San Jose Considers Forming New Division of Marijuana Control

Two years after enacting citywide pot regulations, San Jose may create a dedicated department to enforce them.

A Division of Marijuana Control would cost about $2.7 million a year and require more than a dozen employees with expertise in law, code enforcement and finance. To recover costs, the city would charge each of its 16 registered collectives a yearly fee of about $170,000.

The City Council on Tuesday will consider the plan in addition to other changes to its marijuana ordinance.

City officials recently met California “weed czar” Lori Ajax, who heads the state’s new Bureau of Medical Marijuana Control, to talk about packaging, testing and the lack of uniformity of local pot laws.

“The challenge for staff has been that the regulatory landscape changes weekly, with new cities and counties considering programs to allow medical marijuana cultivation or manufacturing,” Assistant City Manager Angelique Gaeta and Planning Director Harry Freitas wrote in a memo.

Some ideas floated by city officials include allowing more than one site per collective for cultivation, manufacturing and extraction. The city will consider allowing clubs to obtain product from suppliers throughout the state, as long as they pay for the cost of inspections.

More from the San Jose City Council agenda for March 29, 2016:

  • Most of the city’s union contracts expire in 2018, according to a report on labor negotiations. But the city remains in talks with the Police Officers’ Association about a successor agreement to the one that expires this year. Meanwhile, the city has a number of meet-and-confer items to tackle, including classification reviews and health care issues.
  • Mayor Sam Liccardo will introduce his budget proposal, which asks his colleagues to “tap the brakes” on city spending to prepare for future budget shortfalls.
  • Now that the court affirmed the city’s right to charge developers an inclusionary housing fee, the affordable housing charge will go into effect this summer. The policy requires builders to set aside 20 percent of new market-rate apartments for below-market rate housing or cough up an in-lieu fee.
  • The city may team up with a nonprofit to deploy mobile showers for the homeless. If approved, the $350,000 contract with Project WeHOPE would extend through 2017.
  • San Jose residents cut water use by 28 percent, while city facilities slashed potable water use by 35 percent.
  • Because of staffing and equipment shortages, city street-sweepers only cleaned 62 percent of assigned curb miles last year. An audit up for review suggests outsourcing the service if the city can’t afford to handle it in-house.
  • A federal grant funding 14 firefighters for $3 million a year expires in 2018. The city will have to figure out how to pick up the cost, which has already been rolled into the general fund forecast in this year’s budget proposals.

WHAT: City Council meets
WHEN: 1:30pm Tuesday
WHERE: City Hall, 200 E. Santa Clara St., San Jose
INFO: City Clerk, 408.535.1260

Jennifer Wadsworth is a staff writer for San Jose Inside and Metro Newspaper. Email tips to [email protected] or follow her on Twitter at @jennwadsworth.

24 Comments

  1. Ok! Here is the solution. Have the City buy and distribute all marijuana in the City. Have Police and Fire Dispatch handle orders and credit card processing with SJPD make deliveries in their patrol down time. Hire one person to work in Liccardo’s Office to run the City’s new website “HOPHEADS.com and process online purchases. If you preload the patrol car trunks with all the types and brands you can really make some money, probably enough to pay off the millions going to wrongful death victims. You can’t raise taxes so jump into this $300,000.00 a day “Banging Business”. When you get this done I’ll tell you how to merge your prostitutes into your massage parlors, control desease and make a real fortune in taxes. Why not, your already in the moral toilet?????????

    • It’s an interesting time. I compare it to 1931 or 1932 near the end of alcohol prohibition. Various conservative and progressive voices for and against repealing it. One thing we learned from alcohol prohibition, which parallels marijuana. The black market gave rise to a lot of bad guys making money from something the government couldn’t control. Put a lot of cops lives in danger.

      I don’t think I’ll live to see marijuana gain the acceptance that alcohol has today… I’m not going to be around in 80 years.. but if I had a choice between thugs and gangsters or what San Jose has done, I’d much rather go with San Jose.

      • Inasmuch as I have found his past commentary to be as entertaining as it was bizarre, it terrifies me to say that I might have to agree with “Slade” on this one. His suggestions seem to make as much sense as anything else the city is doing and he demonstrate a greater grasp off matters than does Sam “Superfly” Liccardo and the police department’s senior leadership.

        Mayor “Superfly’ is scrambling to find 3 million (tax) dollars to retain 14 firefighters after the public safety Federal grant runs out yet he is willing to pay 2.7 million dollars, with little apparent hesitation, to transform San Jose into a “Cannabis Cartel”. Geez, what has “Superfly” Liccardo been smoking?

        As for the $350,000 a year to shower the homeless, why not just run them through the car wash at the City Corp yard. It would probably be cheaper and more effective. Just hang a bottle of cheap wine at the far end of the car wash tunnel and they’ll run right through.

        • If mayor “Superfly” is willing to spend 2.7 million to create a “Division of Marijuana Control” but apparently not willing to spend 3 million to keep 14 firefighters on after the Federal grant funding them runs out, if the marijuana catches fire, who is “Superfly” going to call to put out the fire? Cheech and Chong or Snoop Dog?

          • >If mayor “Superfly” is willing to spend 2.7 million to create a “Division of Marijuana Control” but apparently not willing to spend 3 million to keep 14 firefighters

            One has nothing to do with the other. Marijuana is paying its own way in San Jose. The 16 collectives left are paying well over [email protected] in taxes. Conservatively, I’d estimate they’re spending a quarter of MJ tax revenue to fund this.

            You’re more than welcome to complain about how Sam isn’t spending the remaining $9m for firefighters. That’d be a fair ball.

      • > One thing we learned from alcohol prohibition, which parallels marijuana.

        I’m not convinced.

        Beer and wine have had utility for humans for millennia. They assured forms of safe drinking water.

        I have no idea how long humans have been using marijuana or whether there is any human utility other than giving people the munchies, growing tits on males, or desensitizing people to the use of stronger, more dangerous drugs.

        • Ahh soundbites. I wish you would have included more in your quote. There’s plenty of articles explaining how the legal US industry is making the cartels give up on growing it.

          http://www.ibtimes.com/legal-marijuana-united-states-hurting-mexican-drug-cartels-farmers-2244096

          A lot of folks wonder what Sam’s motivation might be… When he was still on the nay side, I was at a council meeting bringing this point up (with reprints of the articles) I specifically called Sam out because I knew he had been a deputy DA prosecuting these cartels down south.

          I’m sure our budget woes had a lot to do with this, but I’m also Sam has seen just how evil the cartels are, and anything to cut them down a notch is something he favors.

      • Robert, you’re obviously biased and ignorant in your response and remarks! You have an interest hidden in this matter and you are NOT looking out for the average day to day smoker bro! Blowing the reality in this matter into a joking fashion to hide the facts and the truth will only harm you later when the “Pot Smokers” understand that you’re a one sided bastard only looking to profiteer from their choice of medicine because you’ve unlawfully invested in drug trafficking and money laundering as some sort of corporate stakeholder going to get rich off the backs off of “pot smokers” use of cannabis is absurd! You will reap your own rewards my friend, Mark my words and remember them well!

        Dave A.

      • Mr. RMC,

        This “revenue-from-marijuana-will-save-us-all” rhetoric is the same sort of tedious tripe we heard when proponents of the state lottery claimed that revenue from the lottery would instantly transform schools into posh 5-star resorts of higher learning. What happened to all that lottery money? Maybe I missed the transformation.

        Legalized weed will always be more expensive than illicit weed because people that buy the illegal pot don’t pay taxes on it. I have also heard from a few potheads of my acquaintance that some strains of illegal weed are actually superior because the THC (intoxicating agent) content can be higher in the illegal stuff because there are no regulations and no limits on how strong that weed can be.

        The higher the taxes on legalized marijuana, the more people will turn to the illegal stuff. This is the same thing that happened with alcohol. However, if “moonshine” or “ever clear” could be made to taste as smooth as commercial bourbon or scotch, who would pay all the extra tax on the legal stuff? Supposedly, illegal marijuana is often better than the commercial stuff. I wouldn’t know but maybe mayor Superfly can comment since so many of his ideas and promises indicate to me that he must be smoking something..

        I am no moralist and if it was up to me, in order to generate the “political heroin” that politicians like mayor Superfly are addicted to and call tax revenue, I would have San Jose open casinos, brothels and topless bars in order to generate this mythical revenue and become the “Las Vegas of Silicon Valley”. Even so, given San Jose’s history of fiscal mismanagement, I am convinced that mayor Superfly and his political progeny wouldn’t even be able to run a whorehouse at a profit. This supposed marijuana revenue will go up in smoke faster than a Cheech and Chong doobie.

        • Har har har JSR cheech n chong. So funny I forgot to laugh.

          Let me explain how CSJ has made money thus far, and some insight as why they want to charge this. I’ll start from the beginning.

          Club applies for a DBA license, CSJ gets a nice check for a peice of paper you hang on your window.
          Club pays application fee for MJ license. Book of requirements is thrown at them.
          Club builds to city code and gets inspected, pays for this.
          Club gets inspected by the SJPD, all staff fingerprinted, pays for this.
          Club gets a visit from the department of finance once a month to look at their accounting system. They don’t get charged for the visit, but they do get a tax bill.

          I think our city (other than the license fee going up) is making a profit on this. They’re certainly keeping a lot of people employed from all kinds of city departments. Even right now, at 9pm on a Friday, I’m trading e-mails with one of them.

          You can’t lay this kind of blame on *just* Sam. There’s a lot of people working hard on both sides making this happen. I wish it was as easy as Sam just waving a magic wand and saying, “This too shall come to pass” and it happens.. but it’s not that simple….

          While you slam Sam for being the “Mastermind Weed Czar” you fail to realize this is keeping a lot of people in CSJ departments working and funded. I can’t imagine any of them would agree with you.

          • Mr. RMC,

            You’re making my argument for me. While mayor “Superfly” selling his marijuana on the street corner or through dope-pad dispensaries will bring in some revenue, the costs of creating a new bureaucracy/cartel and new inspection apparatus to oversee this new drug distribution network will undoubtedly be much more expensive than whatever revenue the drug sales bring in.

            San Jose can barely fund its public safety departments now. Where do you suppose “Superfly Sam” is going to find SJPD personnel to help with the oversight of the new drug dealing bureaucracy? There aren’t enough cops now to fill all the beat cars and not enough fire fighters to keep all the fire houses at full staffing now. He hasn’t figured that one out yet?

            Nothing would make me happier than to be able to credibly proclaim that mayor Superfly was, as you put it a “Mastermind Weed Czar”. The problem is, he isn’t a mastermind of anything. I would love to see him strutting down the street carrying a cocobolo walking stick, wearing a flashy furlined coat over a purple suit with a red panama hat and calling himself “Weed Czar the Tax Pimp” but the truth of it is, and I have little doubt that history will ultimately prove this out, creating a weed-oversight bureaucracy is a losing proposition unless we go “all-in”. Let’s put up pot clubs, casinos, brothels and strip clubs and really generate some revenue without having to be politically or fiscally responsible. A Weed-Tax is just another political ploy from an old playbook (i.e., where’s my school lottery money?)

          • Isn’t it funny how quickly this went from dieing people needing their medicine, to clubs, taxes and profits.
            I wonder if there is a club for tylenol?

    • Let’s not stop there Jack, as long as the city needs to make money lets pick up some of the other industry that’s been chased out of town in the last 40 years. Lets bring back the canning and frozen food industry. We could distribute it on light rail and buses keeping house wives from clogging up the roads on shopping trips.

      As long as the cops are trafficking our drugs lets have them do weapons as well, machine guns and nail bombs should
      be quite profitable. Fireworks and Molotov cocktails by what else the fire department, what a great way to drum up business then we could charge to put fires out and take shooting and bomb blast survivors to the hospital.
      Oh and lead free bullets and 30 round magazines.

      Just like narcotics, alcohol, tobacco and firearms all unfairly targeted for regulation and control by the Feds in violation of the constitution. Lets make San Jose a free city since its already a sanctuary city.
      Lets thumb our noses at Obama and the corporate crones that run the place.

      Hmmm, what ever should we do about human trafficking prostitution and sex slaves?

      Thanks Jack I like it!

  2. Mayor Sam Liccardo will introduce his budget proposal, which asks his colleagues to “tap the brakes” on city spending to prepare for future budget shortfalls.

    Really, seems 2.7 million for DMC does not fall under Sams tapping on the brakes of his spending.

  3. About the street sweeping…residents routinely leave their yard waste on the street, days ahead of the scheduled pickup. This creates a hazard, for pedestria
    ns, cyclists and autos, contributes to clogged storm drains, and obstructs parking.

    If the city can ticket my car, for being parked facing the wrong way on the street, can’t they issue citations for yard waste deposited in the street, days ahead of the scheduled pickup,

    A quick tour around my neighborhood on any given Monday will reveal numerous revenue-generating opportunities for the City, with respect to this problem.

    Thanks for reading, everybody!

  4. Eventually legalization & regulation will go a long ways toward removing the outlaw stigma from millions of marijuana enthusiasts,taking all the fun out of it ! Did you know that illegally grown & procured marijuana becomes legal once it’s in the hands of anyone with a Doctor’s Recommendation for it’s use ? Determining the origin of a bag of marijuana is virtually impossible once it’s in the hands of the consumer. Regulating & taxing it excessively will just make it more expensive & many will just continue to buy it from the same dealers they’ve patronized for years. The dispensaries niche is their storefronts & their wide assortment of strains,concentrates,edibles & clones. They say that “variety is the spice of life” & no dealer can compete with the dispensaries in that respect. On the other hand most everyone who partakes already has at least one reliable source or grows their own. Tens of thousands of San Jose residents were buying & using marijuana long before the first Dispensary opened it’s doors & the majority of them don’t have a Doctor’s Recommendation allowing them to visit one now. Many of those who do have one don’t shop at the dispensaries now because they already have a source,or they only coveted one for the legal protection from prosecution it provides. The city had better think carefully before burdening the dispensaries with hundreds of thousands of dollars in fees & taxes,because they’ll ultimately be passed on to their customers who’ll always have the option to take their business elsewhere ! Smoke ‘em if you got ‘em folks,next stop the Magic Kingdom !!!

  5. $15,000 per MONTH in fees to be paid out by EACH dispensary? That’s a lot of dough for some of these smaller dispensaries. Wonder if SJ considered pro-rating such a fee based on sales volume. This will in effect wipe out several of the 16 … no doubt.

    • It blows , but like anything with city/taxes best to go along with it, then politely state your case to the council in private meetings and emails. Gotta remember; council, they’re all people too, nobody likes 1000 people calling them out in public.

      Hopefully we can make our case. Basic business, you sell at 3x your cost. Paying fee’s/tax to maintain city staffing and infrastructure is the responsibility of every business, but is it fair to charge ours so much? I think SJ should consider looking at existing business models to provide the best use case in adopting a “reasonable” fee schedule. We’ve all already been burdened by moving, and getting our facilities up to code.

      I’d have to look, but I don’t think any business’s related to pharmaceutical, or alcohol get dinged nearly as hard.