Santa Cruz County Board of Supervisors approved a draft of rules and regulations for growing marijuana for commercial sale at a special meeting on Feb. 5. The proposed ordinances, with several recommendations made by various supervisors, now go to the Planning Commission for review. More public input will be requested on Feb. 28 before being returned to the Board of Supervisors for an additional hearing and final adoption in March.
The proposed County ordinances detail the zoning regulations, the permit requirements and environmental review process for growing cannabis and manufacturing marijuana products in Santa Cruz County. The draft regulations were under development throughout last year, after California voters approved Proposition 64 in 2016 making the cultivation and commercial sale of marijuana legal for recreational use by adults.
The San Lorenzo Valley got a preview of the proposed rules at a community meeting on Feb. 1 in Felton, attended by an estimated 50 people. Community members expressed real concern about the environmental impacts of marijuana grows, including the use of pesticides, rodenticides, increased erosion and increased risk of fire. The ability of the County to enforce the proposed rules, especially in the remote, mountain areas on both sides of the San Lorenzo Valley, was also a significant issue for several participants at the meeting.
“You seem to think you are going to be effective with the environmental protection of our mountain areas,” said Kevin Collins, a Felton resident, to the county planning staff at the Felton meeting, “But, from living here as long as I have, I know otherwise.”
A few of those working in the now legal marijuana industry were involved in the drafting of the local rules and regulations, and generally support the proposed ordinances, including the “canopy limits” for various sized lots in different zoning districts, and meeting the environmental protection requirements to qualify for a permit.
“We all have an interest in not poisoning our mountains,” said Pat Malo, executive director of a coalition of cannabis businesses called Green Trade Santa Cruz. “Without a doubt, the most significant impacts will come from unregulated, unlicensed grows. I appreciate that the community is terrified of unregulated marijuana grows, almost as much as it is afraid of regulated cannabis cultivation.”
According to a Craig Reinarman, a retired sociology professor from UCSC, public policy based on worst case scenarios usually makes for bad public policy.
“You don’t want so many restrictions that it encourages the black market,” Reinarman said.
Several speakers at both the local meeting in Felton and the Board of Supervisor’s meeting strongly recommended the County complete the draft Environmental Impact Report (EIR) on the proposed rules. In June, the State relieved county governments of the legal responsibility to complete and certify a “programmatic” EIR on the proposed rules for cultivation, as long as the local rules require site-specific environmental review of each applicant for a permit, which is the case with the draft ordinances.
Well before last June, the county had begun a “programmatic” EIR, conducted a good deal of research and solicited more than 200 comments on the proposed regulations in a draft EIR. The county is now under no legal obligation to complete the EIR certification process, although some citizens recommend it should do so. Kathy Molloy Previsich, County Planning Director, said the county went further than necessary with the EIR process, and is expecting to make public the county’s responses to the 200 comments on the draft EIR.
State law requires that each step in the supply chain between cultivators, manufacturers of marijuana products and dispensaries and retail outlets be licensed by the state, as well as have local approvals and permits. The 12 medical marijuana dispensaries in the unincorporated areas of the county are required to buy their inventory only from licensed distributors, who in turn can only buy from licensed cultivators or manufacturers. These licenses and permits are currently issued on a temporary basis until the county ordinances are adopted.
A study conducted by U.C. Davis estimated the legal sale of medical marijuana in California brought in about $2 billion last year, and the illegal pot market was estimated to be almost three times larger- in the neighborhood of $5.7 billion. This study projected the size of the legal recreational marijuana market in California would be about $5 billion, however, the study projected roughly 30 per cent of the market is likely to remain illegal, unlicensed and unregulated.
The marijuana market in California is expected to be the largest in nation, and is expected to bring in about a $1 billion in tax revenue, according to the State Department of Finance, with a 15 per cent State excise tax paid by cultivators and distributers, plus the regular 8.5 per cent sales tax paid at point of sale.
Santa Cruz was one of the leaders in the state establishing local guidelines for medical marijuana, especially by pioneering a “compassionate access model” for marijuana as medicine to reach those patients who could not afford the price. Various dispensaries set up “sliding scale” prices and developed methods to subsidize access to those patients who could not afford their medicine.
According to Valerie Leveroni Corral, Director of the Wo/Men’s Alliance for Medical Marijuana, the legalization of marijuana for recreational use and the 15 per cent excise tax collected by the state has “priced out many low-income patients from receiving their medicine.”
Corral asked that the Board of Supervisors to consider some mechanism- a small business tax credit, some sort of enticement program or some way to subsidize marijuana as medicine for those low-income patients who can’t afford the current market price of marijuana.
