San Diego to legalize local supply chain for cannabis operations

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San Diego is now one of the few cities in California to have a fully regulated supply chain for cannabis.

The City Council members voted on Tuesday on a proposal, that was approved in a 6-3 vote, aiming to legalize local cultivation, manufacturing and testing of cannabis and related byproducts like edibles.

Supporters said the proposal would boost the local economy, increase city revenue through steep taxes on the drug, and improve the quality and safety of local cannabis.

A local supply chain would decrease prices by eliminating transportation costs, and prevent unregulated operations with the black market. Lower prices also play a big role in persuading customers to buy cannabis at local dispensaries, instead of referring to the black market.

“I believe it’s our obligation as the City Council to have responsible regulation of all parts of the supply chain,” Councilwoman Barbara Bry said.

On the other side, opponents said city officials did not gather enough public input in crafting the new proposal, and a local cultivation would increase crime in San Diego. Police Chief Shelley Zimmerman said she anticipates a significant increase in calls for service at cultivation and manufacturing sites, where fires and explosions are common.

“My focus is on implementing the will of the voters in the absolute safest way possible, while minimizing impacts to our communities,” Councilman Mark Kersey, a Republican who joined the council’s five Democrats in support of the legislation, said.

To avoid conflict with state cannabis laws, the council required cannabis production businesses to have “odor-absorbing ventilation and exhaust systems,” as well, to prevent people passing by cannabis farms or manufacturing operations from being overwhelmed by the strong odor of the drug.

San Diego legalized sales of medical cannabis at city-approved and regulated dispensaries in 2014 and agreed earlier this year to allow the dispensaries to expand social cannabis sales by Jan. 1.

However, unlike San Diego’s regulations, many cities in the Bay Area will not be able to start issuing permits for social sales of cannabis to Californians age 21 and over on Jan. 1. City officials are still waiting on the state to issue its final regulations.

“There’s a substantial amount of work that has to be done, you can’t phone it in at the end of December,” Sean Donohue, a former board member of the Oakland cannabis board and a cannabis industry consultant, said.

San Francisco will not be issuing social cannabis sales permits, even though it has more than 30 medical cannabis dispensaries. In San Jose, officials are still monitoring state regulations and working on newer ones. Other cities like Fremont, Pleasanton and San Mateo will not allow for sales yet.

“We want to take a wait-and-see attitude and see how this rolls out in other areas and what kinds of problems other jurisdictions find,” Don Horsley, San Mateo County Supervisor, said.