Sass Talk: Temporary ban on rec pot businesses likely needed
June 3, 2017
I took a couple of field trips this month related to learning more about cannabis and how it may affect our city if retail, commercial grows, testing, and edible production are implemented. I learned a lot and will share some of the highlights with you.
The first trip was to Breckenridge, a visit I piggybacked on top of a wedding I attended in Vail. I met with their mayor, city manager (formerly the police chief) and the assistant city manager. We met for two hours and our talk was primarily centered on their experiences with the legalization of cannabis in Breckenridge.
Some metrics on Breckenridge so that you can put things in perspective. Their population is approximately 4,000. South Lake Tahoe is approximately 22,000. Add in the Nevada side of the Stateline area and Myers and we are probably closer to 28,000-30,000. They experience around 1.6 million skier visits a year while Heavenly, Kirkwood and Sierra combine for somewhere around 1.2 to 1.6 million per year.
Our summer business is considerably bigger than our winter business while Breckenridge is considerably smaller. Sixty-five-percent of our voters supported Prop 64, and in 2012 when Colorado voted to legalize cannabis Breckenridge had 73 percent voter support.
Breckenridge taxes cannabis at 5 percent. This is on both recreational sales and medicinal sales. California will not allow taxation on medicinal sales. In addition to the 5 percent cannabis tax Breckenridge passed, they also charge a 4.5 percent local tax. Last year Breckenridge collected $800,000 in cannabis tax revenue of which $200,000 went to enforcement and administration of the program. The tax goes to their general fund and then council votes to allocate the revenues.
At first, the program launched with several issues. The traffic pulling up to the storefronts was bothersome to neighboring businesses. Lots of people running in and running out of the stores causing parking and traffic flow management issues. Additionally, neighboring stores complained about the smell. Initially, leftover edibles were being consumed by housekeeping staffs and rental car company employees causing too many people getting high without understanding the consequences. In some cases, employees thought they were just ingesting candy. Other issues revolved around inexperienced tourists trying something because they were on vacation and not knowing how to deal with it. People were found passed out in bars and when woken would not admit to what they had done. Often it took a nurse or a doctor who to get them to admit to what they smoked or ingested.
I asked about arrests for driving under the influence and the city manager said that most times intoxicated drivers had put cannabis and alcohol in their body so making an arrest was usually made legal due to the booze. At this point, the ex-police chief stated that for the most part, cannabis is pretty invisible in town. Not an issue was the general consensus of the three.
I think the reasons for this are pretty simple to understand. The cannabis shops are all located out near Airport Road and not in town as a result of a 2015 election where 70 percent of the residents voted to not allow cannabis on Main Street. The three or so shops are about 3 miles away from the downtown area and on a side street invisible from the main thoroughfare. Breckinridge now has a moratorium on any new shops and the various service industries have educated staff about the edibles being left behind by tourists who won't take them on a plane with them.
Additionally, it seems the Uber drivers work with the shops to get customers there and back safely. Some shops even give the drivers a store credit for bringing them customers since no public transportation goes to Airport Road. All in all, they seemed to have reached a happy medium after some trial and error.
Last week I made another trip with Councilmember Brooke Laine to Sacramento for an all-day session on cannabis. Some conservative metrics shared at the meeting by both legislators, industry experts, growers association and cannabis shop owners and attorneys: 13 percent of California's population currently uses the product; it's a $6.5 billion industry and could go to $10 billion; of this, $2 billion goes to growers; there is 10 million pounds in production, currently of which 2 million pounds are consumed in state; it equals 1/40 of the state's economy.
The biggest issues the industry faces are where to put their cash since banks won't take their money as they are federally regulated, and that approximately 93 percent of the product grown has pesticides on it. The most pressing issue they face is that the state of California has not produced the regulations necessary to comply with the entire Prop 64 vote.
Recently, the chief marijuana regulator announced that they have released the regulations for medicinal sales and testing, which can be found at cannabis.ca.gov. After a comment period, revised regulations will be put out. Regulations for recreational sales, commercial grow and edible production are still to come.
Almost all speakers agreed that Prop 64 was put in place too soon. Without well thought-out regulations, the industry will be in correction mode for a long time to come. The advice we heard from a few of the speakers on both sides of the fence was to put medicinal and testing ordinances in place using the state guidelines as a starting point.
They suggested putting a temporary ban in place for everything else until the state has figured things out. If the city does not do that, then business applicants can apply directly to the state for a permit and operate without local ordinances or payment of local taxes.
Looking ahead, council will have to consider what to do. Personally, I'll be advocating permitting testing labs and medicinal sales taking into account what I learned in Breckenridge and what we heard last week. I do think we will have to have a temporary ban on everything else until we know what the state regulations are and whether our city will agree on a tax to fund enforcement, auditing and other police services to curtail the opioid issue our city faces.
Next Tuesday, City Council will have a time-certain 1 p.m. presentation on the survey done to determine our voters interest in a ½ cent sales tax to fix our roads. I encourage you to either attend the meeting or watch online.
I am 100 percent supportive of this tax that could have a 15-year sunset term because I believe it is the only long term solution to address an issue that all of us agree is a mess. We must fix our streets and this tax measure would guarantee that all of the funds would be used for such purpose. If the city does a good job, perhaps the voters would agree in the future to extend the measure.
Finally, a big shout to all of our students who completed senior projects this week at STHS. This is my seventh year of judging and I look forward to it. My students' projects this year included programming a robot, fire juggling, making a film, learning CrossFit and a photo essay on homelessness. I am so proud of our high school and our students and a big shout out to Frank Kovac who coordinates the program. I encourage you to volunteer to be a mentor or judge. You won't regret it.
The weather is great. I hope you're getting outside and enjoying South Lake Tahoe. Have fun!