Santa Rosa seeks to regulate commercial pot cultivation

Santa Rosa took another step toward becoming the center of the North Coast's commercial medical marijuana industry Tuesday when the City Council pushed forward a plan to regulate cultivation instead of banning it.

Following the advice of its subcommittee, the council rejected an outright ban and instead approved a plan to temporarily allow large-scale marijuana cultivation in at least three nonresidential zoning districts with special permits approved by the Planning Commission.

The 7-0 vote was wildly applauded by a chamber filled with people who said they were grateful for the chance to conduct their underground business legally.

Councilwoman Julie Combs said it isn't often that an industry steps forward and asks to be taxed, regulated and given land-use restrictions.

“I think Santa Rosa is remarkably well placed in our North Bay area, as well as for other reasons, to be involved in moving this industry forward,” Combs said to whoops and hollers of approval.

City Attorney Caroline Fowler initially had recommended the city ban commercial marijuana growing in advance of a fast-approaching March 1 deadline. Cities such as Santa Rosa that didn't have regulations in place by then risked losing their right to regulate the activity under a new state law meant to comprehensively regulate the industry.

That deadline, which Assemblyman Jim Wood, D-Healdsburg, has said was inserted in error, may yet go away. A bill rescinding it could be signed by the governor by the end of the month, said Ed Sheffield, Wood's district representative.

But until that happens, the city, like others around the state, was obliged to act or risk losing the right to say where or how major cultivation businesses could operate in the city.

Councilmembers praised city staff for working swiftly to handle what amounted to a last-minute bureaucratic curveball in a way that met the deadline without roiling an existing - albeit shadowy - industry unnecessarily.

An ‘elegant solution'

Erin Carlstrom, a member of the council's marijuana subcommittee and an attorney who works for a local firm specializing in marijuana law, praised city staff for coming up with a “really elegant solution.”

She noted that she is aware of other jurisdictions that are charging as much as $50,000 for a permit and imposing special taxes on marijuana.

“I am excited that our staff and members of the community have allowed us to begin regulating an unregulated industry,” Carlstrom said.

City Attorney Caroline Fowler had issued an opinion stating that Carlstrom's work for the Rogoway Law Group did not represent a conflict of interest, Carlstrom said. She said part of her job involves corporate compliance for the medical marijuana industry, work she said does not conflict with her council service because it involves a policy decision not directed at any particular industry member.

Several grower representatives framed the issue in terms of avoiding disruption to an industry with a growing economic impact on the region.

Robert Jacob, executive director of Peace in Medicine, noted the industry was rivaled only by grapes as the largest cash crop in the county. He said a ban would affect his business, which employs 250 people, his members, which number 40,000 patients, and would make “otherwise undocumented small business illegal business due to state ambiguity.”

“This is truly affecting your everyday citizens and your middle class,” said Jacob, a member of the Sebastopol City Council.

Others drew parallels between a proposed ban and Prohibition.

“There isn't any black market in chardonnay, nor is there in Jack Daniels,” winemaker Ted Simpkins said. “All we've got to do is look at the law.”

As currently proposed, the temporary regulations would allow commercial cultivation only in general commercial, light industrial or general industrial zoning districts with a special permit.

That permit would only be granted after notification of the public and a hearing before the Planning Commission.

Commercial real estate broker Dino D'Argenzio urged the council to make the process even easier. He suggested commercial cultivation be approved in such areas with no more than a business license. He said there were “a lot of people looking” at properties and allowing the uses outright would remove some uncertainty.

“I think it would save a lot of people a lot of hassle and money and time,” D'Argenzio said.

$10,000 price tag

City officials said such permits cost $10,000 and can take several months to issue, depending on whether they are appealed.

D'Argenzio also suggested the city expand the types of zoning districts where cultivation would be allowed beyond the three, proposing to include business parks, as well.

The council decided to keep the permit process in place, but agreed to have staff explore whether other districts would be appropriate. The issue now goes to the Planning Commission for review and must return to the council for approval on an urgency basis to take effect before March 1.

The regulations will not apply to personal cultivation, which is exempt under state law.

You can reach Staff Writer Kevin McCallum at 521-5207 or kevin.mccallum@pressdemocrat.com. On Twitter @srcitybeat.