Santa Rosa invites marijuana businesses to step out of the shadows
Larry Schaeffer has grown marijuana in Sonoma County for more than a decade.
His Cherry Kola Farms outside Penngrove supplies award-winning strains of pungent pot to one of Sonoma County's largest medical cannabis collectives, as well as discerning dispensaries around the state.
But after years of operating in a quasi-legal status as a nonprofit collective, Schaeffer is ready to go legit. He wants to be an above-board business, in an approved location with proper permits, and pay taxes like any other legitimate enterprise.
And he plans to do it in Santa Rosa.
'Santa Rosa wants this industry here,' Schaeffer said. 'I think this is probably going to be the New Age Amsterdam.'
Perhaps more than any other city in Sonoma County, Santa Rosa has signaled its willingness to welcome the cannabis industry in from the shadows.
Back in 2005, it was the first city in the county to permit medical marijuana dispensaries. Two years ago, it lifted a cap that had limited such operations to 500 patients.
Then this year, prompted by new state licensing rules, it opened its doors further. In February it authorized, with proper permits, commercial cannabis cultivation in industrial areas and support services — like testing, manufacturing and distribution operations — in industrial and office zones.
Now, with voters poised to decide in November whether California will become the fifth state in the nation to legalize recreational use of marijuana, the city is accelerating its efforts to write the rulebook medical marijuana businesses will have to live by. The rules could serve as a template for restrictions on future enterprises producing and selling recreational marijuana.
City officials say they see significant economic development opportunities and public safety benefits to bringing an existing unregulated medical cannabis industry into compliance with reasonable local rules.
'We're the fifth-largest city in the Bay Area, located between a major market and port and the supply,' said Councilwoman Julie Combs. 'I think that puts us in an excellent position to get the most public benefit possible from an industry that is here now.'
Fertile ground for industry
To many, Santa Rosa, with its permissive political climate, large educated workforce, central location and diverse stock of commercial real estate, is fertile ground for an industry ripe for rapid growth.
'There's a wave coming, and they are going to catch it,' Schaeffer predicted.
Others in the North Coast pot industry, however, remain wary. They're worried about complying with new regulations and spooked by a recent high-profile raid of a large Santa Rosa-based cannabis extraction operation. They say that for all its political posturing, the city is sending mixed messages about whether it truly wants the industry to set up shop here.
The June 15 multi-agency raid of Santa Rosa-based CBD Guild, a sophisticated manufacturer and distributor of cannabis-infused sprays and oils, sent shock waves through the industry at the precise time the city was urging the industry to submit to regulation.
'I can't bring these members forward if they are afraid of a raid every single time something might go wrong,' Tawnie Logan, executive director of the Sonoma County Growers Alliance, told the City Council following the raid. Her organization represents more than 400 members connected to the county's cannabis industry, including operators, supply companies and attorneys.
Logan pleaded with the council to work with her organization to establish a 'safe harbor' program that would protect existing marijuana operators from law enforcement action once they approach city planning officials to comply with the long list of zoning, building, fire and other regulations.
That makes a lot of sense to Combs, who sharply critiqued the city's Police Department in the wake of the raid. In an analogy drawn from the aftermath of World War II, she likened them to 'Japanese soldiers who are still on an island and fighting a battle that may have ended.'
She openly questioned why such a 'massive show of force' involving more than 100 officers from multiple agencies was needed for what she considered a mere hazardous material complaint at an existing business.
While she acknowledges that she may not have all the facts about what is an ongoing criminal investigation, Combs said she believes it has sent the wrong message to the industry at a delicate time in its transition.
'I'm concerned about the damage this action has done to our city's reputation with an emerging cannabis industry,' she said.
City Manager Sean McGlynn said the city and the industry are engaged in a 'mutual learning experience' about how to best go about something few other cities in the state have been bold enough to attempt.
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