As part of its sweeping public health order, the county has made recreational cannabis dispensaries illegal again. (Photo by Greg Ramar)
When California Gov. Gavin Newsom last month gave the emerald light allowing cannabis dispensaries to remain open and sell marijuana during the shelter-in-place order, Assemblyman Ash Kalra (D-San Jose) saw no reason why Santa Clara County wouldn’t follow the state’s lead.
Instead, local health officials restricted recreational cannabis to delivery-only and in-house sales to medical marijuana users in an effort to promote social distancing and curb the coronavirus outbreak. “That’s when it raised my eyebrows,” Kalra says.
While Santa Clara County’s more restrictive stay-at-home mandate doesn’t necessarily make a distinction between recreational and medical, the county’s decision makers say the general rule is that healthcare operations get to stay open—dispensaries doling out medical marijuana being one of them.
The ruling, which came in a set of frequently asked questions that popped up on the county health department’s website sent shock waves through the South Bay cannabis industry. Dispensaries and advocates argued that the local rule harkens back to a less enlightened era and runs contrary to the will of California’s voters, who overwhelmingly favored legalized recreational marijuana in 2016.
“The differentiation of medicinal and adult-use cannabis doesn’t really exist anymore,” says Chris Lane, chief marketing officer of San Jose-based Airfield Supply. “Anyone over 21 has the legal right to access cannabis. … There’s no other essential business that’s experiencing additional rules and regulations.”
Prop. 64’s passage eliminated the need for medical marijuana cards. But while the number of people with prescriptions dwindled, those needing cannabis for health-related reasons didn’t. Restricting who’s allowed through the doors, Kalra says will strain the still-developing cannabis delivery market.
“The cannabis industry is still in its infancy and facing a number of logistical and fiduciary challenges,” Kalra and state Sen. Jim Beall, a fellow Democrat representing Silicon Valley, wrote in a letter to Santa Clara County Public Health Officer Dr. Sara Cody. “Requiring the industry to build delivery capacity under current circumstances is impractical and runs the risk of driving demand to the underground illicit market.”
Dispensaries have already started to see an uptick in delivery sales. Caliva CEO Dennis O’Malley previously told San Jose Inside that deliveries usually bring in one-third of the company’s sales. “But over the course of the course of the past month, we’ve seen this revenue model shift with delivery offerings now securing about two-thirds of our total income,” he said in late March.
Although delivery sales may be booming, Lane says he has concerns about their ability to make all of the orders. “Even if we combined all the efforts of every dispensary in the Bay Area, there’s not enough supply or capacity to meet the demand,” he said.
Wendy Sollazzi, who heads the San Jose Police Department’s Division of Cannabis Regulation, says they’re running the risk of pot users going back to the black market.
Published: April 18, 2020
Founder & Interim Editor of L.A. Cannabis News