How the State’s New Medical Marijuana Laws Affect San Jose

Two decades after California sanctioned marijuana as medicine and a year out from possibly outright legalization, Gov. Jerry Brown approved a plan Friday to regulate the world’s largest cannabis industry.

Spurred by the threat of a ballot initiative to make California the fifth state allowing general adult use, the Legislature introduced a trio of bills endorsed by law enforcement, the cannabis industry, labor unions and local governments. The triple-joined AB 243, AB 266 and SB 643—if one passed, they all passed—marked the first time state lawmakers effectuated a pot policy since SB 420 in 2003 let patients and caregivers form collectives.

The sweeping package signed into law just before Sunday’s deadline will transform California’s billion-dollar medical pot sector with a complex multi-agency system of testing and licensing.

For the first time, the industry, until now limited to nonprofit co-ops, can legally turn a profit. Weights and measures, labeling, safety, pesticides and distribution will be strictly monitored. A new Bureau of Medical Marijuana Regulation run by a governor-appointed “weed czar” will oversee everything from growth to production, transport and sale.

“This gives us enormous momentum,” says Dale Sky Jones, who leads the ReformCA initiative, a measure expected to rally some of the biggest pro-pot players. “We can finally start to undo some of the damage brought upon us by the prohibition.”

But for the immediate future, at least, not much will change.

Many of the just-signed state rules won’t come into effect until 2018, and the details have yet to be crafted. They largely reaffirm local control and grandfather in existing ordinances. Since the state’s Compassionate Use Act legalized medical pot in 1996, the industry has been governed by a patchwork of local rules while remaining illegal under federal law. Following the passage of SB 420 in the early aughts, dispensaries and grows proliferated as cities and counties struggled to maintain order and oversight.

Now, with unprecedented guidance from on high, some cities may re-think their bans, while the ones that allow them under strict limitations will have to decide whether to tweak local rules in reaction to California's inaugural marijuana bureaucracy.

San Jose, the only South Bay city to permit pot clubs, may revise some of its year-old ordinance. Santa Clara County, which enacted a regional policy this month, expects to make only minor adjustments to mesh with the state’s incipient pot policy.

“Fortunately, our ordinance already falls in line with what the state’s doing,” says Sylvia Gallegos, a deputy county executive who helped author the policy. “We’re already moving in the right direction.”

San Jose, for its part, enacted a regulatory framework in 2014—a few years after the City Council tossed out a prior ordinance under threat of referendum—that bans pot shops from all but 1 percent of the city. The number of collectives has since dropped from 78 to 20 still vying for the city’s blessing. Five disqualified clubs have sued over the restrictions; others were slapped with massive fines.

While the state will uphold local law, its new guidelines appear to contradict a provision in San Jose’s ordinance requiring collectives to grow and make all their own products. To comply with the city, many dispensary owners teamed up with other operators and investors and shelled out hundreds of thousands of dollars this past year to move into facilities with commercial kitchens and enough space for an on-site farm. That closed-loop model—or vertical integration, in bureaucratic parlance—was meant to make it easier to regulate the plant from seed to sale in the absence of state oversight.

“That was a bad piece of legislation,” says John Lee, who lobbied against the city ordinance and has now channeled his energy into a grassroots initiative called the Marijuana Control, Legalization and Revenue Act of 2016, which would reset municipal regulations. “It’s prohibitively expensive to comply.”

Under state policy, a collective up and running by this year can continue as is. Although, statewide licensure will eventually limit on the number of large cultivation ops—the only kind San Jose allows.

Just as San Jose's ordinance set off a flurry of litigation, the state's new regulatory plan has already incited legal challenges. The American Medical Marijuana Association (AMMA) claims that the new laws attempt to modify a voter initiative, Prop. 215, which is expressly forbidden in California's constitution. Specifically, the advocacy group takes issue with provisions that limit patients' gardens to 100 square feet, require regular doctor recommendations and allow cities and counties to ban grows, storage, manufacturing and delivery.

"Our medical cannabis rights, protected for nearly 20 years by Prop. 215, have been hijacked and Prop. 215 is under attack like never before," AMMA director Steve Kubby, said in a statement announcing his intent to overturn the new regulatory scheme. "The new law is an unacceptable."

Regardless of how things shake out in court, policymakers—given the raft of legalization initiatives jockeying for space on the 2016 ballot—have to consider how to lay the groundwork for a future recreational market.

“We wrote our measure to complement what came out of the Legislature,” Jones says. “We want it so that if you jump through hoops in the medical market, you qualify to participate in this parallel adult use sector.”

Reformers hope a 2016 ballot measure could pull support from the younger, progressive voters who tend to turn out for a presidential election. A challenge for the industry will be to unite around a single initiative. Big donors have taken a wait-and-see approach, holding off an endorsing one of the several measures until proponents file final drafts.

“If we lose at the ballot, it wouldn’t be because voters aren’t ready for legalization,” Jones says. “It would be because the activists couldn’t get their act together.”

Thankfully, there’s an air of inevitability now that Alaska, Colorado, Oregon, Washington and the District of Columbia have legalized cannabis, says Lauren Vasquez, spokeswoman for the Marijuana Policy Project and co-founder of the Silicon Valley chapter of Americans for Safe Access.

“Voters are ready for this,” she says. “We just need to give them a measure that’s well thought-out and well drafted.”

PPIC survey

Source: Public Policy Institute of California

A spring survey by the Public Policy Institute of California (PPIC) found that 56 percent of likely voters support legalizing marijuana for general use. It’s a narrow margin, but a tick up from the split poll when the issue last came to voters five years before.

But success at the ballot, according to PPIC analyst Dean Bonner, will require proponents to make inroads among Latinos, Republicans and older voters.

Given the range of support for the state’s new medical pot regulations—they drew endorsements from Democrats and Republicans, police and pot lobbyists—legalization has been recast as a bipartisan issue.

There’s also greater depth to the conversation compared to the failed legalization push in 2010, Jones adds. Proponents are talking about how to build an industry that welcomes women, minorities and non-violent felons—the ones who bear the brunt of the prohibition but have been shut out under the state’s plan.

“This has always been about civil and social justice and how the War on Drugs disproportionately hurts our communities of color,” says Jones, president of Oaksterdam University, the nation’s first cannabis college. “But the conversation in past years has placed more emphasis on taxation, thinking that the public would be more interested in the money angle.”

Just as the Great Depression hastened the end of the alcohol prohibition, Prop. 19 in 2010 unsuccessfully tried to leverage the opportunity created by a global recession that emptied state coffers by marketing legalization as a way to rake in more revenue. Heading into 2016, Jones says, the message has evolved.

“Thanks to the Black Lives Matter movement and a federal push for criminal justice reforms, the public is more informed about social inequities,” Jones says. “It adds weight to the conversation.”

Jennifer Wadsworth is the former news editor for San Jose Inside and Metro Silicon Valley. Follow her on Twitter at @jennwadsworth.


  1. Oh great! Just what we need in CA—another bloated, useless bureaucracy sucking down tax dollars and adding to the unfunded liability of unsustainable defined benefit pensions requiring the taxpayers to fund most of the actual cost as well as lifetime Cadillac health care coverage for the new group of weed bureaucrats. Love the photo of Moonbeam. Is he saying Mass, pretending he’s the Pope, or perhaps even Jesus?

    • I’m really surprised you of all people are against forming a bureaucracy for this JMO. The Alcohol board is there to keep organized crime and criminals from getting a piece of the pie so to speak. They’re also there to make sure people don’t do things like cut ethyl alcohol with denatured or Isopropyl.

      It’s required because it boils down to several issues of public health and safety.

      There are some things though that I think are overreaching. I’m doing some side work for a local club, prepping them for CSJ’s compliance. One of the requirements is to hand over monthly reports to the city, which is fine and dandy except that one of the reports is, “Who is buying, and how much are they buying?” I was handed an example printout of how the report is to be formatted. While I have no technical issue crafting a SQL query to pull that data out. I do have a moral dilemma with the city having a list of names and quantities purchased.

      Unfortunately for the patients, the CSJ can do this. MMJ isn’t protected under federal HIPAA laws. Still though, overall at least everything collectively to date has been a step in the right direction.

      (PS If Rich Robinson hadn’t screwed with the first set of laws the CSJ laid out, things would be a LOT more laxed than they are now)

      • RMC,

        If marijuana was really for sick people it would be regulated by the FDA, It would cost 2 billion dollars and take ten years to get it to the market in the US.

        It would be a prescription from a real doctor or HMO, it would come in a bottle and you’d get it at CVS or Walgreen’s.
        At the very least it would come in a package with a tax stamp and a warring label just like cigarette’s do. because it will kill you just like cigarettes do.

        Now lets face it when that happens the drug companies that make it are going to recover that 2 billion they spent feeding that new big government bureaucracy.

        The final result will be bootleggers trying to under price the legal market just like they do with cigarettes and booze.
        Mean time relax have drink lite up a Cuban cigar and see how long it take for the cops to show up.

        • All the dopers who call themselves “patients” really crack me up. If you can’t find an MD to prescribe MMJ for you and to authorize a handicap placard, you’re probably too stupid to breathe. Stop the nonsense, go the Colorado route; but double the penalty for a simple driving under the influence of MJ beef and make it a three year minimum in state prison, not transferable to county jail, if you are driving high and cause bodily injury.

      • One of the fallouts from the San Jose ordinance is the proliferation of “delivery services”. With little enforcement capability from the city ……… a dispensary that is forced to close simply changes to a delivery service, circumvents any and all restrictions that store front operators must adhere to including taxes ……….. and before you know it there’s (50) of these operations in San Jose alone. Unless there is a significant policy in place to curtail these operations ………….. San Jose has done nothing more than send the business backwards.

    • There are actually (12) state agencies that will be involved in the licensing and enforcement side of things. Each license will have a different state agency involved…….. so in other words …. it’s way worse than you even thought.

    • TAX $$$ – that is what’s driving this cash Cadillac! If people understood the “truth” and the “facts” in this matter they’d be outraged!

      The reason why “closed-loop” is important in this issue is its the ONLY lawful way to be in the cannabis business. Everyone must understand that federal law (CSA) has “supremacy” over state law especially when they directly conflict with one another. So in order for an individual or organization to be following state law to be protected from federal law and the potential of prosecution then both must coincide and cooperate with each other not conflict. So when state law says you can “sell” and “profit” from what amounts to controlled substance transactions when marijuana exchanges hands and federal law explicitly states the opposite there’s a problem folks.

      The reason why state law says only two entities can lawfully operate a business involved with marijuana medical or otherwise is so there’s NO “sale” and NO “profit” occurring. A “collective” and a “cooperative” are equally owned by every member of the association and because we all agreed to make our own medicine then NO transfer of ownership occurs indicating a “sale” and NO “profit” incurs either because everyone’s a equal share holder.

      The travesty of justice here my fellow American’s is the fact that California rather than explaining the reality of laws and how it’s supposed to be done properly they’ve chosen to do the opposite because that’s how the state can collect tax revenue. You see if illegal entities known as for-profit corporations aka a “dispensary” then it’s legal to collect money and tax the unlawful business activity. I’m not against contributing funds to governmental entities to administrate, enforce and educate the industry so like any other business there are rules and regulations for everyone to follow and abide bye.

      Living lies and proporting false truths to the people of California is NOT how our government and leaders are supposed to serve us. The new laws are only trying to coverup the last 10+ years of corruption and the fleecing of millions of medical marijuana patients throughout the state. I hope people can see what I see and help me STOP this marijuana mayhem and madness once and for ALL!

      Dave Armstrong vs the State of California

  2. This didn’t help anyone but bureaucrats, it continues to allow cities to discriminate against patients, while feeding the reality that most of us are tired of the double standards when we can just walk into a liquor store, get a fifth of vodka, hop in our cars, and get loaded. We’re tired of a spinning moral compass which blows from side to side every time a conservative opens their mouth about what’s right and wrong. We’re going to still push for ballot to legalize pot, and we’re not going to allow prohibition anymore. #feelthebern

    • > #feelthebern

      Don’t mean to break your heart, Mr. Doe, but the fix is in.

      Bernie Sanders is just a DNC rodeo clown who is supposed to distract the lefties and allow Hillary to appear to be “moderate”.

      The other “candidates” on the stage with Hillary were just stiffs with no chance.

      It was just a little TV drama scripted to look like a “debate”. Hillary IS the Democrat nominee. Take it to the bank.

  3. Progressive’s are pot smokers? Who’d have guessed that!
    Now they a complaining about to much government breathing down they’re smoke ringed necks.
    It’s there monster, it’s poetic justice that they have to feed it!

  4. I’m working with a Collective in San Jose that was sent an illegal letter of disqualification. If there are any collectives who feel the application process for Collectives disqualified them based on his or her disability, disability and cannot afford a lawyer right now. The Federal Court will reimburse costs, up to $15,000, for attorneys taking a pro bono case.

    To learn more or to sign up for pro bono representation opportunities in the San Francisco and Oakland divisions of the Court, please contact Manjari Chawla, Legal Help Center Supervising Attorney, at 415-626-6917.

    To learn more or to sign up for pro bono representation opportunities in the San Jose division of the Court, call Kevin Knestrick, Legal Help Center attorney, at 408-297-1480.

  5. These comments are weird. There are people complaining that it’s getting legalized, and the same people complaining that it’s being regulated just like alcohol were complaining about prohibition on other posts.

    Personally, I used to smoke and I don’t anymore. I am doing so much better without it. Yea, now I’m going to get people bad talking me because for me personally, I’m better without it.

    However, the amount of time and work you keyboard warriors put into complaining about prohibition you are truly proving you have nothing to live for.

    I like it. This whole empty and meaningless drama is distracting you while people like me are doing something substantial in life.

    Keep yourselves distracted.

    • JJ,
      Cynical , sarcastic, facetious, narcissistic, I hope after reading one of my comments people might look or think about the subject from a different point of view. Leave the myopic liberal bent to the staff writers, or wrap a fish in it.
      The world is going to hell in a hand basket, stick your foot out and trip the carrier.

  6. I’ve smoked (or vaped) cannabis virtually everyday for over forty years & will continue to do so regardless of government regulations or state or federal law. There are tens of millions of Americans who share not only my point of view,but my disdain for the laws against cannabis,for the law in general & particularly those in law enforcement who enforce the law. The law has made millions of otherwise law-abiding citizens into outlaws & then these morons can’t figure out why we despise them so much. I’ll enjoy my cannabis anywhere & anytime I please & if that upsets anybody,well that’s just fine with me & too damn bad for them. Try to stop me ! Now let’s legalize gambling & prostitution & lower the age of consent to fourteen because payback is a bitch & I hate all of you moral crusaders with a passion I usually reserve for my first wife !!!

  7. > “I’ve smoked (or vaped) cannabis virtually everyday for over forty years & . . .”

    “. . . and it hasn’t affected me one bit. I’m just as smart and clear headed as I’ve always been.”

    • Thanks once again for recognizing my genius. My intelligence was measured at 154 on the Stanford-Binet Intelligence Scale & I’m as sharp & witty as I’ve ever been. On the other hand no one has ever questioned your intelligence or even mentioned it,because your inane commentary speaks for itself. Cannabis – It’s good for what ails you & conservatives hate it,that’s a win-win !!!

  8. I see two comments here claiming “Discrimination!!!”

    One of the clubs that is the last of the 20, and is well on its way to opening hired me a few years back to do some political consulting. Basically I told them, “Don’t annoy city hall!”

    What did everyone else do instead? They gave everyone a day off work, put them in green shirts with a pot leaf emblazoned across the front. Almost 1000 people took their 2 minutes berating city council, calling them racist, discriminatory, greedy, etc. I saw people crying at the podium for weed… So pathetic, and not helpful for your cause at all.

    So instead of council getting home at a reasonable hour, they had to sit through that for 3-4 hours. At one point CM Herrera called it out, “These people in these shirts work for the clubs” (Good call Rose, I’d say you were 75% in the ballpark)

    Sadly these new regulations are “Unworkable” (To put into Rich Robinson’s terms) in comparison to the ones he fought against. Had you all kept your trap shut, paid the city its cut, and followed the law, you would still be open. Instead you made a big stink over what really was an inevitable non-issue of regulation.

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