Closing time has come and gone for about 30 pot clubs in San Jose since the city enacted a sweeping regulatory program over the summer.
Judging by a database of permit applications from the city, at least a couple-dozen more will soon fall under the axe because they fall outside of allowable zoning.
Of the 80 pot clubs open in San Jose earlier this year, 47 have applied for zoning permits. So far, 20 were denied, 20 are under review and six were approved. Those clubs still have to apply for separate operational permits.
The deadline for clubs to submit that set of applications to the city—one for zoning and the other for operational compliance—comes Friday. Adding teeth to the new rules, the City Council in September adopted a slate of fines ranging from hundreds of dollars for minor infractions to $50,000 for multiple violations.
Under an ordinance passed by city leaders in June, only 1 percent of San Jose was zoned for use by cannabis clubs. Dispensary owners whose stores lie outside those areas are scrambling to find a legal site to relocate. Unincorporated areas are out—Santa Clara County banned them last month.
“It’s a war zone out there trying to find a parcel,” said LeAnna Gomez, a manager at Papadon’s, which already shuttered one of its two storefronts. “People are coming in with hard cash—up to $2 million—purchasing parcels way above fair market value in the junkiest areas of town.”
Clubs that submit both applications by 5pm Friday will be allowed to stay open—provided they comply with this newly adopted part of the municipal code limiting clubs above and beyond state law—while the city considers whether to approve or deny their permit. Because that could take up to a year, that buys some collectives time to scout out a new location if they have to (and if they can afford to).
The remaining Papadon’s location lies too close to a mobile home park, violating the city’s 150-foot residential buffer rule, so it probably won’t last that long. Since the business ran out of cash fighting the city leading up to the ordinance being passed and can’t afford to pay more than the asking price on a new facility, Gomez expects it to close sooner rather than later.
Aside from choking out the majority of clubs with land-use rules, the city also requires all pot shops to sell only products grown and manufactured onsite. That rules out just about everybody at the moment—even those six that have earned the city’s coveted stamp of zoning approval.
“All of San Jose’s dispensaries must cease operations at the close of business son Oct. 17, except for those that are operating in strict compliance with the city’s new regulations (i.e. selling only what is grown and cooked onsite),” Buddy’s Cannabis Patient Collective tells customers on their. “We are unaware of any dispensary that meets these new regulations.”
Buddy’s admits it doesn’t. But they’re among the lucky few in one respect: They found a new site. The 20,000-square-foot complex about seven miles from their Stevens Creek store includes enough space for grow rooms, a commercial kitchen and retail space—though it will take more than a year to settle in and re-open. In the meantime, they urge customers to take advantage of their storewide fire sale, which ends whenever the city shuts them down, which could be any day after Friday.
“While timing remains uncertain, the city has recently indicated that it may begin closing clubs as soon as Oct. 17,” owners noted on their website.
Others expect to power through a little longer—at least while their permits pend official blessing.
City spokesman Dave Vossbrink said the real crackdown comes next July, when date the city set for collectives to come into full compliance. Oct. 17 is for applications to be filed, July 17 is the cutoff for everything to get settled.
"At that point there will be clearly legal and clearly illegal operations with reference to San Jose ordinances," Vossbrink said. "No one turns into a pumpkin on Oct. 18, but we will continue to respond to complaints and pursue nuisance issues that stem from any dispensary that is causing overt problems."