TO: PUBLIC SAFETY, FINANCE AND FROM: Councilmember Jimenez
STRATEGIC SUPPORT COMMITTEE
SUBJECT: SAN JOSE POLICE DEPARTMENT DATE: October 19, 2023
CANNABIS REGULATIONS
Approved Date 10/19/2023
RECOMMENDATION:
1. Accept the update on staff's proposed changes to the Administrative Citation Schedule of Fines for violations of Chapter 6.88 of Title (Business Licenses and Regulation) of the San José Municipal Code for the Cannabis Regulatory Program, including the following:
a. Aligning the hours of operation with the state, which would make the new operating hours 6:00 a.m. – 10:00 p.m. Pacific Time.
2. Cross-reference this report to be heard at the November 14, 2023, City Council meeting.
3. Direct staff to report back to the PSFSS Committee within the next three months on the following topics:
a. The possibility of aligning our city’s regulations with state regulations, including but not limited to Identification Badge Requirements, while maintaining the age of purchase at 21 years in San Jose;
b. How San Jose compares with other jurisdictions on the annual fees for cannabis operations;
c. The possibility of expanding the scope of Department of Cannabis Regulations to include Vape and Smoke shops.
DISCUSSION:
I thank staff for their work on this issue and appreciate the participation from the industry partners. No matter what one’s personal feelings are about cannabis and its allowable use, the voters of our state have spoken, and we as a city have decided to allow operations in our jurisdiction.
PSFSS COMMITTEE: 10/19/2023
ITEM: (d)3
San Jose was a leader in cannabis-related land use and regulations long before the state and other jurisdictions followed suit. Being at the forefront of the legal industry has had its benefits, but it’s also caused our policies to grow stale as evidenced by the fines structure that we are now changing. The industry is evolving, and San Jose needs to evolve with it.
I share the sentiment that this industry should be treated as any other business entity operating with the city. Last year, the legal industry paid upward of $18 million dollars in taxes. Given the precarious financial outlook for city finances in the next couple of years, we should do all we can to streamline and ensure success of this industry so that the city continues to maintain and grow this crucial tax revenue that allows us to adequately serve our residents.
Changing the schedule of fines for violations is a step in the right direction, but I think a deeper analysis needs to be done related to how the city regulations around cannabis align with the state regulations. Time and again we as Council have taken up the issue of “cleaning up” regulations that seemingly should be aligned with the state, and this issue is no different. Where there is alignment, no further action is necessary. Where alignment does not exist, we should have a debate as to why and whether such misalignment makes sense. As an example, aligning the hours of operation with the state seems to be a logical approach that the Council should discuss, and that is why I have included it in the direction when cross-referenced to full Council.
Along the same lines, there is a debate as to whether the annual fee is appropriate when compared to other jurisdictions along with issues around requirements for badging. My hope is that staff can bring back information on these topics so that we can make informed decisions as a committee before referring to the full Council for discussion.
Lastly and potentially most important, a conversation about expanding the scope of the Department of Cannabis Regulations to include Vape and Smoke shops is warranted. There are many stories tied to Vape and Smoke shops selling Hemp-based THC, which is illegal.
Considering that this is happening, it begs the question: should we provide compliance oversight to these shops? The scope exploration for Vape and Smoke shops is not meant to be a path forward to legalization of these establishments. The 16 cannabis retailers along with the second locations and the equity licenses granted by the City Council shall be the only retailers allowed to sell cannabis in the City of San Jose.