The City Is on a Collision Course With Pot Delivery Services

 In Press

For the past couple of years, the city of San Diego has been stringently regulating medical marijuana dispensaries. The difficulty in opening a legal dispensary opened the door for another marijuana-related service: deliveries.

Delivery services bring cannabis products straight to a consumer’s front door, rather than provide counter service at a storefront dispensary.

There are dozens of delivery services operating with hardly any regulation – a listing of many can be found on sites like Weedmaps – while only 15 dispensaries have legal permits in the city, many of which aren’t even open yet.

Council members may shut that down Tuesday when they evaluate a set of proposals on medical and recreational marijuana regulation.

One part of the proposal before the Council would tie delivery services to existing legal dispensaries. In other words, you could only deliver marijuana to people if you have an existing, permitted dispensary.

Current dispensary permit owners are generally in favor of that, but have concerns over the provision’s vagueness.

For example, it’s unclear whether the dispensary needs to provide delivery services itself or if it would be allowed to contract out to independent delivery services. There is also uncertainty over how the city would handle delivery services that are based in other cities, but deliver to consumers in the city of San Diego.

Delivery operators aren’t happy since the proposal might limit their opportunities and many would have to shutter their businesses. Some accept the likelihood they will face more regulation, but think they should be allowed to operate independently of dispensaries.

The medical marijuana dispensaries prefer that deliveries come from them, said Cynara Velazquez, political director of the Association of Cannabis Professionals in San Diego.

Velazquez said she is neutral on the proposal and presented the two sides she hears on the issue.

“That would be good in some ways because it would allow for a lot of oversight from the city and a lot of transparency,” Velazquez said. But the downside, she said, is that there is a limited number of permitted dispensaries. “The delivery services say, ‘Hey, we’re just the little guys. We’re helping people in areas that maybe you don’t reach,’” Velazquez said. “So there’s a divide.”

Delivery services for medical marijuana dispensaries are allowed under state medical marijuana law – though the state will not issue licenses for any marijuana-related businesses, medical or not, until 2018.

Will Senn, co-founder of the United Medical Marijuana Coalition and the owner of Urbn Leaf, a permitted medical marijuana facility that is expected to open in Linda Vista next week, supports the policy.

“It’s currently the wild, wild west and it needs to be reined in,” Senn said.

Senn argues that the proposal is essential for public safety because it would facilitate the regulation of deliveries for the city. The city can also benefit from tax revenue, he said.

Even if it passes, though, the policy will be hard to enforce.

In 2014, before medical marijuana legislation passed at the state level, Deputy City Attorney Shannon Thomas explained to City Council members that it’s not clear they can stop a delivery service.

“We’d basically be criminalizing what the state has already said an individual may have a defense for,” Thomas said at the public hearing. “Lastly, just regulating deliveries generally, the city does not regulate any other types of deliveries.”

In 2015, California passed a series of bills to permit medical marijuana, the Medical Marijuana Regulation and Safety Act. The state won’t start licensing medical marijuana businesses under those laws until 2018, but local jurisdictions were allowed to enact their own ordinances, regulations and permitting processes in the meantime.

Delivery services are allowed under that state law, as long as municipalities don’t choose to ban them.

Los Angeles and San Jose, for example, have banned deliveries.

San Diego hasn’t explicitly prohibited them, but nor will it give them business licenses, leaving them in a gray area. Within that framework there are a variety of delivery operators – some have tried to follow the rules available to them, some haven’t at all.

Senn also said he believes that the policy will be the only way the city can comply with state marijuana laws that go into full effect in January 2018.

He points specifically to one of those state medical marijuana bills.

“Deliveries, as defined in this chapter, can only be made by a dispensary and in a city, county, or city and county that does not explicitly prohibit it by local ordinance,” reads the law’s section on deliveries.

Proposition 64, the statewide measure that passed in November legalizing recreational marijuana, seems to have similar restrictions on recreational marijuana deliveries. Before the election, CalMatters dug into how the initiative would impact deliveries.

A spokesman for the campaign to pass Proposition 64 spokesman told CalMatters that the measure’s authors intended deliveries to be restrictive and not on-demand, and a judge seemed to agree with that interpretation of the ballot language.

Craigsweed.com, an online community where people can find and post classified ads related to cannabis and find storefronts, doctors and delivery services, wrote to the city’s planning commission before it heard the proposal in December, taking issue with the proposed independent delivery services ban.

“Without more options for delivery services, seriously ill patients that cannot travel to a dispensary will go without medication that may be needed to save their life or may pay considerably more because of the monopoly of the market by conditional use permit holders,” the e-mail read. “There should be a path for licensing outside delivery services instead of banning them entirely.”

The city’s planning commission recommended in December that the Council consider a separate ordinance for delivery services, which would mean the issue wouldn’t be hashed out Tuesday, but revisited later.

Elizabeth Wilhelm, vice president of Timely Holistic Care Delivery Service, which delivers to medical marijuana patients, said she’s not opposed to the city regulating delivery services, but she doesn’t think exclusively giving delivery rights to existing dispensaries is fair or sufficient for the demand for delivery services in the city.

“The reality is even if all the dispensary licenses are used, they won’t be able to meet the demand of patients in this city,” Wilhelm said.

Wilhelm said she has tried to keep her business on the up and up legally. She has a seller’s permit from the state’s Board of Equalization, has incorporated her delivery service as a nonprofit corporation and pays taxes to the state.

“I feel like we have done everything within the structure the way that it is currently set up and to take that away just seems completely wrong,” Wilhelm said. “I feel like I provide a service that is, in our view, vital. I have patients who are in their 80s and 90s and could never leave home to get the medication that they need.”

Wilhelm said if the City Council approves this part of the proposal, she’ll likely have to shutter her business, unless it turns out that the dispensaries can and are willing to contract out to independent delivery operators.

“I am more than willing to go through whatever process to become licensed,” she said. “I don’t like feeling like I’m working in the gray. I would love if I could go down to the city and apply for my business license, but they just won’t give us one.”

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