Richmond limits number of pot clubs to
three, puts tax measure on November ballot
Richmond reversed course Tuesday night, capping the number
of medical marijuana dispensaries it will allow at three and
reviving tougher regulations it nixed a week ago.
Pot clubs will be restricted to regional commercial districts,
which are major shopping hubs such as Hilltop Mall. The police
chief will review applications and grant the permits after
holding public hearings.
The City Council gave unanimous initial approval to the new
regulations Tuesday night. The ordinance will return for final
approval Sept. 21, yielding to requests from residents for
more time to digest the plan and give feedback.
The council also voted to place a measure on the November
ballot for a 5 percent tax on gross sales receipts of marijuana,
regardless of whether it's medicinal or recreational use.
The new regulations on dispensaries are a dramatic change
from what the council narrowly approved last week, when officials
set no limit on the number of pot clubs and allowed them to
be in major and smaller commercial areas. Critics feared that
would turn Richmond into the region's marijuana headquarters.
Mayor Gayle McLaughlin, who was in the majority vote last week,
said she changed her mind after the police chief advised that
it is better to have a tighter ordinance now that can be loosened
later after review, instead of the other way around.
"This is something new and it may need tweaking as we move
along," McLaughlin said.
Other big changes include adding parks
and community centers to the list of sensitive areas from which
a pot club must be at least 500 feet. Patients also cannot purchase
more than one ounce a day.
Other provisions will stay the same. Dispensaries must be
nonprofit collectives managed by people who pass criminal background
checks. They must be least 1,500 feet from high schools and
500 feet from other schools or day care centers.
Eight confirmed dispensaries have opened in Richmond, most
within the past year. Officials started seeking court injunctions
in March to shut them down, arguing in court documents that
they were not a permitted use when they opened. One site closed
this month after the city won a court injunction; hearings
on the others are pending. One club was evicted by its landlord
after the city sent a letter warning of the non-permitted use.
None of these clubs would be grandfathered in under the new
law. And because the ordinance restricts collectives to regional
commercial areas, about half the existing clubs would not qualify
at their current locations. Officials plan to issue a request
for qualifications, essentially allowing people to apply and
compete for the three permits. The criteria for evaluating
the applications has not been crafted yet.
The City Council plans to meet in closed session next week
to discuss the pending lawsuits against the existing clubs.
Some council members want to let the dispensaries stay open
until the city picks the three that will receive permits, so
patients can have uninterrupted access to marijuana.
Richmond now joins a flurry of cities in asking voters whether
to tax pot clubs. Pot clubs require more attention from police
and fire, and should be taxed more heavily than other businesses,
said Councilman Tom Butt who proposed the ballot measure for
the council's consideration. And if pot clubs are going to
operate here, the city might as well collect sales tax from
them, he said.
How much revenue the measure would generate depends on how
brisk sales are. Marijuana is a multimillion dollar business
-- Berkeley's three dispensaries reported $18.5 million in
gross receipts this year to the city, which levies an 0.12
percent tax -- meaning revenue for Richmond could be substantial.
Taxing dispensaries is becoming more common. Oakland levies
a 1.8 percent tax on medical pot clubs now, and will ask voters
this fall whether to increase it to 5 percent on medical dispensaries
and 5 percent on cultivation activities. The tax proposal is
10 percent on nonmedical uses, if California voters pass the
measure to legalize recreational marijuana use in November.
Berkeley will pose a similar question to its voters. Its November
ballot measure proposes a 2.5 percent tax on medical pot clubs,
and up to 10 percent on recreational ones if the statewide
Richmond is studying whether to license and tax farms that
cultivate medical marijuana for local dispensaries. Oakland
voted Tuesday morning to allow up to four farming permits limited
to industrial areas in West and East Oakland.
Katherine Tam covers Richmond. Follow her at Twitter.com/katherinetam.