Creative Commons/HarshLight

San Jose City Hall

An effort to ban medical pot clubs in San Jose failed this evening 

The City Council voted instead to prohibit any more dispensaries from being given business licenses while the city figures out how to regulate the burgeoning industry. There are currently 98 dispensaries in San Jose, according to city officials.

At the same meeting, the council voted to levy a seven percent tax on dispensaries – and implicitly to allow the sale of medical marijuana.

Santa Clara County law enforcement agencies have taken a conservative stance on state law, maintaining that the sale of medical marijuana is illegal.  County narcotics officers have continually raided dispensaries in San Jose and surrounding cities, the latest occurring last week.

The San Jose medical marijuana morass stands in sharp contrast to the situation in other Bay Are cities, like Oakland, Berkeley and San Francisco where dispensaries are regulated and not raided on a regular basis. In Oakland, they are limited to eight; in Berkeley to four.

Monday’s special meeting, which lasted four hours, was called to figure out what to do with the city’s unregulated and uncertain medical marijuana market. Scores of patients testified about the curative powers of pot, but the Council ultimately punted on adopting any specific regulations. Staff had suggested limiting the number of dispensaries to 10 or banning them altogether.

The city of San Jose overwhelmingly passed a ballot measure in November to tax the sale of pot up to 10 percent. And several City Council members took this to be an endorsement of allowing dispensaries. 

“The average voter had some understanding that there would be point of sale,” said Ash Kalra, a San Jose City Councilmember 

But lawyers from the City Attorney's and District Attorney’s offices didn’t see it that way. Frank Carrubba, a deputy Santa Clara district attorney, strenuously maintained that while a group of patients growing pot is legal under the state’s medical marijuana laws, selling it is not.

“People can get together, and they can cultivate marijuana,” said Carruba. “They cannot sell that marijuana to anyone else.” 

City Councilman Pierluigi Oliverio, who is in favor of taxing and regulating dispensaries, quizzed Carrubba during the meeting, asking whether other cities that allow the sale of medical pot were breaking the law. Carrubba conceded “not necessarily.” 

Oliverio then went on to criticize the city and law enforcement for shutting down pot clubs on the rationale that money is changing hands.

“The whole premise was, 'let's close these places down because they're exchanging currency,'” said Oliverio, adding that the implication that a bartering system would be used instead was absurd. “I am not bringing a laptop to the grocery store. I am not bringing a table to the dentist.”

The vote to tax dispensaries included language that acknowledges that money is changing hands at the pot dispensaries.

A late effort to pass a ban on medical pot dispensaries altogether, led by Councilmember Rose Herrera, failed to capture six votes. Instead, the Council decided to stop giving out business licenses to them.

Observers say that San Jose's slow pace at adopting regulations has caused the problems now faced by the city.

“It's the direct result of allowing the problem to fester and not passing regulations,” said Patrick Goggin, a San Francisco lawyer who sits on the city’s medical marijuana task force.