There is no negative fiscal impact to the County General Fund associated with the approval of the recommended actions.
REASONS FOR RECOMMENDATION
At the February 25, 2014 Board meeting, the Board of Supervisors engaged in a discussion concerning the numerous County departments that have functions related to marijuana. The Board expressed concerns that County departments may have perspectives and roles that work at cross purposes.
Marijuana in our community is a timely topic of discussion for two reasons: One, the City of San Jose recently revised its operational and land use regulations for medical marijuana dispensaries and, two, as widely reported, marijuana advocates will likely organize and finance an initiative to place a measure on the California ballot in 2016 to legalize recreational marijuana for adults.
There has not been an ongoing work group per se dedicated to coordinating our marijuana roles, but department stakeholders do collaborate when appropriate, and the Office of the County Executive has periodically convened departments to coordinate our activities and strategies, the most recent occurrence of which was in 2011 to propose amending Ordinance Code Division B26 pertaining to Medicinal Marijuana Dispensaries.
A pillar of the County mission is to promote a healthy, safe, and prosperous community for all, and, to that end, County departments are unanimous and unequivocal with respect to all aspects of marijuana. The Administration opposes youth access (unless medically necessary), violations of existing state and federal marijuana laws, the inadequate regulatory structure for medical marijuana dispensaries, and supports regulating marijuana so that those with serious illnesses can obtain an uncontaminated product from a pharmacy through a prescription.
Further medical marijuana research should be encouraged to establish its effectiveness and safety. No other drug has been freely available before its potential harms and benefits have been evaluated. Two THC drugs for those with a serious illness, Marinol and Nabilone, are currently available through pharmacies, and a third, Sativex, is used in Europe and close to FDA approval. Marijuana should continue to be available for those 1% to 2% of Californians who have a serious illness, such as, glaucoma, HIV, or cancer.
Public Safety and Justice Committee
At the May 21, 2014 Public Safety and Justice Committee meeting, the Committee approved the Administration’s recommendations. In addition, the Committee expressed two additional wishes. First, the Committee supported the County Marijuana Work Group continuing its work. The Administration reported that this work group would continue to convene to further investigate possibly filling regulatory gaps to assist the City of San Jose strengthen its regulatory structure for dispensaries in San Jose.
Secondly, the Committee requested Public Health and Alcohol and Drug Services Departments lead a public education campaign that would educate the public about the adverse health effects of marijuana use, particularly on youth.
For the reasons set forth in this report, the Administration recommends that the Board of Supervisors prohibit the establishment of medical marijuana dispensaries in the unincorporated county (there are currently no dispensaries located in the unincorporated county), direct the Administration to investigate opportunities for County functions to help fill regulatory gaps for medical marijuana dispensaries in San Jose, and prepare proposed legislative positions to be incorporated into the Board’s Legislative Policies and Priorities.
The Administration is recommending (in a linked Legislative File #72598) an urgency moratorium ordinance so that Planning and Development can prepare amendments to Division B26 of the Ordinance Code and the Zoning Ordinance. The moratorium ordinance is necessary so that the County has sufficient time to prepare the appropriate ordinances, and in the interim, no dispensaries can be established in the unincorporated county. The Zoning Ordinance amendment will be considered at the Planning Commission meeting in July and both ordinance amendments would be presented to the Board at its meeting on August 5, 2014. The moratorium ordinance would be effective immediately and shall be in effect for 45 days. The Board may extend the moratorium ordinance for up to two years, following notice and a public hearing. The adoption of the moratorium ordinance and any extensions to it require a four-fifths vote.
The Administration is also recommending that the Board direct the Administration to prepare marijuana policy positions to incorporate into the County’s Legislative Policies and Priorities in order to permit departments to advocate on behalf of the County’s interests. The County would be in a position to advocate for medical research, participate in forums studying the effects of legalizing marijuana, and address quality of life policies that will affect our residents. Additionally, the State Legislature’s current consideration of the Correa bill regarding regulation of medical marijuana dispensaries illustrates the need for the County to take an active role in shaping the policies that impact us and our residents.
County Marijuana Work Group
To prepare this report, the Administration established a work group comprised of staff from numerous County departments. If the Board directs the Administration to prepare analysis and program proposals for additional local regulations of dispensaries, some of these staff would be involved in the development of the proposals.
· Sylvia Gallegos, Deputy County Executive
· Patrick Vanier, Supervising Deputy District Attorney, Narcotics Prosecution Team
· Carl Neusel, Assistant Sheriff
· Dan Peddycord, Director, Public Health Department
· Sara Cody, Public Health Officer
· Sue Nelson, Division Director, Children, Family, and Community Services, Department of Alcohol and Drug Services
· Adam Perez, Sr. Management Analyst, Office of the Public Defender
· Joe Deviney, Agricultural Commissioner and Sealer
· Jim Blamey, Director, Department of Environmental Health
· Carolyn Walsh, Principal Planner, Department of Planning and Building
· Elizabeth Pianca, Deputy County Counsel
· Michael Rossi, Deputy County Counsel
· Danielle Christian, Legislative Analyst, Office of Intergovernmental Relations
· John Myers, Policies and Procedures Administrator
Background on Marijuana
The federal Controlled Substances Act (CSA), adopted in 1970, is federal U.S. drug policy under which the manufacture, importation, possession, use and distribution of certain substances, including marijuana, is regulated. The CSA defines five schedules of narcotics based on medical uses and the likelihood of addiction. Under this scheme, marijuana is classified as a Schedule I drug. Schedule I Controlled Substances are those designated as having “no currently accepted medical use in the United States, a lack of accepted safety for use under medical supervision, and a high potential for abuse.” Drugs in this category are considered the most dangerous class of drugs due to high potential for abuse and potentially severe psychological and/or physical dependence.
Medical Marijuana in California
In 1996, California voters passed Proposition 215, making California the first state in the country to allow for the medical use of marijuana. Voters approved Proposition 215, known as the Compassionate Use Act, with a 55.5% majority. Proposition 215’s ballot language stated that it was to “ensure that seriously ill Californians have the right to obtain and use marijuana for medical purposes where that medical use is deemed appropriate and has been recommended by a physician who has determined that the person's health would benefit from the use of marijuana in the treatment of cancer, anorexia, AIDS, chronic pain, spasticity, glaucoma, arthritis, migraine, or any other illness for which marijuana provides relief.” Included in the ballot language was a statement that patients and their primary caregivers who obtain and use marijuana for medical purposes upon the recommendation of a physician would not be subject to criminal prosecution or sanction.
On January 1, 2004, SB 420 (Vasconcellos), the Medical Marijuana Program Act, became law. The bill established a statewide, voluntary registry identification card system for patients authorized to engage in the medical use of marijuana and their primary caregivers. SB 420 also allows for the formation of patient collectives, or non-profit organizations, to provide marijuana to collective members.
As set forth under SB 420, the California Department of Public Health (DPH) administers the Medical Marijuana Identification Card (MMIC) program. It is mandatory that all counties participate in the program by (a) providing applications upon request to individuals seeking to join the identification card program; (b) processing completed applications; (c) maintaining certain records; (d) following state implementation protocols; and (e) issuing DPH identification cards to approved applicants and designated primary caregivers.
California medical marijuana laws provide a defense or qualified immunity for anyone charged with a marijuana violation if that individual is in full compliance with these medical marijuana laws. If the individual does not comply, such as, by selling medical marijuana, the individual could be subject to criminal prosecution.
Twelve other U.S. states subsequently enacted medical marijuana laws: Alaska, Colorado, Hawaii, Maine, Michigan, Montana, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, and Washington.
Pending and Recently Passed Legislation
At the time of the May 21 PSJC report, there were two bills proposing state regulation of medical marijuana working their way through the California Legislature – SB 1262 (Correa) and AB 1894 (Ammiano). Since then, AB 1894 has failed to pass the Assembly floor, leaving only SB 1262.
SB 1262 (Correa) passed the Senate at the end of May and is now in the Assembly. The bill requires all medical marijuana dispensaries, processing facilities, cultivation sites, and transportation services to be licensed by the state Department of Consumer Affairs. No licensee may obtain a license for more than one of these activities. In order to obtain a license, a dispensary’s owners must submit to a background check conducted by the California Department of Justice, obtain a letter from the local county or city jurisdiction affirming that the dispensary can legally operate within its limits, comply with all local laws, and pay all required fees. The bill additionally places restrictions on physicians issuing medical marijuana recommendations by prohibiting them from receiving compensation from dispensaries and requiring disclaimers on advertisements. Counties and cities would retain their ability to further restrict, regulate, and outright ban medical marijuana dispensaries, and counties are explicitly granted the authority to impose taxes on medical marijuana-related activities.
The bill also amends sections of the California Health and Safety Code to apply many of the state’s existing food safety restrictions to marijuana-infused edibles. Edible manufacturing operations would have to follow food safety regulations, such as, requiring employees to be certified in proper food handling. SB 1262 also imposes packaging restrictions on edible marijuana products, including requiring packaging to be opaque and tamper proof, prohibiting the use of photos or images of food on packaging, and requiring specific medical and allergen warnings.
On June 12, 2014, the bill was assigned to two Assembly committees – the Committee on Business, Professions and Consumer Protection, and the Committee on Public Safety. The Committee on Business, Professions and Consumer Protection is scheduled to hear the bill on June 17. The bill has not yet been scheduled for a hearing in the Committee on Public Safety. The committees must hear the bill by June 27 in order for it to move forward, and all bills must be sent to the governor before the end of the legislative session on August 31.
City of San Jose’s Recent Action
The City of San Jose also recently approved new regulations on medical marijuana dispensaries. In a 7-3 vote on June 10, 2014, the City Council approved new regulations that:
· Require buffer zones between dispensaries and sensitive uses, such as, schools, residential neighborhoods, and businesses
· Limit locations for medical marijuana dispensaries to industrial zones
· Prohibit individuals under the age of 18 from entering dispensaries
· Limit hours of operation to 9 a.m. to 9 p.m.
· Require security cameras and on-site security personnel
· Require dispensaries to pay all applicable City taxes
· Establish a “closed-loop” system for dispensaries, though not limited to San Jose’s borders
The County submitted a letter to the City Council setting forth our support of a “closed-loop” system to reduce illegal outdoor and indoor growing operations by requiring that dispensaries grow their own medical marijuana, limiting dispensaries to a single cultivation site where they can grow their own medical marijuana, and restricting where that single cultivation site may be located. Dispensaries may only have one cultivation site, and that cultivation site must be located either within San Jose’s limits, within Santa Clara County, or within a county adjacent to Santa Clara County. Additionally, dispensaries must comply with all state and local laws in the jurisdiction where their cultivation site is located.
Despite earlier proposals by various City Councilmembers, the City Council did not approve a requirement that medical marijuana dispensary members obtain state-issued Medical Marijuana Program ID cards, which are administered by the County Department of Public Health. Based on advice from the City Attorney, the City Council referred this provision to staff for study.
Medical Marijuana Dispensaries (MMDs)
From the Administration’s analysis, which included marijuana-related crimes, the effects of marijuana, particularly on youth, the possible increase in youth access to marijuana due to the proliferation of dispensaries in San Jose, and the current lax regulatory environment for medical marijuana dispensaries, the Administration’s recommendation is that the Board of Supervisors prohibit the establishment of dispensaries in the unincorporated area of the county.
State law explicitly grants local governments, including the County, the authority to regulate the location and establishment of dispensaries. Until 2013, appellate courts disagreed regarding whether a local ban on dispensaries was preempted under federal or state laws. The California Supreme Court resolved this split of authority in City of Riverside v. Inland Empire Patients Health and Wellness Center, Inc. et. al. (referred to as City of Riverside). City of Riverside is binding precedent on which local governments may rely as explicit authority for regulating or banning dispensaries. The case held that nothing in the Compassionate Use Act or the Medical Marijuana Program Act expressly or impliedly preempts ordinances declaring medical marijuana dispensaries prohibited uses in a local jurisdiction.
If the Board does not wish to ban dispensaries from the unincorporated area, the Administration still proposes that the Board adopt an interim ordinance imposing a moratorium on the existing County regulations permitting the establishment of medical marijuana dispensaries so that the County can further develop local regulations for dispensaries to address current regulatory gaps. Adoption of the moratorium ordinance would suspend the application of the Zoning Ordinance regulations relating to medical marijuana dispensaries for up to 24-months and prohibit the establishment of any medicinal marijuana dispensary during this time period.
History of MMDs in the Unincorporated Areas
Since 1997, Medicinal Marijuana Dispensaries have been allowed in certain commercial and industrial zoning districts in the unincorporated area, subject to obtaining a Use Permit and Architecture and Site Approval. These zoning districts are located along Bascom Avenue, San Carlos Avenue, and near the County Fairgrounds.
From 1997 to 2009, there were occasional inquiries, but no activity associated with Medicinal Marijuana Dispensaries in the unincorporated area. However, since 2009, six dispensaries opened in the unincorporated area without first filing for and obtaining the required land use approvals. After being contacted by the Sheriff and Code Enforcement, five of the dispensaries closed within a month and one was annexed to San Jose.
In order to file for a Use Permit, a pre-application meeting is required. Only one formal pre-application meeting for a medicinal marijuana dispensary was held in 2009 for a property on Bascom Avenue. That property did not have sufficient parking for the proposed use, and the cost of remodel/conversion of the existing building was too costly for the applicant.
The Planning Office receives approximately 10 inquires per year about establishing a dispensary in the unincorporated area. The County of Santa Clara is one of only two jurisdictions in the county, along with San Jose, that allows dispensaries. The other fourteen jurisdictions have either banned dispensaries or do not permit this use in their zoning ordinances.
Marijuana’s Effects and Youth Access
One of the principal reasons the Administration recommends prohibiting the establishment of dispensaries in the unincorporated area of the county is due to the work of the Department of Alcohol and Drug Services (DADS) and Office of the Public Defender.
The first attachment is a DADS policy paper that sets forth the harmful effects of marijuana use on youth. Marijuana is unique in its impact on adolescents and young adults because of the effects it has on memory and executive functioning. Structural brain changes are found in the amygdalas of even recreational users. Multiple studies have found that adolescent use is higher in states with medical marijuana laws (8.6%) than states without such laws (6.9%).
The Office of the Public Defender (PDO) has also conducted analysis that seems to link the proliferation and proximity of dispensaries in San Jose to an increase in substance-related suspensions in the East Side Union High School District (ESUHSD).
For the past two school years, the PDO has been working with five schools in the ESUHSD to find alternatives to suspensions through its School Engagement and Suspensions Alternatives Project (SESAP). One of the problems that is a growing concern is the frequency of substance-related incidents on campus, and at least one school attributed it to the growth and proximity of marijuana dispensaries in San Jose. Below is a table and a chart relating to the overall rise in suspensions for substance-use-related incidents in the ESUHSD compared to the decrease in overall suspensions in the district:
Substance Suspensions % inc. / dec.
Overall Suspensions % inc. / dec.
Source: DataQuest, California Department of Education.
The data above pertains to the annual number of substance-related suspensions and overall suspensions from the 2007-2008 school year to the 2012-2013 school year, the most recent period that data is available at the ESUHSD. The substance-related suspensions are for violations of the following education codes:
· 48900(c) Possession, Use, Sale, or Furnishing a Controlled Substance, Alcohol, Intoxicant.
· 48900(d) Offering, Arranging, or Negotiating Sale of Controlled Substances, Alcohol, Intoxicants.
· 48900(j) Offering, Arranging, or Negotiating Sale of Drug Paraphernalia
· 48915(a)(3) Possession of Controlled Substance.
· 48915(c)(3) Sale of Controlled Substance.
From 2007-2008 to 2010-11 school years, the ESUHSD schools saw small decreases in the number of substance-related suspensions, but not as significant as the overall decrease in suspensions at the schools (25.38% v. 61.92%). However, in the 2011-12 school year, there was a significant increase in the number of suspensions for substance incidents. While the schools exhibited a 72.72% decrease in the overall number of suspensions compared to the baseline year of 2007-2008, the substance-related suspensions saw an increase of 54.27%.
Furthermore, there was an increase of 106% in substance-related suspensions in 2011-2012, compared to the previous school year, while the schools saw a decrease of 28.36% in overall suspensions in 2011-2012, compared to the previous school year. This is also the same period when dispensaries were proliferating and at their highest number within San Jose, between 90-100. These violations were not all for marijuana as the education code does not require schools to track the type of substance.
However, based on the Public Defender’s work with four of the ESUHSD high schools in the 2012-2013 school year, it was reported anecdotally that the vast majority of these incidents did, in fact, involve marijuana. Furthermore, associate principals (APs) of discipline reported that students were coming onto campuses with baggies, pill bottles, and, in some cases, medical marijuana cards from the dispensaries. The APs were reporting that marijuana use among students persisted last school year, which can be seen by the continued high number of substance-related violations in the 2012-2013 school year. While possession of up to one ounce of marijuana is an infraction, it is a misdemeanor if the possession is on a school campus. Thus, the impact is not only discipline related to the suspension, but in many cases can result in a referral to the Juvenile Probation Department in the form of a citation/ticket. Although, the percentage of drug-related offense citations and arrests to the Probation Department has hovered between 18-20% over the last three calendar years.
The schools involved in the PDO School Engagement and Suspension Alternatives Project (SESAP) have developed some innovative ways to work with students who are caught on campus under the influence or in possession of marijuana including no-citations policies, in-house suspension programs, and referrals to drug and alcohol treatment services. Nevertheless, with the easy access to marijuana that the dispensaries appear to be creating, these incidents require resources for dealing with substances on campus and result in cognitive impairments to developing minds, increased addiction, lower school performance, and avoidable injuries.
Although the proliferation of dispensaries in San Jose may have led to an increase in substance-related incidents, one study suggests it may not be solely the availability of medical marijuana that affects youth use, but it may be the normative environment and adult attitudes toward use that result in increased youth use.
Crimes Related to Dispensaries and local Marijuana Cultivation
The second attachment is an analysis prepared by the Narcotics Prosecution Team in the Office of the District Attorney that depicts the volume of local illegal indoor and outdoor grows and the connection to organized drug cartels. In the absence of government oversight, it is not possible to corroborate where dispensaries source their marijuana, and law enforcement agencies have evidence that some local dispensaries are selling marijuana harvested by organized drug cartels.
Of 118 indoor marijuana grows over the last three years:
· 76 involved converted homes;
· 2 involved converted warehouses; and
· 41 of these locations were identified as rental properties.
Over the last three years, the Office of the Sheriff’s Marijuana Eradication Team (MET) reported the removal of 355,005 marijuana plants and the seizure of 1,838 pounds of processed marijuana bud derived mostly from outdoor grow locations. These outdoor grow sites were typically discovered by detectives in remote areas of unincorporated Santa Clara County. In 2013, the MET eradicated 24 gardens and destroyed 99,214 marijuana plants. The team removed garbage, empty and full propane tanks, car batteries, camping supplies, and chemicals, such as, Miracle Gro, Round Up, Malathion, and Furadan.
In 2012, the MET removed approximately 7 tons of debris from illegal marijuana gardens. The damage to the environment is profound. The growers divert water from watersheds and create illegal holding ponds complete with concrete dams. They cut down trees and terrace hillsides. The persons tending the gardens leave vast amounts of garbage and human waste, and they shoot and or poison wildlife that intrude into their camps attracted to their food supplies.
The MET has captured and arrested persons tending these rural gardens, and the Office of the Sheriff has determined that many of these gardens are directly linked to Mexican drug cartels, most notably the Michoacán Drug Cartel. According to the Federal High Intensity Drug Trafficking Area Task Force, nearly 90% of the persons arrested in marijuana grows were from Michoacán. The investigations linking illegal marijuana gardens to these cartels are lengthy and complex.
Lax Regulatory Environment for Dispensaries
There are numerous regulatory gaps pertaining to medical marijuana, which is another significant reason for prohibiting dispensaries in the unincorporated area.
Generally, under the federal Food, Drug, and Cosmetic Act, new drugs must be approved by the Food and Drug Administration (FDA). An application for a new drug must include all labelling information, including dosage and the strength of each dose. Generally, it is the drug manufacturer's responsibility to conduct all required tests to ensure that the drug is safe and effective.
The FDA reviews the application and all attached trials, studies, and tests, as well as the manufacturer's proposed labeling. The FDA process of establishing the effectiveness and safety of a prescription medication is not applied to marijuana. Moreover, neither the state Medical Marijuana Program nor the California Health and Safety Code designate any state or county agency as the authority to regulate dosage or potency. Thus, no federal, state, or local agency is regulating dosage or potency of the active agents in marijuana.
Because the state-issued Medical Marijuana Program ID Card is voluntary and not required to obtain medical marijuana, no government entity verifies that a patient’s physician recommendation is from a licensed physician or that the recommendation complies with the guidelines set forth in the Compassionate Use Act and the Medical Marijuana Program.
Since state law does not consider marijuana an agricultural crop, there are no regulations governing the types and amounts of pesticides or fungicides that can be used, which poses a threat to the environment and to the health of the user. These crops are not inspected for mold, pesticides, pests, or diseases. Consumers have no assurance that the marijuana they ingest is uncontaminated.
Environmental Health does not regulate the “edibles” available at dispensaries including whether edibles requiring refrigeration or hot-holding are stored at proper temperatures nor that proper food-handling is practiced to avoid foodborne disease transmission. Pre-packaged edibles are not inspected to ensure proper labeling including whether known allergens (e.g., nuts) are used and total weight. Packaging is not inspected to ensure that the product is not attractive to children or imitates candy.
Weights and Measures does not inspect and certify the scales or barcode scanners at the dispensaries. Packages are not inspected to ensure they contain the stated weight, measure, or count. Scanners are not inspected to ensure accuracy.
If the Board of Supervisors approves prohibiting dispensaries in the unincorporated area, there would still be a role for the County of Santa Clara to assist the City of San Jose with regulating medical marijuana dispensaries. The Administration believes that it would be productive and important to investigate where the County could contribute to establishing a more rigorous regulatory environment of local dispensaries.
If so directed, the Administration would convene work groups to establish proposed local regulatory functions, staffing and resource requirements, and budgets. In some cases, the cost of proposed services may be recovered through fees and charges.
At the February 25, 2014 Board meeting, the Board of Supervisors approved marijuana suppression grants. In the course of the discussion, the Board of Supervisors requested an analysis by the Administration pertaining to our coordination of marijuana roles and functions.