Santa Clarans may not see the budding commercial cannabis industry bloom in their city any time soon.
The Santa Clara City Council will discuss Tuesday evening a permanent ban on all cannabis-related activity in the Mission City. If approved, staff will start developing an ordinance, effectively putting any plans for marijuana sales inside city limits up in smoke.
The scheduled vote comes after multiple extensions of a moratorium of cannabis sales, initially intended to allow the city time to develop regulations and legislation. Santa Clara Mayor Lisa Gillmor said that councilmembers’ opinions have changed and the voting body is down to six seats after Councilmember Patricia Mahan’s recent resignation.
“Things have changed for us in terms of what revenue we thought we might be achieving from cannabis sales, but most importantly, our council’s changed,” Gillmor told San José Spotlight on Monday. “I think some of the positions on cannabis sales may have changed in the last election.”
The city’s recommendation on banning marijuana sales undermines the will of Santa Clara voters. Measure M was approved with more than 75 percent of the vote in 2018, which authorized a 10 percent tax on recreational cannabis sales and a $25-per-square-foot tax on cultivation space. City officials said then that measure would generate about $2.2 million annually, but revenue projections have since decreased.
Gillmor said she heard the voter’s thoughts “loud and clear,” but the city still may enact a permanent ban. According to city spokeswoman Lenka Wright, the recommendation stems from concerns of a lack of staff resources to simultaneously oversee regulation and enhance revenue options.
“There’s probably going to be a little bit of backlash, but we said we are going to explore different ways of doing it,” Gillmor said.
Sean Kali-rai, a lobbyist and founder of Silicon Valley Cannabis Alliance, said a ban would not only ignore that Measure M vote, but would signify a shift away from years of work consultants and city staff put into researching policies to regulate the legalized market.
“Unfortunately, there was a lot of time, resources, effort and energy spent on this,” Kali-rai said, adding that the City Council’s makeup of more conservative members has contributed to the potential ban. “Now to have it all come down to a moratorium, it’s absolutely disappointing.”
Kali-rai said he doesn’t buy the city’s claim that there’s not enough data to support allowing marijuana businesses. He also said that a ban would push demand (and subsequent tax revenue) to nearby dispensaries — such as San Jose’s Airfield Supply Company and the recently unionized MedMen, which are both a short commute from the Santa Clara border. In fact, the nation’s 10th-largest city has welcomed the budding industry so much so that after a full year of recreational sales, some cannabis consumers are now concerned taxes are too high on the products they purchase.
San Jose City Hall has reaped the benefits from pot sales, as one estimate tallies the city collected $13 million during the 2017-2018 fiscal year. Additionally, city documents show that the 2018-2019 Adopted Budget for the Marijuana Business Tax totaled $13.5 million, which includes anticipated tax receipts for recreational and medicinal marijuana sales.
A report from the Santa Clara Police Department ahead of Tuesday’s vote says potential impacts of approving commercial cannabis activity include overestimated tax revenues, possession by minors and increased service calls for cannabis use.
Kali-rai said the city hasn’t researched the fallout from banning cannabis and driving sales into the underground market, such as disproportionate incarceration of people of color and lack of safe access to products, especially as black-market products have been linked to the recent increase in vaping-related lung illnesses.
“Whenever you create a prohibition, as was proven by alcohol, illegal forces will step in and they’ll fill the void,” Kali-rai said. “But because (legalizing cannabis sales is) something that they particularly may not like, or their church or their schools may not like, they’re ignoring the voters.”
The Santa Clara City Council is scheduled to meet at 4 p.m. inside the council chamber at City Hall, 1500 Warburton Avenue in Santa Clara.
Contact Katie Lauer at firstname.lastname@example.org or follow @_katielauer on Twitter.