Marijuana aficionados on Wednesday will celebrate what’s become a hallowed date on their calendar: 4/20. Thousands will flock to San Francisco’s Hippie Hill to commune under a heady haze, while in San Jose, the city’s straight-laced former mayor has a little something of his own planned.
Chuck Reed will observe the counterculture holiday by standing alongside cannabis club execs to denounce a voter initiative that would replace the city’s nascent pot laws. Measure C, which comes up on the June ballot, would lift zoning restrictions and open the market to any number of new collectives.
“If this passes, then it’s essentially an invitation to the federal government to come back in and shut down dispensaries and start confiscating property,” said Reed, who will speak about his anti-C campaign at a noontime press conference outside City Hall Wednesday. “You have to have a safe and effective regulatory system or you become a target. We have one in San Jose right now.”
The initiative’s lead proponent, attorney James Anthony, believes the regional market could support hundreds of pot clubs. In his official arguments for the measure, filed through the City Clerk’s office, he said San Jose should have at least as many as Denver, which counts upward of 400.
Vic Ajlouny, a member of Reed’s strategically titled Keep Marijuana Out of Our Schools and Away From Our Kids Committee, said that's the last thing San Jose needs.
“We do not want San Jose to become the medical marijuana capital of California,” he said. “But that’s what would happen. If Measure C passes, they’d be all over the city.”
A number of collectives actually agree on that point, which is why they'll stand shoulder to shoulder with Reed on Wednesday. It's an unlikely alliance, to say the least.
Reed spent half his mayoral career battling collectives, trying to regulate the bulk of them out of existence. The city’s first attempt to cap clubs died by voter referendum in 2011. A few years later, the city enacted a new ordinance. This time it stuck.
That was in 2014, Reed’s last year in office. He vowed to protect San Jose’s hard-won weed laws even after he termed out. Fast-forward two years, the number of collectives has dwindled from 80, give or take, to a final 16 sanctioned by the city.
To comply with San Jose’s new rules, the “sweet 16” had to court investors for millions of dollars to build enormous facilities and pay sky-high licensing fees, among other hurdles. After all that work, though, some of the same collectives that originally slammed the ordinance as draconian have become invested in its continuity.
“It's ironic that former political foes are scheduled to stand at the same podium in favor of the same political position,” said Sean Kali-Rai, a cannabis club lobbyist who’s engineering Wednesday’s presser.
Anthony joked about being “the bad fairy who didn’t get invited to Reed’s little event.” But he acknowledged that it makes sense for city-approved collectives to join forces with their one-time nemesis.
“They’ve become part of the establishment,” Anthony said. “Well, whatever, I don’t begrudge them. I don’t think any of them would be too brokenhearted if Measure C does pass. It would just mean they would compete in a more competitive market against mom-and-pop dispensaries.”
Reed, who has been dialing for dollars to fight Measure C, said his biggest pledges have come from landlords worried about federal prosecution, collectives and donors from San Jose’s North Side business district.
Mark Matulich, who founded Airfield Supply in 2010 and plans to join Reed for his press conference, fought the city’s first slate of marijuana regs. He harbored doubts about the zoning and operational rules passed in 2014, too, because of a mandate to grow and make all medicine on-site.
Subsequent changes to local rules coupled with new state laws to govern the industry prompted a change of heart. Since the city adopted its guidelines for dispensaries, Matulich said, he has shelled out $2.5 million to bring his co-op above board.
“We are now backing the opposition against Measure C,” he said, “because we’ve dedicated a lot of time and resources to complying.”
Another reason Matulich opposes Measure C, he said, is because it would allow collectives to open up by schools, churches and rehab clinics. San Jose’s zoning rules impose a minimum distance between collectives and what the city calls “sensitive use” facilities, including religious centers and anywhere children gather.
Anthony argued it would be naïve to think that the city’s rules have actually kept rogue collectives at bay. He posed a question to Reed. “How can you advocate for the status quo?” he said. “It failed. Taxes are down, illegal deliveries and dispensaries are making a mockery of you.”
While only 16 clubs claim the city’s blessing, an estimated dozen or so illegal operations continue. One of the criticisms, even from collectives that support the city’s regulatory efforts, is that more could be done to weed out scofflaw dispensaries.
Doug Chloupek, who owns the Little Orchard collective, implored San Jose officials to shut down a neighboring collective for violating a host of city laws.
“I spent nearly $700,000 to relocate our collective, build out our facility and I may have to close,” he wrote in an email to city staff and the City Council. “The only people who have the power to help are YOU included on this email. PLEASE HELP US. I don't know any other way to get our point across. WE NEED YOUR HELP. Please take action ASAP.”