Business & Real Estate

Mtn. View council blazes forward with cannabis zoning

The Mountain View City Council largely signed off on preliminary plans to license and zone cannabis retail within the city earlier this month, a move that could make it one of the first cities on the Peninsula to join San Jose in permitting recreational marijuana shops later this year.

The city’s staff recommended a lottery-based approval process for selecting shop operators, citing the intensive volume of applications received by some cities, a desire for fairness and the need to not violate land-use requirements that bar favoring any one specific applicant based on his or her perceived characteristics. At their May 8 council meeting, council members questioned how a streamlined permitting process could still privilege applicants that appeared to demonstrate prior experience or other signals of likely future success, but overall supported the staff’s proposed approach.

A divided council, with some members absent, came down 3-2 over several considerations, including how large a buffer to establish around schools and whether to consider a residential proximity buffer. They also differed on whether to cap the number of retail shops under consideration. Suggestions ranged from one to two stores within Mountain View to no cap at all.

Mayor Lenny Siegel said he was interested in a “permissive” approach and questioned why the city should stigmatize cannabis retail more than other commercial activity. He was also in the majority of members who supported a 600-foot buffer around schools.

“In terms of retail stores, where nobody’s smoking, we aren’t talking about opium dens,” he noted.

Council members Chris Clark and Pat Showalter also supported the staff-recommended buffers.

Councilwoman Margaret Abe Koga, who with Councilwoman Lisa Matichak consistently voted for more restrictive approaches, said she was concerned about access by young people, noting that cannabis wasn’t the only substance to have proximity limitations for retail.

“In light of the fact that there’s a consideration of being within 1,000 feet for tobacco … I don’t see why tobacco should be at 1,000, but not cannabis,” she said.

San Jose zoned its 16 registered retail locations for industrial areas or on second-floor locations in the downtown commercial district, and required a 1,000-foot buffer from schools, day care or community centers, and libraries. A similar buffer in smaller Mountain View would rule out much of the city’s land from consideration.

Next steps

In addition to formalizing zoning and license requirements for retail, Mountain View must determine how and whether it will impose a local tax on cannabis.

On a statewide level, California taxes cannabis cultivation and levies a 15 percent excise tax on its sale. Cannabis retail is also subject to the state’s sales tax and any relevant local sales taxes. State cultivation, excise and sales tax income has totaled nearly $60.9 million since recreational sales became legal Jan. 1. Medical cannabis is exempt from sales tax for buyers with a valid medical card.

To levy a local sales tax on cannabis, cities must secure direct voter approval. Beginning in 1978, California voters amended the constitution several times to require voter approval of new local tax increases. San Jose, the first local city to legalize retail, is unusual in having passed a local measure in 2010 that preauthorized such a tax, pegged at 10 percent or less of gross receipts. That city’s voters approved the measure with 78 percent of the vote. Campbell held a special election in 2017 to authorize a similar tax, with nearly 85 percent of voters approving.

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