Pot shop hopefuls begin process Thursday

A new era in San Diego’s approach to medical marijuana begins Thursday morning when the city starts accepting applications from people seeking to open dispensaries under complex new regulations approved in February.

Long lines are expected at City Hall because applicants are eager to secure the limited number of dispensary permits allowed under the rules, which will make selling medical marijuana legal for the first time in San Diego.

Applicants won’t be receiving permits Thursday, only launching a multi-step approval process expected to take six months or more and cost as much as $100,000 per dispensary.

Attorneys working for several applicants said this week that their clients are grateful the city is giving them a chance to legally open a dispensary, but that they perceive the approval process as especially daunting and complex.

Finding potential dispensary sites that meet a long list of city criteria has been the No. 1 hurdle for many applicants, the attorneys said.

Dispensaries can only open in a limited number of commercial and industrial zones, and they must be at least 1,000 feet away from schools, playgrounds, libraries, parks, churches and facilities focused on youth activities. They also can’t be within 100 feet of residential property.

“A lot of people think they’ve found the perfect spot, but then they find something that disqualifies it,” attorney Kim Simms said. “The areas where they’re allowed are scattered and securing the right property within those areas is hard.”

There have also been questions about what qualifies as a facility focused on young people, or a “minor-oriented facility” as the city ordinance describes it.

The attorneys said applicants don’t know whether a site is ineligible if it’s within 1,000 feet of batting cages, driving schools or tutoring centers where adults are the primary clients.

City officials said Tuesday that such situations will be handled case by case.

“We just don’t know how the city will interpret it,” said Lance Rogers, an attorney working with several applicants who’ve previously operated local dispensaries.

The ordinance also allows a maximum of four dispensaries in each of the city’s nine City Council districts, so only 36 could open citywide even if eligible sites can be found.

Another problem is finding landlords willing to lease space at a reasonable rate to dispensaries, which could be unpopular with other tenants and nearby residents.

“We’ve seen landlords ask for not just above-market rents but as much double or triple,” Rogers said. “The landlords are going to make a killing because the scarcity of eligible properties has given them lots of leverage.”

Rogers said another factor has been several investment groups from places outside San Diego, such as Colorado and Los Angeles, trying to secure properties so they can submit applications.

“We’re in a foot race with groups from all over and they’re throwing a lot of money around,” Rogers said. “Many local businesses are being shut out.”

Simms agreed.

“Many of my clients feel like they’ve been on the front lines of this issue in San Diego and that outsiders are snapping up the eligible properties,” she said.

The attorneys said costs have also been a challenge.

In addition to securing a lease and setting aside money to remodel a site, applicants will have to pay the city many thousands in fees for hearings and for staff time spent vetting applications.

Each applicant must provide the city nearly $9,000 Thursday morning, with that number expected to climb quickly if their initial paperwork is deemed complete.

The second step in the process includes city officials determining the eligibility of the proposed site and whether the applicant has satisfied a long list of other criteria.

If so, a public hearing officer in the city’s Development Services Department will be scheduled to hear the case. If the applicant is approved, opponents have 10 days to appeal the ruling to the Planning Commission for a subsequent hearing.

City officials said Tuesday that the length and complexity of the process makes it highly unlikely that being first in line Thursday will give any applicant a significant head start. But they’ve doubled security for Thursday morning because they expect a long line of people waiting when planning officials begin passing out numbers at 6:30 a.m.

Mayor Kevin Faulconer said Tuesday that the rules strike a balance between providing access to medical marijuana and protecting residents.

“The start of the permitting process for medical marijuana dispensaries is a huge step forward to providing safe and reliable access for patients in San Diego,” he said. “The rules put in place also protect our neighborhoods by clearly defining where these new shops can be located.”

david.garrick@utsandiego.com (619) 269-8906 @UTDavidGarrick