Jars of marijuana are on display at the High Times Cannabis Cup in San Bernardino. Richard Vogel AP
Jars of marijuana are on display at the High Times Cannabis Cup in San Bernardino. Richard Vogel AP

Editorials

Will bad actors have a ‘monopoly’ on Sacramento’s legal weed industry?

By the Editorial Board

November 30, 2017 04:02 PM

UPDATED November 30, 2017 04:19 PM

Sacramento City Councilman Larry Carr was onto something Tuesday when, in the middle of a heated debate over an ordinance allowing sales of recreational marijuana, he posed a question to the city’s pot czar, Joe Devlin.

“The 30 dispensaries that we’ve already licensed,” he said. “Why does it make sense for us to continue to provide them with a monopoly?”

Carr never got a good answer to his question, but reluctantly agreed to drop it until next year.

The City Council proceeded to enact an ordinance that, in some ways, would create that very monopoly.

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Owners of Sacramento’s 30 existing brick-and-mortar medical marijuana dispensaries are now allowed to apply for licenses to become regular cannabis stores. But only those owners can apply.

Everyone else who wants to get into the city’s retail market once Proposition 64 kicks in on Jan. 1 must to apply for delivery licenses. With it and another licenses from the state Bureau of Cannabis Control, they could bring weed directly to customers, hopefully without getting carjacked and robbed in the process.

The City Council has agreed to revisit its self-imposed cap on brick-and-mortar stores in a few months.

Under normal circumstances, such an ordinance would be mildly troubling. Delivery is the fastest-growing segment of the retail cannabis market, but Sacramento is preventing would-be entrepreneurs from opening a brick-and-mortar shop by grandfathering in existing dispensaries and capping the number at 30.

These aren’t normal circumstances. Marijuana is projected to be a $7 billion industry in California – that is, assuming U.S. Attorney General Jeff Sessions doesn’t launch some war-on-drugs-style federal crackdown on recreational pot.

The new industry’s success – as well as the safety of California’s children, who, no matter the safeguards, will be exposed to the drug in greater numbers – depends on it being run by people who follow the rules. Yet almost all of Sacramento’s 30 existing medical dispensaries have a history of playing fast and loose with city regulations.

A recent report from the Office of the City Auditor found widespread compliance issues. Among the most egregious violations: the under-reporting of tax revenue, allowing people to smoke marijuana on site, selling customers more plants than legally allowed, and failing to produce security footage and financial information when asked.

Sacramento shouldn’t be in the business of rewarding bad behavior, particularly when there are other, presumably rule-following entrepreneurs who want to open pot shops.

After the City Auditor’s report landed with a thud, Devlin said he let the medical dispensary owners “know that there’s a new sheriff in town,” and in response, “there has been a rush to compliance.”

Still, some dispensaries are likely to get hit with fines, he told a member of The Bee’s editorial board. A few others could have their the business licenses suspended or revoked, a lengthy process that could open the door for a new owner of a brick-and-mortar store.

At lot will depend on what Devlin decides is the right punishment for the crime. He’s figuring it out as he goes along because there are no guidelines. Dispensaries will be given time to comply, though, and he is convinced that most of them can “get there eventually.”

Devlin has promised no dispensaries will be granted retail licenses if they remain in violation of city code.

The City Council should hold him to that. Sacramento should not go easy on bad actors just because they’ve been in business for a while.