North Bay Cities Take Differing Approaches to Cannabis Dispensaries

Sausalito, Marin County restrict businesses while Santa Rosa aspires to ‘mecca’ status

In 2016, California voters legalized recreational cannabis for adults, setting off a rush of entrepreneurs who wanted to enter the newly legal market.

Legalization was intended to uplift people impacted by decades of cannabis criminalization, but the rollout has not been the same across the state. Local governments are allowed to decide whether to allow cannabis businesses to operate, resulting in a complicated patchwork of regulations.

Cannabis industry-insiders often argue that the extensive permitting processes and regulations lock out many of the people legalization was meant to help, leaving the business opportunities to those with the money and political savvy to reap the benefits of legalized weed.

A version of this dynamic is playing out in the North Bay. While Santa Rosa, Sonoma County’s largest city, has embraced cannabis businesses as a new tax revenue source, Marin County and its cities have hindered the spread of brick-and-mortar weed businesses.

Marin County

It’s ironic that Marin ordinances ban recreational cannabis storefronts, as the county lays claim to being the home of the first licensed marijuana dispensary in the nation. The Marin Alliance for Medical Marijuana opened in Fairfax in 1997, a year after California passed Proposition 215, an initiative which legalized medical marijuana.

Federal laws, however, prohibit the sale of marijuana, and owner Lynnette Shaw was forced to close the dispensary in 2011. Shaw fought the federal government for the right to stay in business.

“I spent 20 years in court as the test case to stop the marijuana industry,” Shaw said. “My case was the make-or-break. And I won.”

Shaw reopened the medical marijuana dispensary in 2017, in the same Fairfax office building it previously occupied. Now called the Marin Alliance Cannabis Buyers Club, it remains the only in-person dispensary in Marin County, although several cannabis businesses provide delivery service to residents.

That status could change in November 2022, when Sausalito voters decide whether to allow one recreational cannabis storefront and one delivery operation within the city limits. Sausalito’s local ordinances prohibit all cannabis businesses; however, sponsors of the ballot measure did an end-run by collecting signatures from 10% of the electorate, forcing the city to act. The City Council could either allow the cannabis businesses to open, or they could pass the issue to voters.

In a 3–2 vote in July, council members placed the measure on the ballot. The close vote seems to reflect the sentiment of Marin residents, who are divided about whether recreational cannabis businesses belong in the county.

The ballot measure was sponsored by Sausalito resident Karen Cleary, one of three owners of Otter Brands, a company wanting to open a retail cannabis dispensary in Sausalito. The other two proprietors are Sausalito CrossFit owner Chris Monroe and Seattle resident Conor Johnston.

Johnston is no stranger to politics. Formerly the chief of staff to London Breed when she was president of the San Francisco Board of Supervisors, he also served as the strategy advisor on her mayoral campaign. Today, Johnston owns Berner’s on Haight, a cannabis dispensary in San Francisco. He has been courting Sausalito officials and residents since 2018 on behalf of  Otter Brands.

Surely, Otter Brands proprietors had their eye on the prize when they crafted the very specific provisions of the ballot initiative. For example, the measure requires that prior to April 20, 2021, the applicant must have expressed interest in opening a storefront cannabis retail location during a City Council meeting, met individually with at least three city council members and hosted at least two community meetings. Otter Brands has met all these conditions and the many others listed in the measure.

“Otter might as well have put their name on the ballot initiative,” Laurie Dubin, a Larkspur parent, said.

Dubin belongs to several local organizations opposing recreational dispensaries, including Marin Residents for Public Health Cannabis Policies. Concerns center on the high THC potency of the products, the commercialization of the industry and cannabis use by youth.

For recreational marijuana, a person must be at least 21 to enter a dispensary. Anyone 18 or older with a medical marijuana ID card may also cross the threshold. However, Dubin maintains teens purchase cannabis products with fake IDs. She also fears that if the Sausalito initiative passes, it will open the door for ballot measures throughout Marin. Stores will pop up everywhere, she said.

Johnston claims licensed dispensaries have no impact on teen usage, citing a 2021 study by D. Mark Anderson of Montana State University. Regulating cannabis is the safest path forward, according to Johnston.

Getting the measure on the Sausalito ballot has been a significant undertaking for Johnston, a four-year process by the time of the election. Johnston says he has no plans to do it elsewhere in Marin.

“Eventually, this is all going to seem quaint,” Johnston said. “San Rafael and Novato and other towns in Marin will have dispensaries.

Sonoma County

After recreational weed was legalized, Santa Rosa aspired to become a cannabis hub.

The idea seems obvious enough. Producers in the historic Emerald Triangle would ship their product down Hwy 101 for quality testing and manufacturing in Santa Rosa, before the products were sent south to dispensaries in the Bay Area or Southern California.

By May 2018, just over a year after the market opened up, 38 companies had applied for retail permits, though only three were immediately approved. A total of 44 other companies vied for open distribution, manufacturing, testing and cultivation within city limits by May 2018, according to a city report from that year.

The sudden demand for industrial warehouse space caused rents to spike from around $1.00 per square foot to $2.00 per square foot in one year. Today, the city of approximately 175,000 has 12 licensed dispensaries operating within city limits with a few more in the pipeline, Kevin King, a city spokesperson, says. 

In 2017, both Sonoma County and Santa Rosa voters passed tax measures targeting cannabis businesses. Last fiscal year, Santa Rosa brought in nearly $1.9 million in tax revenue from the budding business sector. The majority of the money, almost $1.1 million, came from dispensaries.

Eddie Alvarez, the owner of The Hook dispensary who was elected to the Santa Rosa City Council last year, has been involved in the cannabis industry for decades. Alvarez argues that lowering the economic barriers to entry into the legal market is a form of equity. But now, with cities across the state competing for cannabis business, Alvarez fears that Santa Rosa’s role in the state’s cannabis industry is slipping.

“For the longest time, I saw Santa Rosa as the mecca of mota. I don’t know where it happened down the line, but Los Angeles started being progressive in their stance, and I saw it slip away from us,” Alvarez said, using a slang term for cannabis.

The most obvious marker of the change came this May when the Emerald Cup announced it would move its 2022 awards event, long hosted in Santa Rosa, to Los Angeles. The group will host a separate annual event, the Emerald Cup Harvest Ball, in Santa Rosa starting this December. Still, the announcement suggests there’s a new “mecca” for cannabis.

“The tribe has spoken and we are making the move to bring our Cup to the world’s largest cannabis community and industry – Los Angeles,” the Emerald Cup’s May announcement states in part.

EDITOR’S NOTE: Paragraph 16 has been updated to reflect the fact that customers 18 and older can purchase cannabis from dispensaries if they have a valid medical marijuana ID card. The final paragraphs of this article have been updated with additional details from the Emerald Cup’s May 2021 announcement.

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