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Petaluma council hones pot regulations

More than a year after California voters legalized recreational marijuana, Petaluma is poised to next week adopt a slate of policies to regulate the cannabis industry inside city limits.

The city council Monday postponed a vote on an ordinance that would allow cannabis-related manufacturing businesses and two marijuana delivery services while increasing the number of plants residents can cultivate on their properties. The new rules will be considered at a Nov. 13 workshop, and city staff will develop regulations surrounding permitting and fees for consideration at the council’s Dec. 4 meeting.

Petaluma has long taken a hard-line stance on cannabis, banning brick-and-mortar dispensaries in 2007. In 2016, the city tailored its policy to allow medical card holders to cultivate three plants and for delivery from outside of the city to medical users and caregivers.

The city was forced to revisit the issue after the November passage of Prop. 64, which legalized the sale and possession of recreational cannabis for those ages 21 and over within certain parameters, but left some control in the hands of local jurisdictions. Under Prop. 64, the Adult Use of Marijuana Act, it is not yet possible to purchase marijuana without a doctor’s recommendation. The state is expected to issue licenses for recreational cannabis businesses as soon as Jan. 1.

In Petaluma, 62 percent of voters supported Prop. 64, though shaping a comprehensive marijuana policy has been far more divisive for a council that has quibbled over the issue since June.

Though five public speakers Monday urged the city to allow dispensaries, four of the seven council members were not in favor of immediately tailoring its forthcoming policy. Nearby cities, including Cotati, Santa Rosa and Sebastopol currently permit dispensaries.

Eli Melrod, who co-owns Sebastopol-based Solful dispensary, said Petaluma customers visit his business on a daily basis and implored the city to open its doors for retail storefronts.

“Dealing with the issue on a legislative level is really complicated, and helping folks medicinally is also really complicated,” he said. “It’s a very complicated plant with a lot of different compounds and a lot of different ways to use it. For folks to get the most benefit, they really need to consult with folks who are well-versed in different compounds, affects and delivery methods.”

The council will revisit its cannabis policy within the next two years, when it could consider tightening or relaxing the existing rules depending on impacts to the city.

“We’re not in the dark ages, I think Petaluma needs to come to the forefront and say ‘we’re going to be part of this,’” said Petaluma resident Stuart Axelrod, who plans to grow cannabis on his property in unincorporated Petaluma next year. “This is actually coming, whether we agree with it or not, it helps people.”

City Attorney Eric Danly said allowing only a limited number of delivery services inside the city is an attempt to preserve safety and minimize impacts to staff at a time when the city is strapped for cash and resources. An unmarked, secure shipping facility that’s not open to the public could attract less crime than a retail store, he said.

“I strongly believe in the idea of having dispensaries at a future date, yeah, I can see us doing that,” Councilman Chris Albertson said. “Inevitably, I think we will, but I see the slow initiation and incremental increases.”

Some council members felt that the limitations, which also prohibit manufacturing and testing facilities from selling cannabis products to the public, were too stringent.

“We’re really going much too slowly and acting like none of this is happening right next door to us and we can just look across and see that it’s working fine, but somehow, when it hits Petaluma, it’s going to be crime central,” Vice Mayor Teresa Barrett said. “I’m sorry we’re taking that approach.”

The set of regulations up for consideration Nov. 13 would allow for the two delivery services based in the city to serve customers from 8 a.m. to 8 p.m.

“We felt that was a good starting point,” City Manager John Brown said. “I don’t really know what the kind of demand is going to be for this sort of service … This is something we do view as being a first pass.”

The ordinance also allows for an unlimited number of manufacturing facilities, where testing and infusions can be undertaken on wholesale products, as long as proper permitting and licensing are in place with the city.

It allows for no more than six plants that can be grown indoors or outdoors in an enclosed structure as long as they can’t be seen or smelled. Petaluma police will have the ability to crack down on residents violating those rules.

A permitting fee structure and other specifics are also in the works, City Attorney Danly said. There’s also much left to hammer out with subtle differences between policies for medical and recreational marijuana, he said.

Taxes are also a tricky subject, he said. The 15 percent state sales tax on cannabis combined with the local sales tax rate would tally to 23.12 percent, and voters would be asked approved an additional local sales tax increase on top of that rate should the city choose to seek increased revenue from the product.

Voters in Cotati Tuesday overwhelmingly approved a cannabis business tax with 78.9 percent support.

(Contact Hannah Beausang at hannah.beausang@arguscourier.com.)