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Santa Barbara Medicinal Marijuana Dispensaries Slow to Open as Local and State Regulations Evolve

2 storefront dispensaries have received approval to open in the city, and another 2 applications are pending

A dispensary at 3617 State St. in Ontare Plaza is one of two that have been approved by the City of Santa Barbara. Neither has opened. Click to view larger
A dispensary at 3617 State St. in Ontare Plaza is one of two that have been approved by the City of Santa Barbara. Neither has opened. (Sam Goldman / Noozhawk photo)

Even as California’s laws and public opinion regarding marijuana evolve, the going is still slow for medical marijuana dispensaries in Santa Barbara.

As of this month, two have applications pending with the city and another two have received approval, though they’ve yet to open.

Medical marijuana dispensaries are closely regulated by the city’s zoning ordinance.

They’re prohibited from cultivating their pot within city limits, must operate as cooperatives or collectives, and cannot make a profit off the medical marijuana sold to their members.

Only three are allowed to operate at any one time, and must each be in one of five separate areas of Santa Barbara. Dispensaries are further prohibited in existing mixed-use buildings with residential condominiums, and only Santa Barbara County residents can have memberships.

They’re further subject to various municipal inspections, and must have security provided by an outside security company.

Santa Barbara used to have four city-permitted dispensaries, but all closed up shop in 2012, within a few months of federal raids and the delivery of asset-forfeiture letters to landlords.

The city has more recently approved dispensaries at 3617 State St. in Ontare Plaza and at 118 N. Milpas St. on the Lower Eastside.

The windows of both storefronts are currently papered over, and the locations lack any signage. The inside of the planned Milpas dispensary, The Canopy Health and Wellness Center, is under construction.

The storefronts’ journey to approval was not without controversy. Neighbors’ opposition revolved around potential safety issues (such as a person leaving a dispensary getting mugged), a storefront’s influence on nearby children, and parking impacts.

The Planning Commission’s approval of Canopy was appealed to the City Council last spring and upheld by one vote.

There are two pending applications for storefronts at 2609 De la Vina St., which, like State and Milpas streets, has been in the works for a while now, and at 128 W. Mission St.

As the complex local and state regulations around medicinal and recreational marijuana evolve, Santa Barbara has worked to keep up.

In October, the council extended a city ban on recreational marijuana businesses so it could develop its own regulations for recreational pot businesses.

The prohibition originally was enacted last September in response to the increasing likelihood that California voters would approve Proposition 64 legalizing recreational marijuana use and sales in the state. The ballot measure did pass in the Nov. 8 election.

The ban, which is technically an interim emergency zoning ordinance, is set to end on Sept. 5, 2018.

Of particular concern for officials were the potential impacts related to where those businesses would set up shop in the city, such as the effects of having such a business near a school.

City staff have said that developing regulations and passing an ordinance would be an 18-month process.

On top of these regulations, 70 percent of Santa Barbarans approved a 20-percent tax on medicinal and recreational marijuana businesses in last November’s election.

The tax will be levied on the gross receipts of these businesses, which could include cultivation, delivery, manufacturing, retail sales and any number of other processes involved in such an operation.

The justifications the city drafted for the tax include insufficient funds for its capital, operating and reserve needs; extra funding required to ensure dispensaries’ compliance with relevant laws; and extra funding required to ensure the protection of public health and safety should recreational pot be legalized.

Santa Barbara officials have estimated about $1.1 million would be raised annually from three permitted medical marijuana dispensaries.

With its passage, Proposition 64 legalized marijuana and hemp, established state agencies to oversee the substance and imposed cultivation taxes and a 15-percent excise tax on it.

Californians 21 and older can now possess, transport and use up to an ounce of marijuana for recreational purposes, though state business licenses are not expected to go out until early 2018.

Noozhawk staff writer Sam Goldman can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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