, in addition to a statewide measure that would legalize all marijuana, not just medical. A coalition of 15 local dispensaries has proposed taxation and permit fees, too, which might generate additional millions of dollars in revenue. And there’s even discussion of the city getting into the marijuana-cultivation business itself.

City special projects manager Michelle Heppner, who’s been charged with writing the ordinance, said such a law “needs to be vetted properly.” The city originally hoped to approve an ordinance by July, but the new goal is by year’s end. “I don’t think we should rush to get stuff done.”

Some argue the city has been anything but in a hurry.

Ryan Landers was there in the beginning, January 1997, when he and Dennis Peron, author of Proposition 215—which allows for collective and cooperative distribution of medical cannabis—first approached the city to discuss opening a medical-cannabis dispensary. Council shot them down, said Landers, who today still advocates for patients’ rights and uses medical cannabis to alleviate AIDS symptoms.

Eventually, local dispensaries such as Canna Care and Capitol Wellness Collective opened shop, operating legally under state law but without city oversight. They paid taxes, but were neither protected from federal raids nor acknowledged by Sacramento County.

But in late 2008, when Barack Obama was elected president, the scene altered. Medical-cannabis clubs in California exploded by more than 200 percent. Sacramento wasn’t immune to the boon; this led to city council implementing a moratorium on new dispensaries in June 2009.

This past April, the city finally presented a draft ordinance—to resounding opposition. Patients’ rights groups lambasted the ordinance, calling it effectively a ban on medical marijuana. Dispensary owners claimed it was so strict, they’d have to close shop. But instead of ramming it through and into law, city council voted this month to extend its moratorium and continue work on the ordinance.

“It was a smart thing to do. Sacramento did the right thing,” praised Max Del Real, a statewide cannabis lobbyist who also represents the Sacramento Alliance of Collectives, which supported extending the moratorium. Del Real has seen bogus ordinances and their resultant complications across the state, such as Los Angeles’ lawsuit-riddled attempt to regulate, and views the city’s actions as a proverbial olive branch. “Essentially, Sacramento said, ‘We are going to work with stakeholders until we get this right.’”

But the future still is uncertain—except that there’ll likely be controversy.

“There’s infighting on the council over this ordinance,” said patient advocate Landers. Councilwoman Bonnie Parnell doesn’t like the draft ordinance’s zoning and variance restrictions, which were written by Councilwoman Sandy Sheedy. Councilman Cohn says the pot clubs “shouldn’t be treated like strip clubs and payday centers.” Councilman Kevin McCarty has questioned the effectiveness of the moratorium. And Councilman Robbie Waters, and likely Councilman Ray Tretheway, will be gone come November; their replacements are unknown quantities.

Patients’ rights advocate Ryan Landers, left, and Jeanne Larsson at her medical-cannabis dispensary, A Therapeutic Alternative.

Photo by Gabor Mereg

City Manager Gus Vina has thrown his hat in the ring, too, proposing a special tax on medical cannabis, which would need to be approved by voters, possibly this fall. The city of Oakland passed the nation’s first medical-cannabis tax last year; a similar levy in Sacramento might generate upward of $3 million annually, in addition to annual fees and sales tax.

“If we can spark [the city’s] interest with revenue, they may be more inclined to let us stay open,” said Larsson, Alliance member and owner of A Therapeutic Alternative. The Alliance—whose leadership consists of Larsson, Sonny Kumar of El Camino Wellness Center and Caleb Counts of Fruitridge Health & Wellness Collective—hired lobbyist Del Real this spring so as to ramp up communication with the city.

“We want to pay taxes. We want to be a part of the community, so to speak, and we want to provide resources back to the city of Sacramento,” explained Del Real, who has met with city council, city manager staff and the mayor’s office on multiple occasions.

But when it comes to specific dollar amounts, the Alliance has yet to reach consensus. “The dispensaries should be willing to pay a reasonable amount for a license, and I think the city should adopt a tax similar to the city of Oakland,” argued Kumar, who co-owns El Camino Wellness Center, which serves more than 9,000 patients, the most in Sacramento.

El Camino often is cited as a model dispensary. It’s located in a poorer neighborhood off of El Camino Boulevard near Auburn Boulevard, once riddled by graffiti, drug use and illegal dumping. The El Camino dispensary property, enclosed by iron-rod fence, is beautifully landscaped, not unlike a Palm Springs resort. Security, dressed in black and donning radio headsets, greet patients in the parking lot, like valet parking at Midtown nightclubs. Inside, there’s security, a metal detector, receptionists, leather couches and a brightly lit, pharmacylike retail area, complete with a digital “menu” board displaying medical-cannabis offerings, and smiling employees.

The owners say El Camino offers 100 percent health coverage and a matching 401(k) up to 4 percent to its 30 staffers. And Kumar recently appeared on a Capital Public Radio panel with, among others, Sacramento Sheriff John McGinness and former federal prosecutor McGregor Scott. “These guys are very open-minded now,” Kumar said; Sacramento Police Chief Rick Braziel recently stated that Sacramento’s dispensaries are not dangerous.

Yet despite this sea change, some roadblocks remain.

“The special tax is unacceptable. These patients are sick. They’re poor. You’re not going to balance the budget on our backs,” argued Landers, who says dispensary owners will invariably pass incurred expenses on to patients.

Even Cohn warns that revenue potential doesn’t always outweigh the cost to society, especially when it comes to legalization of all cannabis, not just medical. “Still, every bit helps right now,” said Cohn; the city’s deficit is $43 million.

At least nine dispensaries operate in the councilman’s district without incident, he says. This is why Cohn directed city staff to explore carving out an area in the central city where clubs might remain open under a “special use permit.” This is not a “mini-Amsterdam,” Cohn insists, but instead an alternative to relegating dispensaries to far-flung industrial neighborhoods, inaccessible by public transit.

Special projects manager Heppner confirmed that city staff has discussed allowing more dispensaries in Midtown/downtown, but that “we’re not ready to disclose” any details.

As for a cap of only 12 clubs, Cohn says the actual number is still up in the air. “I don’t think it’s hard and fast,” he said.

The Alliance, of course, opposes any limit. “If the city can make money on dispensaries, why would they want to close us down?” Del Real asked.

One thing the final ordinance will address is medical-cannabis delivery companies. “It’s going to be kind of like a pizza place,” explained Heppner, who says mobile-cannabis businesses will have to be based out of a brick-and-mortar dispensary. “You can’t make pizza at your house and go delivering it around the city.”

Still, for the first time in perhaps 15 years, the city appears poised to work with medical-cannabis dispensaries, looking closer at the potential for industry jobs, public safety and revenue. “The city has even expressed an interest in commercial cultivation,” said Alliance leader Larsson, explaining that she’s heard talk of using the city’s vacant industrial properties for permitted cannabis grows.

That would be a major concession. But Landers says that the dispensaries have proven themselves worthy. He cites a recent situation where a club popped up on Center Parkway in Bonnie Parnell’s district. City staff had exercised all resources trying to close the club; Landers told Parnell at a June 1 council meeting that he’d “take care of it,” as he put it.

“The dispensary owner took his sign down, and he’ll be moving out of Parnell’s district,” Landers said of the resolution.

“We’ve always self-regulated. And we continue to do so,” Larsson explained.

“The era of raids is over. The era of screaming is over,” summed up lobbyist Del Real. “We’re engaged. There are open lines of communication.”

This story has been corrected from its original print version.