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News Nuggets – May 2018




Bay Area

Vallejo Planning Commission Approves Manufacturing, Cultivation and Distribution Facilities

The Vallejo Planning Commission approved an ordinance amending Title 16 of Vallejo Municipal Code on April 16. The types of businesses allowed will be business-to-business manufacturing, cultivation and distribution facilities. Locations will be allowed in three industrial zones throughout the city. “Our enforcement of deliveries just got a little bit more sophisticated and detailed, because we have to figure out a few more things about them,” said Chief Assistant City Attorney Donna Mooney. Last February, the Vallejo City Council approved an emergency ordinance that allows the city’s 11 medical cannabis dispensaries to also sell recreational cannabis. About half of the city’s existing dispensaries are located in the same zones where manufacturing, cultivation and distribution facilities will be allowed. The city council is expected to vote on the amendments this month, and the final approval is expected in June.


Redwood City Approves Cannabis Nurseries and Delivery

Redwood City will soon allow cannabis nurseries selling starter plants and delivery companies without storefronts. On April 9, the Redwood City Council voted 5-2 to amend Zoning Ordinance Article 59. Division 7 was also added to Redwood City’s Municipal Code Chapter 32, Article V. “We’re in uncharted territory, and in a lot of ways we’re pioneering a new way of doing things,” Mayor Ian Bain said. “Even though other cities have done some things ahead of us and made some mistakes—and we’re attempting to learn from those—we’re also leading the way in some respects.” Amendments to the Article 59 won’t take place until some aspects have been clarified in a second reading. The city is currently in phase 3 of four planned phases that will regulate local cannabis businesses. In the fourth and final phase, city council will consider allowing retail storefronts in 2019.


Towns of Naturita and Berthoud Legalize Recreational Cannabis

Recently, as cannabis legalization becomes normalized across the nation, more small towns in Colorado are opting to embrace recreational cannabis. The town of Naturita is one of the most recent to approve a municipal sales tax on recreational cannabis for sale. Berthoud, a small town in northern Colorado, also voted to allow stores to sell recreational cannabis. The town is also working out regulations for recreational businesses to abide by. However, while many locations have approved recreational cannabis, the Colorado Municipal League believes the surge will continue to slow down. “At this point, we are seeing a lot fewer elections related to local opt-out or taxation,” explained Kevin Bommer, deputy director of the Colorado Municipal League, regarding the recent surge in legalization. “We believe that the dust has mostly settled for a while and those that are interested in allowing retail have done so, while those that are not have opted out.”


Dispensary Testing Room Bill Passes House

Dispensaries in Denver may offer all kinds of cannabis products, but beyond smelling flower before buying, consumers have no way to sample the products they are interested in before they make their purchases. House Bill 1258, also referred to as “Marijuana Accessory Consumption Establishments,” would allow consumers to legally test products in stores. “This bill helps solve the problem of where people can safely consume their cannabis,” Rep. Jonathan Singer, one of the backers of the bill, told CULTURE. “We tell tourists to come to our state and purchase our cannabis. Then we tell them it’s illegal to consume in their hotel room, parks, sidewalks, restaurants, bars and especially our ski slopes, since those are on federal land. Finally, people will be able to purchase and consume small amounts of marijuana with trained staff present.” The bill has been cleared in the Colorado House and is being reviewed by the Colorado Senate, as of late-April.

Los Angeles

West Covina Will Allow Cultivation and Lab Testing Facilities

The West Covina City Council voted 3-2 on April 17 to approve Code Amendment No. 18-01, allowing for cannabis cultivation and laboratory testing businesses in the city. “It is recommended that the City Council provide direction to staff in processing a Code Amendment for the commercial cultivation of marijuana in a manufacturing zone to allow the Planning Commission to consider changes to the Licenses and Business Regulations (Chapter 14) section of the Municipal Code, as well as changes to Zoning (Chapter 26),” the meeting agenda read. For some of the West Covina leadership, the issue is personal. Mayor Pro Tem Lloyd Johnson has admitted in the past to consuming medical cannabis while he was battling cancer. Mayor Mike Spence reluctantly agreed that allowing certain types of businesses is the right way to go, as neighboring communities have done so.


Kalamazoo Allows Five Cannabis Facility Types

The Kalamazoo City Commission unanimously voted on April 2 to approve five types of medical cannabis facilities. License types will include Grower, Processor, Secure Transporter, Safety Compliance Facility and Provisioning Center. “By adopting these ordinances, the City would update the Home Occupation provisions of the Zoning Code to bring them in line with the current provisions of the Michigan Medical Marihuana Act addressing the rights and responsibilities of registered caregivers; authorize the five types of medical marihuana facilities to operate within the City; and define the zoning districts and separation requirements impacting where medical marihuana commercial operations may be locate with the City,” reads the commission report. While the ordinance places no cap on facilities, zoning restrictions will function as a market cap. Some Kalamazoo residents hope that medical cannabis will help deter the city’s opioid problem and create competition for the local illicit market.


Ann Arbor Enacts Moratorium on New Dispensaries

Ann Arbor residents were alarmed by the sheer number of recent dispensary requests, which compelled city officials to consider a temporary moratorium on new facilities. On April 16, the Ann Arbor City Council voted unanimously in favor of imposing a 60-day moratorium on new permits in the city. Dispensaries that already have a zoning approval may be exempt. “City Council would like to consider limiting the number of medical marijuana provisioning centers and other medical marijuana facilities in order to determine the effect over time of having medical marijuana facilities in the community, given the significant amount of interest in opening these facilities within the city,” the city council’s resolution read. The moratorium was sponsored by Mayor Christopher Taylor and Council Members Zachary Ackerman, Graydon Krapohl, Julie Grand and Jane Lumm. An ordinance amendment, which would limit the number of permits available, will be presented to the city council on May 7, if the resolution is approved as worded.


Deschutes County Hires Two Cannabis Enforcement Officers

Deschutes County officials recently approved the hiring of two cannabis enforcement officers in order to better control illegal cannabis sales. Although temporary, the officers will join the Central Oregon Drug Enforcement team (also known as C.O.D.E.) in enforcing cannabis laws and regulations. The Deschutes County Board of County Commissioners made the decision on April 11 in response to previous complaints from both the Deschutes County Sheriff and the local district attorney about issues recognizing the differences between legal and illegal cannabis operations. The board also discussed temporarily halting applications to produce and cultivate cannabis for up to 60 days. According to an email from Deschutes County Official Nick Lelack to the Associated Press, the reason behind this decision is that it would allow the new cannabis enforcement staff to focus on the already present “cases, complaints and compliance.”


Josephine County Sues Oregon over Cannabis Laws

A lawsuit launched by Josephine County was filed against the state of Oregon on April 3 in Medford’s U.S. District Court, in an attempt to invalidate the recreational and medical cannabis laws that Oregon voters approved. The plaintiffs are asking lawmakers to nullify Ballot Measure 67 and Ballot Measure 91. It’s the latest move in a power struggle over who controls cannabis regulations in the county. “Defendant State of Oregon asserts that established marijuana producers possess a right to continue growing marijuana up to limits determined by the state in rural residential zones, despite any regulations and limitations of Josephine County,” the lawsuit reads. Josephine County is one of Oregon’s largest cannabis-producing counties. It represents the opposing views on cannabis in urban and rural areas in Oregon. The lawsuit could have wider implications in other states that have legalized recreational or medical cannabis.

San Diego

Commissioner Calls for Insurers to Cover the Cannabis Industry

Insurance Commissioner Dave Jones sent out a formal letter on April 20 urging insurance companies to consider covering licensed and legal cannabis businesses in California. “The mission of the California Department of Insurance is ‘Insurance Protection for All Californians.’ We work with the insurance industry to promote a healthy insurance market that offers insurance products to meet the ever-changing needs of Californians and California businesses,” said Jones. “This includes making insurance available to the state licensed legal cannabis businesses in California.” Jones pointed out how much potential profit is involved when it comes to cannabis. Currently, at least 24 surplus line insurers and one admitted insurer are now offering insurance for various risks that affect cannabis businesses in California. Despite the lack of reported instances of federal prosecution, most insurers still refuse to do business with cannabis businesses.


Oceanside Approves Cultivation, Manufacturing and Distribution Facilities

On April 11, the Oceanside City Council gave the final approval to the cultivation, manufacturing and distribution of medical cannabis. Due to a compromise, dispensaries were deleted from the ordinance. The Oceanside Comprehensive Zoning Ordinance and Chapter 7 Article XIII of the Oceanside City Code were amended to include commercial medical cannabis facilities. “People asked us to shine a light on this business and keep it honest,” Councilmember Chuck Lowery said after the approval. Lowery and Councilmember Jerry Kern served on the ad hoc committee that prepared the ordinance, but they both supported the compromise despite losing out on including dispensaries. A workshop will take place on July 20 to review the ordinance and consider adding dispensaries again. Local cultivators had mixed feelings because of limits on greenhouses and a 1,000-foot buffer in between cannabis facilities. The ordinance goes into effect on May 11, 30 days after the final approval.


Study Suggests that Crime Decreased in Washington After Legalization

A report titled “Crime and the legalization of recreational marijuana” was published in the Journal of Economic Behavior and Organization in late February. The study examined data from 2013-2014 when recreational cannabis was legal in Washington, but still prohibited in Oregon. Data regarding rates of reported crime, drug and alcohol use were compared. Lead researcher Giulio Zanella explained to CULTURE that “all counties in Washington and Oregon are included, but the statistical technique employed provides an estimate at the Washington-Oregon border (all bordering counties), where the comparison is a better one.” The study found that following recreational cannabis legalization, there was “a significant reduction in rapes and property crimes on the Washington side of the border in 2013-14, relative to the Oregon side, and relative to the pre-legalization years 2010-12.” The study surmises “the legalization of recreational cannabis leads to the emergence of a legal market, which offers more safety and more reliable product quality via legitimate business. This likely drives illegal sellers out of the market.”


Report Identifies Potential Effects of Canadian Cannabis Legalization on Washington

Legal recreational cannabis is projected to become available in Canada sometime in August. A recent report, titled “Cannabis in Cascadia: Impacts of Legalization in the Region” was released by the Border Policy Research Institute at Western Washington University. Researchers attempt to assess the effect cannabis legalization in Canada will have on Washington State. Director of the Border Policy Research Institute, Laurie Trautman, PhD, spoke with CULTURE about the report. “Once Canada legalizes cannabis, you’re going to have a whole region, from California all the way up to Alaska, where cannabis is legal. The border kind of cuts it right in the middle. And the border being federal jurisdiction is going to be a place where it will still be illegal to possess cannabis,” Trautman explained. “So even though it will be legal in Canada and Washington, it will still be illegal to transport it across the border, and I think there’s a lot of confusion about that and a lot of misconceptions.”


Israel-based Company to Provide Cannabis to Canada

Israel-based company, Together, has entered into an agreement to sell 50 metric tons of dried cannabis to an unnamed Canadian company. The Canadian company is expected to purchase 50 metric tons of dried cannabis tops from Together’s subsidiary, Globus Pharma, each year. After processing, these tops will amount to approximately five metric tons of cannabis oil. “We are continuing to work towards setting up an infrastructure of our business activities in order to realize the major knowhow and experience that we have in growing medical cannabis,” stated Nissim Bracha, founding partner of Globus Pharma. “This is through producing and selling agricultural produce and its products in Israel and overseas, and with the intention of supplying medical cannabis products to the rapidly growing world market that is worth tens of billions of dollars annually.” A company expert estimated that sales will translate to $3.17 to $4.70 per gram of cannabis tops.

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