Santa Rosa unlikely to revisit density rule for growing number of marijuana stores until 2020

When Santa Rosa approved its current rules governing the cannabis trade, it planned for the possibility that pot stores might want to operate on the same block, raising concerns about the density of outlets offering marijuana for sale to adults.

So the city's first bid to regulate cannabis businesses, beginning in January 2018, barred pot shops from operating within 600 feet of each other. A preliminary review process was established to winnow out stores that could violate the density rule.

Twenty-one proposed stores concentrated in seven areas were flagged as a result, with only 10 moving forward to join 13 other new planned shops that the city has approved in the past 15 months. In total, Santa Rosa could see at least 23 new marijuana retailers resulting from its first wave of applications. It also has three dispensaries that opened in the medical-marijuana-only era; one of those is relocating and earned city approval for its new site.

The second wave of applications is set to begin in June, city planning staff said last week.

All the while, many are displeased, both within the cannabis industry and within the ranks of neighboring residents, businesses and schools, by the city's process and rules governing where pot shops can locate.

City officials have been exposed to those complaints on multiple occasions over the past year. The feedback comes as Santa Rosa seeks to both carve out a welcoming space for cannabis commerce - and the tax dollars it could bring - while safeguarding neighborhoods and reassuring existing businesses.

Still, the three City Council members who drive cannabis policy last week stopped short of any substantive changes to the 600-foot buffer Santa Rosa requires between new pot shops. The same setback applies to proposed cannabis outlets and schools.

The panel, composed of Ernesto Olivares, Chris Rogers and John Sawyer, agreed to consider a different way of evaluating proposals in the same vicinity but punted on any revision of the buffer, following the recommendation of city officials who said they lacked the data and experience needed to put forward an alternative. They suggested the panel revisit the issue in a year.

Any changes to the rules will come too late for Justin Miranda, the former proprietor of Highway 420, a medical-marijuana delivery company on Sebastopol Road that also included clothes and art for sale and a recording studio. Miranda applied to expand his business into a retail store, after Santa Rosa decided to allow only brick-and-mortar dispensaries to operate cannabis delivery services.

Miranda faced competition: A well-funded outfit called Phenotopia, which applied to sell cannabis in the Dutton Plaza strip mall across the street - within the 600 feet of Miranda's property.

The two were pitted against each other at a March 12 City Council hearing that turned into one of Santa Rosa's more contentious cannabis discussions to date.

The City Council voted 5-1 in favor of Phenotopia, but several council members bemoaned the choice.

“It's clear from these hearings tonight that we have two good applicants and have inadvertently created a problem that the market could and should address,” Councilwoman Victoria Fleming said March 12 at the hearing.

A frustrated Miranda, reached Friday while on a cross-country road trip, said he has laid off his employees and closed up shop.

His view of the outcome is stark: another Latino-owned Roseland business losing out to a white-owned company without ties to the neighborhood.

Miranda noted that he could have moved to another city or county with more lenient rules and continued to deliver cannabis in the city, but he wanted to maintain a storefront in Santa Rosa. The March hearing took away his faith in local government, he said.

“I did everything they told me to do,” he said. “That's what hurts so much. I could have gone to Marin, but I didn't. I tried to do the right thing for my hometown.”

Rogers and Sawyer could not be reached late Saturday night to offer a response on Miranda's view of his case and the socioeconomic disparity he says was exposed in the outcome.

Miranda also criticized the city's scoring process in which three staffers scored proposals on the basis of compliance with local and state regulations, neighborhood impact and ability to run a cannabis store.

City staffers who evaluate cannabis proposals posing density concerns gave Phenotopia higher scores than any other applicant, and well higher than Highway 420. Even then, Miranda's application was initially favored despite city staff recommending Phenotopia.

Phenotopia appealed to the City Council and hired several lobbyists. It bused supporters to City Hall for the March 12 hearing, giving them sandwiches, water bottles and purple shirts. After a lengthy hearing, Phenotopia secured the council's approval.

Blair Gue, an attorney who represented Phenotopia at the March 12 hearing, said Friday in an email that the company was “satisfied with the detailed review conducted by city staff and plans to open its doors as soon as practicable” once it secures final local approval and a state license. She said Phenotopia supporters were not compensated for their turnout at the hearing.

The scoring by city staff was the top reason cited by the council members who voted for Phenotopia. Olivares, the only council member who voted in favor of Miranda, said he thought some aspects of Highway 420's scoring should have been higher when it came to its impact on the neighborhood and Miranda's stated willingness to act to prevent any conflicts.

“Hopefully, we'll find a better way,” Olivares said at the March 12 hearing.

And last week, Olivares, Rogers and Sawyer agreed with plans put forward by city officials to end the disputed scoring system.

The new short-term plan endorsed Thursday would vet for density concerns earlier in the process, said Clare Hartman, the city's deputy planning director. Starting June 3, applications will be processed on a first-come, first-served basis.

But long-term, revision of the 600-foot rule is a necessary step toward treating cannabis sellers like other retailers, Olivares said Thursday, adding that he felt safer entering a dispensary than he did going into a liquor store.

Sawyer brought up the example of two dispensaries seeking to operate within 600 feet of each other, but on opposite sides of a highway, as a situation that calls out for some leeway. Rogers noted that the city's cannabis regulations would likely be in flux for the foreseeable future.

“I think this is going to be a consistent conversation for the next five, six years in Santa Rosa,” Rogers said.

You can reach Staff Writer Will Schmitt at 707-521-5207 or will.schmitt@pressdemocrat.com. On Twitter @wsreports.