Endorsement: Measure Y seeks to replace city cannabis ordinance

Sonoma voters on the Nov. 3 ballot will be asked to determine the direction of the city’s retail cannabis future – a question that just two years ago would have seemed absurd given the then-city council majority’s reluctance to allow commercial pot shops to operate in Sonoma.

Ironically, it was that very refusal to OK retail cannabis dispensaries in town —despite 64 percent of city voters approving of Proposition 64, the 2016 state initiative that legalized marijuana throughout California — that led to this election’s Measure Y, aka the Personal Cannabis Cultivation Initiative.

Here’s the backstory: In summer of 2018 when the council voted against allowing dispensaries in town, Sonoma resident and would-be dispensary operator Jon Early staged a successful signature drive to place a pro-dispensary measure on that November’s ballot. But prior to OK’ing the measure for the ballot, the council called for a $25,000 independent analysis of its potential impacts to the city – a stall tactic from a resistant council that pushed it passed the deadline for the 2018 election, kicking what would become Measure Y two years down the road to where we are now.

Voters should note that the council’s 2018 delay tactic of an “independent analysis” of the measure was clearly intended to keep it off that year’s ballot – to deny a public vote on it, apparently out of fear it might pass. The only reason the council would have sought an analysis of the measure would be if they were considering approving it as an official city ordinance prior to the vote – which, they made perfectly clear, none of them were willing to do.

As it happens, the election of Sonoma resident Logan Harvey in 2018 tipped the council in a pro-dispensary direction, which then developed its own commercial cannabis ordinance. That ordinance, which passed in 2019, allows for the city to license a single walk-in dispensary and a single delivery-only dispensary. After winnowing down to a handful of final applicants for the lone walk-in dispensary, the council in August awarded the highly prized license to Sparc, a company with dispensary roots in San Francisco and a grow operation in Glen Ellen. As part of the deal, Sparc must pay its employees a living wage, allow them to organize and provide other “community benefits” — benefits that opponents say would not be required of other dispensaries under Measure Y.

So, now, instead of Measure Y seeking to replace an ordinance that allows for zero storefront dispensaries in town – as was the case during the 2018 signature drive – it now seeks to replace an ordinance that allows for one storefront dispensary. How things change in two years.

Both Measure Y and the city’s current ordinance allow for limited indoor cultivation as well as other cannabis-related interests such as testing and manufacturing.

While there are notable differences in how the ordinances treat cultivation – Measure Y would allow six indoor plants per adult, but doesn’t allow outdoor growing; the current city ordinance limits it to six indoor plants per residence and three outdoor plants – what’s really at play here are dispensaries. And the question is: Will Sonoma have just one council-approved choice, or more than one?

Measure Y opponents highlight the fact that the initiative doesn’t cite any limits on the numbers of dispensaries allowed. Though it’s worth noting that the independent analysis of the measure funded by the city in 2018 shows that, given its required distances from some schools (it can open by private preschools) and residential-zoned areas, there would be only about five viable locations for any dispensary under Measure Y in Sonoma.

Does that mean a vote for Measure Y is a vote for five dispensaries? Hardly.

As much as some Valley residents (and tourists) enjoy an occasional toke, the financial viability of retail cannabis in a town of this size has its limits. But a likely scenario if Measure Y passes is that Sparc’s planned dispensary at 19315 Sonoma Highway – the site of the former El Gallo Pinto restaurant – is joined by at least one more dispensary at 865 W. Napa St., the site of the former Community Café, which has long been identified as a potential suitable location for walk-in retail cannabis. The runner-up applicant for the city’s single dispensary license, Justice Grown, had identified this site in its application.

As Measure Y would not require dispensaries to be permitted by the city, opponents are quick to call out Y’s alleged lack of city oversight. In his impartial analysis of the measure, City Attorney Jeff Walter wrote, “No provision is made for the city or the community to examine and mitigate, in advance of their opening, such businesses’ impacts on the community and the environment.”

The city’s current ordinance requires a rigorous vetting of operations, with detailed proposals from applicants, a city review committee, promises of “community benefits” from the applicant and a whopping non-refundable $11,000 application. (Such requirements aren’t unique to Sonoma, by the way, as many cities that allow cannabis shops also demand they adhere to stricter regulatory requirements than other “high risk” businesses such as jewelry shops and bars.)

Measure Y supporters, however, argue that such city imposed regulations place an unfair burden on the cannabis industry, when other local businesses aren’t required to woo the council in such a way. “Measure Y businesses will not go unregulated,” the ballot argument in favor of Measure Y states. “They will be fully vetted and regulated by the State of California.”

Some city officials, just as some residents, still approach cannabis from a pre-legalization mentality – the idea that some pot shops are run by rascals, staffed by burnouts and patronized by ne’er-do-wells. Fair or not, it’s a perception that exists, and accounts for why many cities place such permit restrictions on the industry.

That said, perhaps the new mentality should be that legalized cannabis dispensaries are potentially lucrative businesses managed by savvy entrepreneurs.

That, at least, is the signal we get from Sparc, which seems to be doing what it can to hold onto the retail-cannabis monopoly it potentially has under the city’s current cannabis ordinance. Two of the five signees of the “rebuttal argument” against Measure Y on the ballot have business relationships with Sparc – Mike Benzinger sells his biodynamic cannabis to Sparc; Michael Coats handles Sparc’s public relations in Sonoma. Coats was one of Measure Y’s most vocal supporters during 2018’s signature drive, but has since changed teams.

Another ballot-argument signee against the measure is Sonoma City Councilmember Rachel Hundley, whose spouse Sean Hamlin was contracted in September to manage a “No on Measure Y” campaign by a group calling itself Sonoma Residents for Sensible Cannabis Access. Hundley’s link to the No on Measure Y campaign raised eyebrows among campaign watchdogs, as a final city council vote on granting Sparc its commercial cannabis license takes place Oct. 5. At press time, Hundley informed the Index-Tribune that Hamlin would in fact not be taking part in a No on Measure Y campaign and that the group Residents for Sensible Cannabis Access was no longer a planned entity.

And as for the ballot “rebuttal argument” in favor of Y? It was signed by Early and former City Councilmember Ken Brown, whose group Justice Grown was runner up for the single license that went to Sparc – and would be a likely contender to open at the former Community Café location on West Napa if Y passes.

In other words, voters take note: The loudest voices in the Measure Y debate may have the biggest financial interests in its outcome. Welcome to politics, Sonoma.

The bottom line: Both Measure Y and the city’s current commercial cannabis ordinance are flawed. Measure Y was written two years ago in response to a city that had no allowance for commercial walk-in cannabis – which, now, is no longer the case. The city now allows one.

Yet, that is also the primary flaw in the city’s ordinance – that the single license creates a monopoly on a trade Sonoma seems to overwhelmingly want.

In a recent interview with the Index-Tribune, Michael Coats argued that a second dispensary beyond Sparc’s would result in neither additional commerce nor tax revenue for the city.

“That’s not how the cannabis business economy works,” said Coats. “You want to divide up the pie? It’s still a pie.”

We’re not convinced that’s true. That argument doesn’t hold for restaurants, wine tasting rooms, or myriad other recreational and tourist industries in wine country that seem to flourish when their collective numbers increase.

To that, Sonoma voters should be concerned about a lack of market competition in the state’s most burgeoning industry. It’s a concern that didn’t bypass the city council during this summer’s selection process for the single cannabis license – as more than one council member inquired with staff about the possibility of expanding the ordinance to allow for two storefront dispensaries. One gets the feeling that if the council were to go back and do it all again, they would develop an ordinance allowing for at least two storefront dispensaries – providing market competition, consumer choice and added tax revenue to Sonoma’s post-Prop. 64 reality.

This is one of those rare cases where neither choice is ideal. If Measure Y passes, Sonoma will have more retail cannabis choice and potentially better pricing, but those operators may not share the values and community spirit for which Sonoma is famous. If it fails, Sonoma will have one highly-vetted choice in Sparc, which may have to pass all of the added costs required by the current ordinance in Sonoma on to consumers. Ultimately, it will come down to what consumers value most.

For us, it came down to the city attorney’s report. While arguably the current ordinance goes too far in limiting cannabis commerce, there is a reason nearly every city in the state requires additional oversight of marijuana-based businesses. The unknowns associated with the total lack of oversight on new dispensaries seems potentially problematic. While we can understand and agree with arguments on both sides, tepidly the Index-Tribune recommends No on Measure Y.

Jason Walsh, editor & associate publisher

Emily Charrier, publisher

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