‘Just common sense’: City council a vote away from allowing cannabis dispensaries to open longer ...Middle East

For years, San Diego’s crop of cannabis dispensaries have had to turn away customers and close their doors at exactly 9 p.m., pushing residents in search of a late-night fix to illicit dealers or open dispensaries in neighboring Chula Vista, La Mesa, Oceanside and beyond.

But the city moved a step closer Wednesday afternoon toward allowing San Diego’s cannabis dispensaries to stay open earlier in the morning and later into the night.

A San Diego City Council committee unanimously backed a proposal to extend opening hours for dispensaries — which supply millions in local taxes — as the city looks for new funding sources to plug its $258 million budget hole.

The longer opening hours are now just one step away from becoming law — depending on whether the city council approves the proposal this summer.

What time do dispensaries have to close in San Diego?

The proposal would extend cannabis dispensaries’ permitted opening times by two hours, from 6 a.m. to 10 p.m. — the same hours of operation allowed in many of San Diego’s neighboring cities and the maximum permitted under state law.

Currently, San Diego law regulates dispensaries more tightly, allowing them to stay open between 7 a.m. and 9 p.m. only.

Longer hours to boost ‘suffering’ dispensary industry, city budget

The extended opening hours would infuse money into a local dispensary industry whose slipping sales and tax revenue have for years disappointed city expectations.

The mayor’s office also expects it to put nearly $1.9 million in the city coffers in the new fiscal year beginning July 1 — a pretty penny for a city government that’s scrambling to fill a budget shortfall. The vast majority of that revenue — $1.7 million — would come from taxes on dispensaries themselves.

Sales taxes paid by dispensary customers make up the remaining amount.

Medical marijuana dispensary lobbyist Phil Rath said San Diego’s tighter opening times have made the city’s “suffering” dispensaries lose many customers to late-night stores in neighboring areas or illegal dealers, who don’t pay the business taxes that dispensaries do to the city.

“Right now, after 9 p.m., all those sales are untaxed and unregulated and really frankly, dangerous, so this is a common sense approach,” said Rath, who represents the San Diego-based trade organization United Medical Marijuana Coalition.

“This is a good leveling of the playing field for the legal business.”

Controversy as city looks to cannabis to fill budget shortfall

While San Diego’s struggling dispensary industry would welcome longer opening times, not everyone agrees. Rath was among nearly a dozen members of the public who clashed over the city’s proposal to increase dispensary access for revenue before the Economic Development and Intergovernmental Relations Committee approved the proposal Wednesday afternoon.

“The city needs a better way to address budget deficits than exploiting people’s weakness for addictive drugs,” Solana Beach resident Peggy Walker urged the committee.

Despite the opposition, numerous members of the committee, including Chair Raul Campillo and Vice Chair Henry Foster III, echoed Rath’s sentiment that longer opening hours were “common sense” for dispensaries, the city and the public.

“Making sure that these retail businesses are open and are equally competitive with nearby locations is something that is just common sense,” Councilmember Campillo said in response to the public’s comments. “It’s going to help those businesses, which is going to in turn help employees, which is going to in turn help our revenue and all the other benefits that come from that.”

Lt. Michael Swanson of the San Diego Police Department told the committee that law enforcement data didn’t indicate increased crime or 911 calls around dispensaries.

‘Bad budget year’ may help dispensaries

Cannabis dispensaries join new trash fees and proposed paid parking at the San Diego Zoo and Balboa Park on the city’s list of solutions to its budget shortfall.

Rath said dispensaries have long advocated for longer opening hours, but the city is finally answering their calls to plug its budget hole.

“That’s exactly why it’s being considered now,” Rath said. “In a bad budget year, a lot more attention gets paid to smaller sources of revenue.”

Even though the city council hasn’t officially made the longer opening hours into law, it’s already factored the tax revenue it expects to draw from the new opening times into its finalized budget for the upcoming fiscal year.

The proposal for longer operating hours comes just weeks after San Diego’s increased business tax on marijuana dispensaries took effect on May 1 — the first dispensary tax hike passed by the city in six years.

The city has for years collected millions in taxes from the dozens of dispensaries that have cropped up across San Diego since the first one opened in 2015. But business has plummeted over the last four years, and with it, city tax revenue has also come short.

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