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SWEET MEDICINE: Manager Gus Donowho (left) with patient and spokeswoman Erika Taylor Montgomery (right) at the San Jose Cannabis Buyers Club, with a variety of 'edibles,' including lollipops, brownies and snickerdoodles.

Regulating Medi-Pot In San Jose

Oliverio's plan would zone and tax medical marijuana clinics, and use the money for cops and roads

By Jessica Fromm

IN San Jose, people who rely on a doctor-prescribed puff of pot to relieve pain must hit the highway, and drive to a medical marijuana dispensary in San Francisco or Santa Cruz, or else hit the street, and buy a bag from a dealer. City Councilmember Pierluigi Oliverio has a plan designed to help relieve cancer patients' pain, and also make the city a mint in sales taxes.

Oliverio released a memo last Tuesday proposing that San Jose adopt an ordinance to regulate and tax the cultivation and sale of medical marijuana.

The memo, which the District 6 councilmember will discuss at this Wednesday's Rules Committee meeting, asks the council to discuss allowing medical cannabis establishments in specifically zoned locations within the city.

It also outlines his proposal for the taxation of doctor-prescribed uses of pot, most notably that all tax revenue generated would be earmarked for the Police Department and street maintenance.

"It has become increasingly clear that the use of cannabis for medical purposes has gained legitimacy in our culture," Oliverio says in the memo. "It's important that San Jose establish its own set of guidelines for medical cannabis collectives, since the state and federal governments have already determined the legal parameters for municipalities."

The proposed ordinance would include a minimum 3 percent "cannabis business tax" and a $10,000 cost for permits, which is higher then other cities that allow medical marijuana. It also puts forward strict zoning regulations for both the cultivation and the sale of medical pot and a limit to the number of dispensaries. No on-site consumption would be permitted.

Oliverio says that the issue of medical marijuana struck a personal note for him, and that was his primary driver for presenting the ordinance.

"What really struck it for me was talking to my friends, when they had a relative that was sick and dying, and the doctor said, 'Well, you should get some marijuana,' and when they asked 'Where should I get it?' and they were like, 'Oh, you should get your niece, nephew, son or daughter go buy some for you,'" Oliverio says. "That puts people in an uncomfortable position to have to go buy something illegal for a loved one who needs it. At the same time, you're benefiting organized crime.

"You've got a million people here in San Jose, and there are a certain percentage of those people who have these needs. Myself, I've had seven friends my age or younger die of cancer," he says.

Denelle Fedor, Oliverio's chief of staff, pointed out that the councilmember's proposed ordinance is similar to those adopted by several other cities, with the addition of the higher taxes and use fees.

San Francisco has 30 operating medical marijuana dispensaries, and Oakland has four, while in Los Angeles, more than 500 have sprung up all over the city. A moratorium on pot dispensaries in L.A. was voided in court last week.

Clinic Says 'Yes'

San Jose's only operating pot club, the San Jose Cannabis Buyers Collective (SJCBC), opened up a little over three months ago across from Valley Fair Mall. SJCBC spokeswoman and patient Erika Taylor Montgomery says they already have 1,300 patients and growing.

"It shows that there is a tremendous need here in Santa Clara County," Montgomery says. "Otherwise, patients have to go to Oakland, and to Santa Cruz or to San Francisco in order to buy their marijuana. That's expensive travelwise, and it's dangerous to have people with serious medical conditions on the road."

Montgomery says that she and SJCBC owner Dave Hodjes will be at Wednesday's Rules Committee Meeting to show their support for Oliverio's initiative. She says that they and representatives of Americans for Safe Access will testify to their experiences and those of their patients.

Oliverio's memo mentions that the city of Oakland passed Measure F this July, raising the tax on "cannabis business" to $18 per $1,000. This is expected to bring in an additional $330,000 of revenue to the city in 2010. Oliverio suggests that San Jose follow the policies of these cities so that we don't continue to lose a huge potential city money generator.

"I recommend that the fine be high for any unlawful use so that the penalty acts as a deterrent," Oliverio writes in the memo, suggesting a minimum $1,000 fine for doctors and patients who are caught abusing the ordinance. "Then, and the most important, that in a time of health care crisis, San Jose has the opportunity to [do] its part with allowing the provision of having regulated, legal locations for those who need medical cannabis."

According to the memo, all taxes, fines and fees associated with the ordinance would go to the SJPD and street maintenance.

"So many times the city can make money, and everything goes into the general fund. There's no earmark, so everyone has to compete for the same pot of money," Fedor says. "Street maintenance and the police are always number one and number two, on any survey, district by district. So it's important to help fund those things that people care about most."

Montgomery says that the SJCBC has paid $13,000 to the city in sales taxes just last week. "That's revenue that a club like this can bring," she says. "It can be a financial boon for a city that's in a financial crisis."

Because there are currently no pot club rules in place on the city level, Hodjes has made sure that SJCBC operates under a strict regulation and patient prescription approval policy, Montgomery says. They currently only accept people 21 years or older, require prescription and identity verification, and have instituted a two day waiting period for people to buy their pot.

"That way they manage to eek out any party-night purchasers, people who think they can just come into the club and borrow somebody's license, and get a good high for their night," says Montgomery. "SJCBC wants to stay above board to make sure they are serving the people, serving them the right way and not causing any problems."

Legalize and Legislate

The City Council has gotten several requests from citizens wanting to open up additional medical marijuana facilities recently, Oliverio says. According to him, this new ordinance is all about being pragmatic.

"Look at L.A., who has 500, and half of those aren't even licensed. So, you can put your head in the sand, but it's going to happen," Oliverio says. "We either do it now and be pragmatic, or we can wait until we have them popping up all over town and popping up where we don't want them and concentrating. Listen, we spend an inordinate amount of time doing other ordinances, at least this one helps people and it brings in revenue."

Montgomery says that the San Jose Police Department did stop by SJCBC on one occasion after they opened, asking to see their permits and business license. She says that Hodjes was happy to comply, and the cops left without incident.

"He wants to run his business 110 percent legitimately, and he has so far," Montgomery says. "Right now he knows that there are no rules in place, and he feels that that's dangerous for them and the city. He wants to be on the forefront of working with the city to help put those guidelines in place. He'd love to work hand in hand with the mayor on this."

Oliverio cites the Obama administration's stance on the use of medical marijuana, 1996's California Proposition 215, the "Compassionate Use Act," and 2004's Senate Bill 420.

Attached to the memo are California Attorney General Jerry Brown's 2008 "Guidelines for the Security and Non-diversion of Marijuana Grown for Medical Use," and the Deputy Attorney General David W. Ogden's Oct. 19, 2009, memorandum "Investigations and Prosecutions in States Authorizing the Medical Use of Marijuana."

Oliverio says he expects a supportive response when he delivers it to the Rules Committee on Wednesday.

"People can make jokes when they think about Zig Zags or bongs, but in the end, it's about nobody wishing chemotherapy treatment on any of their enemies. It's such a terrible process to go though, nobody wished for HIV, AIDS or multiple sclerosis. And what's the alternative, pharmaceuticals that are just as, and probably more, destructive then anything else?" Oliverio says. "I believe that there are a lot of people who believe in the cause of medicinal marijuana that is prescribed by a doctor for those who are in pain, and that is the primary thing."

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