San Jose Councilmembers Propose Marijuana Club Shutdowns

UPDATED 2:30pm Vice Mayor Madison Nguyen and Councilmembers Rose Herrera, Sam Liccardo and Pete Constant called today for a cap on the number of medical cannabis businesses in San Jose. They proposed shutting down the other marijuana businesses in San Jose. The City’s Rules Committee will hear the proposal tomorrow, March 9. If approved, the ordinance will be sent to the City Council on March 29, 2011.

The proposal will establish a maximum number of 10 medical marijuana collectives permitted to operate within San Jose city limits. In addition, it would create a streamlined application process for collectives to operate legally. Other medical marijuana collectives would be required to stop operations within a specified time period.

“There’s no reason to continue to burden our community, strain our Code Enforcement and Police departments with the current volume and regulatory indecision of the issue. Also, medical marijuana businesses need clarity and certainty in this process,” said Councilmember Sam Liccardo. 

Concurrently, the Public Safety, Finance & Strategic Support Committee is establishing the zoning and land use regulations. Councilmember Pete Constant is the chairman of the committee and co-author of this proposal. Both processes will result in clarity of process and strengthened regulatory authority.

Since Council initially took up the issue of marijuana distribution in San Jose, the number of marijuana dispensaries in San Jose has increased to more than 100, the councilmembers say.

UPDATE: One councilmember who has pushed for taxing medical marijuana dispensaries from the beginning but was not involved in the latest proposal to cap collectives is Pierluigi Oliverio, who suggested a similar strategy, albeit with different numbers, in late 2009 and again in December.

“I certainly would have loved to see this report in 2009, but obviously we were still waiting for the new district attorney and attorney general to issue new guidelines,” Oliverio said, adding that trimming the city down from roughly 100 dispensaries to 10 will be “extremely difficult.”

Dave Hodges, founder of San Jose’s first collective, said the decision to cap dispensaries will likely result in lawsuits and a heavy loss of jobs.

“It’s ridiculous. There’s no way they can cap it to 10,” he said. “What they’re talking about is starting a lawsuit with 90 businesses in San Jose and putting 900 people or more out of work.

“It’s more than just a cap. It’s a cap and then all the others they don’t decide to choose will have to be shut down in 30 to 60 days. That would give the city justification to start a lawsuit. And a cap isn’t even legal according to my lawyers.”

The councilmembers’ proposal can be found here.

The marijuana club shutdowns follow the city’s crackdown on alcohol clubs. Club Wet closed permanently over the weekend after Police Chief Chris Moore invoked an emergency ordinance following a New Year’s Eve fight.

29 Comments

  1. Welcome to the People’s Republic of San Jose!

    What ever happened to free market? What will they do, smoke the product to decide which ones to keep? Or base it on the amount of campaign donations a club can generate—and the lobbyist they choose to hire?

    • Larry,

      With Constant chairing the committee, the decision will be based upon three factors: quality, quantity and freshness of the free donuts offered by dispensaries.

  2. I trust these folks to regulate medical cannabis about as much as I trust them to manage a budget.

    This is ridiculous. The one thing that has worked well in San Jose, they want to screw up.

    After letting people invest in businesses and promotion, they now are late to act. This new industry is generating jobs, leasing real estate in a depressed market and generating new taxes from the cannabis ordinance.

    Can’t they find something else to do? This is “wag the dog” to distract the public from the upcoming police wage battle.

  3. The path the city is on is to start lawsuits against 90 businesses, put more then 900 people out of work, and blow the huge potential revenue stream the voters approved by nearly 80%.

    The concept that “pot clubs” are dangerous is absurd. How many liqueur stores, jewelry shops, and banks got robbed last year? How many people died as a result of those robberies? Should we only have 10 banks in town, or 10 Seven-11’s? ALL the issues related to “pot clubs” in San Jose were caused by one thing, BAD LEGAL ADVICE. If things had been done with the goal to make it easier to open a club in San Jose, we would have this situation 100% under control. Instead we have a huge mess, that’s only getting worse.

    The only people who benefit from making it hard to run a cannabis collective are DRUG DEALERS, NARCOTICS AGENTS, & LAWYERS! NOT the City, it’s people or the medical patients who need this vital medication.

    A cap is not necessary or appropriate and will only serve to further complicate the situation. I agree we need regulations to help these businesses find appropriate locations, and ensure reasonable standards, but that is not what our council members put forward.. A cap & forced closure does nothing to help this situation.

    (to the city of SJ) How much money will it cost to start 90 lawsuits? How much money do you plan on wasting fighting this? How much money could you save/make if we found common ground and worked together?

    • “The concept that “pot clubs” are dangerous is absurd.”

      As I’ve said before we need a 500% tax on “pot clubs” to fund the police needed to protect our stoner denizens.

      If the greedy Pot Club owners care more about profits than the safety of their most vulnerable, clinically ill patrons then they should be shut down.

      “Acting Police Chief Chris Moore said he was “concerned” about the growing crowd of criminals who have targeted private grow houses and medical cannabis clubs in the city.

      “We have had suspects tell us that they came to San Jose to specifically target the marijuana and large amounts of cash they knew they would find here. They know we have so many of these places,” Moore said. “Unless we get a handle on this problem, it will continue to get worse.”

      http://bit.ly/f0szyR

      “Many come from other Bay Area cities where selling crack, methamphetamine or marijuana is more competitive and turf battles can result in violence. By comparison, police have heard dealers say they feel safer doing business here. “

      “Police and merchants say they’ve seen the clinics’ clients selling their pot to the dealers for a profit.”

      http://bit.ly/dJY34k

      PS.  It’s not all gloom.  The drug dealers care enough about the environment to use our lightrail to move around.

  4. Amen, Dave.

    They should call this the Full Employment for Rick Doyle and the City Attorney’s Office Act.

    Now that there are no more night clubs to close down, they have to find something else to do.

    Don’t worry about the loss of dispensary employment because they will be replaced by high paying lawyers’ jobs.

    The only problem with that is who will be paying for it: the taxpayers.

    • Don’t worry Reason, Rick Doyle and his office will have an overflowing plate when they start laying off workers based on a corrupt and flawed performance evaluations system.  The lawsuits are going to roll in.  They will have to have one giant intake box for those and another for the lawsuits put forth by the cannabis clubs.  You watch, they will lay off cops, firefighters, and other city employees and then hire 50 more attorneys.

  5. Limiting the number of medicinal cannabis collectives to 10?! This is disingenuous at best considering many of the Council have already acknowledged that ten is insufficient to service San Jose’s population of 1.5 million.

    Further, the memo is based on specious implication of events inferring a correlation with medicinal cannabis collectives and the inability to distinguish between medicinal cannabis collectives who operate legally under state law from drug dealers.

    In addition, the city now taxes these businesses (yet will not declare them legal despite taking their money)to help offset the deficit… and now want to place cap of 10? Illogical.

    Finally, to cap the number of collectives at ten will ensure that the medicinal cannabis patients will now obtain their medicine on the streets from, guess what, drug dealers.

    Full employment act for the City Attorney’s Office is correct and the same chain of events will occur as happened with Los Angeles when they produced their ordinance. (BTW: San Jose’s proposed operating ordinance, a travesty at best, is sadly, based upon L.A.‘s)

    A cap of 10 absolutely guarantees a plethora of litigation will be filed by the disenfranchised collectives against the city the day after the ordinance is adopted. And just where are they going to get the revenue to handle this legal tsunami?

  6. “The marijuana club shutdowns follow the city’s crackdown on alcohol clubs. Club Wet closed permanently over the weekend after the Police Chief Chris Moore invoked the emergency ordinance following a New Year’s Eve fight. “

    First off, I don’t understand the comparison, the issues are different. Where do you draw the correlation?  Alcohol is regulated and dance clubs have clearly defined rules and regulations. The clubs were closed for numerous public safety issues. These Marijuana “clubs” are not regulated nor have any defined control. The voters approved prop 215 but the state has not set fourth clearly defined regulations as to zoning, taxes, what records must be kept, etc.

    It is refreshing to see city finally step-up and do something about this.

    For those folks complaining about lawsuits, I believe the city of Gilroy has been fighting the battle and is winning.

    Another concern I have is they (Pot clubs) are “non-profits” and not subject to the same tax structure. Are they really paying their fair share?

    • Wasn’t there a stabbing at club wet?  Maybe if you don’t know how to look for escalations, nor know how to diffuse them, you shouldn’t be in business.

      I’ve met so many stupid kids over the years, always the same type.  Big, young, dumb.  “I’VE WORKED AS A BOUNCER BEFORE!  I TOOK BOXING/MMA/KICKBUTT!” 

      I shake my head… I tell them, “Don’t you know the entire club empties out when there’s a fight?”

      “So how do you deal with knuckleheads then?”

      I have a multistep process.

      1.  Always get the parties to the other side of the room.
      2. Try to figure out who does, doesn’t want to fight.  Non fighters will stick to the corner and escape.
      3. Start talking to the knuckle head fighter. Just try to calm them down.  Best approach, ask them what the story is and just listen. Just let them talk and get it out.  Now tell them your problem (my club will empty out if there’s a fight).  Get them a drink if they become complacent as a reward.
      4. If they keep at it, then ask them to leave.  Don’t touch them.
      5. If they refuse to leave again, threaten to call 911.Don’t touch them.
      6. If they say something like, “911 won’t come for this BS” tell them when you call, you’re going to tell the dispatch “knucklehead had his hand in his pocket like he had a gun, I can’t see what it is but he’s pointing it at me”  Again, don’t touch them.

      You’re not really breaking any laws by lying to them.  They know they don’t have a leg to stand on and they’ll walk out.

      If not, call 911. At this point you’ve done everything you can to avoid a conflict.

  7. This wishy washy, can’t make up the mind, oh what do we do mentality is how they run this city. That is why this city is now in a deep, dark hole. They don’t know what they are doing. They can’t seem to manage anything right.

  8. Please don’t tell me how much this stinks!  Time will show that the “ten” clubs to remain have hired the same lobbyist to help them. 

    You’ll see a few things:

    One or more of the ten will open a walmart sized shop like in Oakland.

    The struggling San Pedro Market will get one or two of these pot clubs.

    Wow!

  9. Now that city politicians and political insiders have realized how many millions can be made if you tax and own medical marijuana clubs –

    Watch for insiders to set up city restricted medical marijuana club licenses, city licensed club facilities, political, security and land use consultants lobbyists etc to each get a big piece of millions in medical marijuana club profits

    Watch next Council election you will see large political contributions from medical marijuana club license owners, families and friends like we now see from alcohol and card clubs

    Has anyone checked into who really owns the highly profitable 100 + medical marijuana clubs which are a license for millions in profits and watch what political insiders, ex politicians will buy out or be on Board of medical marijuana club license owners

    Bet the same politically connected insiders will

    1) Bet get the same politically connected insiders will get 10 city licenses for medical marijuana clubs,
    2) Hire same ex City Council politicians, city staff or ex City insider lobbyists, land use consultants and attorneys which is a business expense for clubs
    3) Rent out – soon to be established city required licensed special club facilities at highly inflated rates
    4) hire family and friends at inflated salaries and benefits to run licensed clubs like happens for city subsidized community and non profit groups

    You can with the same creative accounting city uses and inflated business expenses transfer many millions in profits from non profit marijuana clubs to political insiders, families, friends and former politicians and city staff

  10. It’s clearly a recipe for corruption and insider enrichment. And it’s anti-democratic. How can elected officials be so out of touch and have so much contempt for the will of the people? We are inching towards Mubarek-style governance every day. Californians voted to allow marijuana to be sold for medicinal purposes. And San Jose’s voters approved a tax. Council members were not elected to subvert Prop 215 or reduce the tax revenues by making sales less convenient.

    Next step: stoners outside grocery stores with recall peitions for Nguyen, Liccardo, Hererra and Constant.

  11. ” It’s clearly a recipe for corruption and insider enrichment.”

    Look at Downtown Dance and Card Clubs politics, regulations, licenses, policies, lawyers, lobbyists, required security, high club rents, and political contributions for examples of how city and political insiders will extract millions from non profit medical marijuana clubs

    Council and insiders will use “public safety” as reason for city’s club control and regulation

  12. Imagine we have city council members who actually want to place limits on the activities of dope pushers. Oh right it’s medical, that’s why they all have flashing lights and dayglo signs. Silly me. It’s inspiring to know that my council rep is standing arm-in-arm in solidarity with the dope dealers. Could this be a reason for the Peter Pan complex and inability to settle down.

  13. I take the following issue with clubs.

    http://www.sacbee.com/2011/02/28/3435312/california-school-kids-complain.html

    • Feb. 10: Two students at Monterey Trail High School in Elk Grove were taken by ambulance to a hospital after eating pot-enhanced brownies. The next day, a 17-year-old boy was arrested on suspicion of possessing and furnishing marijuana.

    • Feb. 10: Michael Flores, 18, was arrested at Franklin High in Elk Grove on suspicion of selling marijuana-laced brownies the day after a student came to that school’s office complaining of illness.

    • Feb. 9: A junior went to Sacramento’s Florin High School office and told staff she had gotten sick after eating a brownie that contained marijuana. The girl was examined by emergency personnel and sent home.

    • Feb. 9: Six students in Evanston, Ill., were hospitalized after eating brownies laced with marijuana, according to a school website.

    • Feb. 2: The principal of Albany Middle School in the Bay Area sent an e-mail to parents saying that at least three kids in a two-week period had gotten sick from eating pot brownies.

    I saw an interview about some dummy that left his pot laced brownies on the counter at a gas station, the Mexican worker of the station (I mention this because he’s ESL)gave them to his kids because they weren’t inventory, and they were professionally packaged.  His kids got sick, there was an investigation, people looked at the tape and sure enough, it wasn’t his fault.

    But is this the club owners fault?  Let’s take a look at local laws.

    http://www.scribd.com/doc/294943/Medical-Marijuana-Santa-Clara-County

    Sec. B26-4. Authorized on-site activities.
    On-site smoking, ingestion or
    consumption is not authorized.

    I don’t think we should be letting folks take stuff out of the building.  In Amsterdam it’s illegal to possess anything over a 1/2 gram. How does their system compare to ours?  Do they have a better handle on pot clubs?  Is it an example we should follow?

    Maybe Sam can answer that.  At a meeting a few months ago, the council approved a trip for him to see how “Bicycling” is done in Amsterdam.  Sam was that a fun trip?

  14. What’s that smell in the air? CORRUPTION.

    I do not own a club card so I hold no bias; nonetheless, I’m well aware that it’s a difficult enough to uphold a dispensary, they are obligated to undergo absurd, eyebrow-raising standards and fees just to have a “Yes, We’re Open!” sign hanging on their front door on a day-to-day basis. The city has essentially taken their money and turned their backs on the owners. While watching Kron-4 this morning, I heard that the limited permits will go on sale via Ebay auction? What a coincidence that Ebay Headquarters are in San Jose..

    Our jails are unfortunately filled by people with possession of an 1/8th of bud or less! Allowing murderers, rapists and child abusers to continue about their daily lives since there obviously isn’t any more room for them. One hell of an example the council is setting for future generations, I seriously cannot wait for my generation to patch-up your mistakes.

    By the way, as a student pursuing a degree in health care, I have a problem with obese and over-caffeinated lobbyists, I think we should shut down 90% of McDonald’s and Starbucks in the city as well.

    • ” eyebrow-raising standards and fees “

      Huh,

      From what I see the cost of entering this “business” amounts to first-and-last on the most marginal retail locations in the city, a bag of dope, and whatever it takes to get a stoner off his couch long enough stay open. OK and maybe a hand-painted day-glo sign, a scale and a strobe light.

  15. The fee structure at “RULES” was discussed by one citizen. A $250K nonrefundeable application fee was put forth by this citzen to eliminate those entities that could not compete for a city permit which whould cost $1million or more per year.

    Further, “Asset Seizures” by the San Jose Police Department was also championed by this same citizen as revenue streams to fund citiy operations to permit cannibis clubs from running amok.

    The “Doobie Brothers”, not the rock group of yester year but, a collection of well intended and passionate members of the reefer community did put forth several coherent sentences especially one attorney patient. This attorney patient testified that she uses marijunana to treat her “butt ugliness” by giving her the euphoria that she was really a “Playboy quality centerfold”, when naked.Since she refused to publically disrobe and demonstrate her claims her testimony was rebuffed.

    David S. Wall

  16. Irrespective of what one thinks about the larger issue of marijuana use in our society, this measure is simply too harsh and draconian.  I hate to throw a primitive pejorative like “unAmerican” around, but to simply issue an arbitrary City Council dictate that mandates the vast majority of merchants within a given retail sector must shut their doors, is not in the best traditions of life in a free society.  If the Council is going to cap the number of these so-called “dispensaries,” then it should do so via attrition, not by ordering them to disestablish themselves.

    I’d say the same thing if these were shoe repair stores, or those little shoppes where they specialized in scented candles & soaps for middle aged women, or whatever.  People who operate businesses in San Jose shouldn’t have to tolerate the City Council treating them like they are a rabble of ignorant peasants.  The City Council simply shouldn’t be in the business of issuing such high-handed and haughty proclamations.

    If the City Council wanted to limit the the number of these businesses in the city, then they should have done so.  But they failed to do anything when they had the chance, and now those businesses are here.  The legitimate owners & operators of these businesses should not be forced to pay the price for the City Council’s failure to act on this question any number of years ago, when they were free to do so.  Its too late now, or at least it would be, in a civilized society.

  17. My uncle, a wonderful man, died a very painful death.  He was under hospice care and the family took turns taking him to Stanford to his many, many appointments.  We (including him) decided to get him cannabis to sooth his final days.  None of us knew about marijuana so we did not know how to go about getting it or where to get it.  There were no cannabis clubs then.  The cannabis that was given to my uncle – that he freely took – was the wrong type.  Instead of calming him he spent a horrible night fully alert that added to his suffering.  Within 2 years of his passing, I lost my mom to cancer.  She was slowly suffocating to death for 17 days.  Her doctors could not give her comfort and she would wake up gasping for air.  I will always remember her eyes of torment looking at me begging me for help.  If cannabis clubs were around then – I would have gone there for help.  I want to choose when we need this medicine and I want these businesses to complete for my business. 

    I’ve seen some responses where people are citing articles about teens consuming brownies with cannabis and how alcohol is legal and some how ok.  I am in total agreement that teens and drugs are a bad idea.  However, the “legal” drug, alcohol, is far more prevalent and destructive to our youth and society than cannabis.  According to the California Department of Alcohol Beverage Control, in San Jose there are:

    - 523 Active Off-Sale Retail Licenses (i.e. grocery stores, liquor stores, package stores, etc.) that sell alcohol—- 5 times the number of cannabis businesses. http://www.abc.ca.gov/datport/AHCityRep.asp

    - 945 On-Sale Retail Licenses (i.e. restaurants, bars, etc.)  —9 times the number of cannabis businesses http://www.abc.ca.gov/datport/AHCity.asp

    Together there are over 1400 businesses in San Jose where people can go to purchase alcohol –  a legal drug.  How is that even possible?  Do we really need these companies to be pushing this “legal” drug on us? 

    I think the “10 cannabis clubs” proposal is a very bad idea.  Council should have set parameters at least two years ago.  Wasting money battling law suits because the council failed to plan accordingly is wrong.  Existing cannabis companies should be grandfathered in and allowed to stay where they are located provided they are not causing a nuisance or blight.  I want cannabis tax money from all of these companies to keep services in San Jose, and I want to be able to track where this tax money is being spent.

    • Your uncle wouldn’t have been able to get his dope near Stanford where he was being treated because the richer smarter people there a wise enough to control the dope pushers. Somehow I think that 10 dope outlets in San Jose would have been sufficient to supply him. If we stipulated that one would be allowed per council district, that would mean that anyone residing in San Jose would be only 10 minutes (at most) distance from a dope store.

    • Gates,

      Is there some reason that if marijuana is a legitimate drug, that it shouldn’t be distributed at a pharmacy like all other prescription drugs? It seems rather immoral that the city is taxing marijuana and making money off of terminally ill people. Why do we need “clubs” for marijuana? I know Luigi has led the charge for clubs, but I have never heard him address why he wants the city to make money off of very sick patients, probably most who have virtually no money.