San Jose pot shops may move into more locations

San Jose wants more cannabis dispensaries, so it’s looking to relax rules on where and how they can open in the city.

Right now, existing dispensaries have the green light from the city to grow—but there are no eligible locations to do so. A new policy is making its way to the San Jose City Council that may allow them to finally expand.

Last week, the Planning Commission voted 7-3 in favor of cutting distance requirements from 1,000 feet to 500 feet between cannabis retailers to schools, day care centers and other community spaces. They are also recommending that the requirements designed to prevent the concentration of dispensaries in a certain area, or in high-crime hotspots, be eliminated. The commission’s vote is just a recommendation to the city council and these changes would only go into effect if approved by councilmembers at their June 13 meeting.

This renewed effort comes less than a year after officials tried to reform cannabis dispensary rules to make way for new shops and more growth outside of East San Jose, where most dispensaries are clustered. The other reason for this push: each dispensary is estimated to bring in $1 million annually in city revenue.

“By passing this and being in favor for this, it would spread (dispensaries) out of District 7 and sort of alleviate that clustering effect,” Commissioner George Casey said. District 7 is where the majority of dispensaries in the city are located.

Last year, councilmembers allowed the amount of cannabis business licenses that exist in the city to increase from 16 to 37. But the existing restrictions made it impossible for any dispensary to expand, largely because owners struggled to find suitable locations that did not violate any rule.

“We thought we found 1,400 potentially compliant locations,” city planner Martina Davis said. “When we started implementing it and working with those businesses working on the site, we found that we were way off.”

Davis said former restrictions only felt arbitrary and unnecessarily limiting after implementation. She believes this new plan will yield better results.

A number of changes have started going into effect, including where dispensaries can operate. In February 2022, leaders voted to allow cannabis retail storefronts already registered with the city to open a second location in commercial areas, instead of the industrial zones as previously permitted.

City officials believe this iteration of rule changes will help get more dispensaries to open across San Jose. In addition to cutting the distance requirements between dispensaries and schools, among other establishments, it also suggests eliminating the distance requirement between competing storefronts. To ensure there won’t be an overconcentration of dispensaries in one area, the new policy would allow four dispensaries to open within a 1,000 foot radius of each other. The rule that prohibits any new dispensaries from opening in District 7 is staying in place.

The city is also suggesting removing the restriction that prevents new dispensaries from opening in crime hotspots. San Jose Police Department data found that crime rates are actually lower on neighborhood blocks that have a dispensary.

Rich de la Rosa, a lobbyist for south side dispensary Canna Culture, said relaxing the rules is a step in the right direction, but he’s not yet convinced these changes will work.

“I understand keeping them away from middle or high schools, but there’s just so many different ways, that without being silly, they could adjust the setbacks so they do open up more areas for cannabis to do business in San Jose,” de la Rosa told San José Spotlight.

But for Commissioner Sylvia Ornelas-Wise, the rules around day cares and other community centers are why she opposed the new policy. Commissioners Jorge A. Garcia and Louis Barocio also voted no.

“I would like to speak on behalf of all mothers… I would not want any of these businesses near my children,” Ornelas-Wise said. “It’s just like I like to gamble, but I don’t want a casino in my backyard because I know the damage that it’s going to do to my community. (Cannabis) is the same thing.”

Contact Jana Kadah at [email protected] or follow @Jana_Kadah on Twitter.