Marijuana sales banned in Santa Clara; temporary councilmember to be appointed

Santa Clarans won’t see the budding commercial cannabis industry bloom in their city any time soon.

The Santa Clara City Council on Tuesday approved a permanent ban on all cannabis-related activity in the Mission City with a 5-1 vote. Mayor Lisa Gillmor cast the lone no vote, saying there’s room to discuss options other than a ban and gauge residents’ feelings further.

City officials claimed the decision doesn’t contradict voters’ 2018 approval of Measure M, which authorized a 10 percent tax on recreational cannabis sales and a $25-per-square-foot tax on cultivation space. Instead, they said the measure simply asked whether or not the city should collect taxes if a cannabis program were to be established.

City Manager Deanna Santana said the council can undo the decision at any time. The ban is to help ensure the city has time to consider its own taxes and regulations, she added, if and when sales are approved.

“Cannabis is here — the nose never fails to tell you — whether we like it or not,” Councilmember Teresa O’Neill said. “I don’t know that I’m ready for a ban, but maybe we put a pause on it and waste all the effort that has gone into it.”

O’Neill also expressed interest in learning how nearby dispensaries have impacted the community, and in taking a public poll on a ban, especially since more than 55 percent of Santa Clara residents supported 2016’s Prop 64, also known as the Adult Use of Marijuana Act.

“Just because you ban it, doesn’t mean it’ll go away,” resident Pat Knoop said. “It’s not the same as it was. All the fear-mongering and bad in the past have been disproven.”

Tuesday’s vote comes after multiple extensions of a moratorium on cannabis sales, initially intended to allow the city time to develop regulation and legislation.

“Things have changed for us in terms of what revenue we thought we might be achieving from cannabis sales, but most importantly, our council’s changed,” Gillmor told San José Spotlight on Monday. “I think some of the positions on cannabis sales may have changed in the last election.”

City officials said Tuesday that revenue projections — estimated at $1.2 to $2.4 million locally — have not been met across the state, and the city would be negatively affected by added costs of regulation by the Santa Clara Police Department.

Gillmor said she heard the voters’ thoughts “loud and clear,” but expects negative reactions from the public regarding the council vote.

“There’s probably going to be a little bit of backlash, but we said we are going to explore different ways of doing it,” she said.

Sean Kali-rai, founder of Silicon Valley Cannabis Alliance, said a ban would ignore the Measure M vote and signify a shift away from years of work consultants and city staff put into researching policies to regulate the legalized market.

“Unfortunately, there was a lot of time, resources, effort and energy spent on this,” Kali-rai said, adding that the City Council’s makeup of more conservative members has contributed to the ban. “Now to have it all come down to a moratorium, it’s absolutely disappointing.”

Kali-rai said he doesn’t buy the city’s claim that there’s not enough data to support allowing marijuana businesses. He also said that a ban would push demand (and subsequent tax revenue) to nearby dispensaries — such as San Jose’s Airfield Supply Company and the recently unionized MedMen, which are both a short commute from the Santa Clara border. In fact, the nation’s 10th-largest city has welcomed the budding industry so much so that after a full year of recreational sales, some cannabis consumers are now concerned taxes are too high on the products they purchase.

San Jose City Hall has reaped the benefits from pot sales, as one estimate tallies the city collected $13 million during the 2017-2018 fiscal year. Additionally, city documents show that the 2018-2019 Adopted Budget for the Marijuana Business Tax totaled $13.5 million, which includes anticipated tax receipts for recreational and medicinal marijuana sales.

A report from the Santa Clara Police Department ahead of Tuesday’s vote stated that potential impacts of approving commercial cannabis activity include overestimated tax revenues, possession by minors and increased service calls for cannabis use.

Kali-rai said the city hasn’t researched the fallout from banning cannabis and driving sales into the underground market, such as disproportionate incarceration of people of color and lack of safe access to products.

“Whenever you create a prohibition, as was proven by alcohol, illegal forces will step in and they’ll fill the void,” Kali-rai said. “But because (legalizing cannabis sales is) something that they particularly may not like, or their church or their schools may not like, they’re ignoring the voters.”

Temporary councilmember appointment

Also on Tuesday, the council declared former Councilmember Patricia Mahan’s seat vacant after her resignation earlier this year, greenlighting the process to find a temporary replacement until the November election. The council has one month to find a new member.

Residents interested in filling the seat can submit applications from Feb. 12 to Feb. 28 to Santa Clara City Hall. Interviews will be held during a special meeting on March 9 and a new member must be chosen by March 12.

Resident Mary Grizzle supported filling the vacant seat in order to represent all the ongoing development in the area, especially the Reclaiming Our Downtown initiative. “I feel an urgency that the council select someone for the seat immediately,” she said. “I want to see the downtown come to fruition before I die.”

But Santa Clara Planning Commissioner Suds Jain is concerned filling the seat is a violation of the California Voting Rights Act and will give that applicant an unfair advantage of being the incumbent in the November election.

“Leave the seat open and let the people vote,” Jain said.

Contact Katie Lauer at [email protected] or follow @_katielauer on Twitter.