Alameda attracts little interest from cannabis businesses

ALAMEDA — Cannabis businesses have shown little interest in operating here in the wake of the city adopting regulations on their use.

Among the reasons? A lack of suitable space to purchase or rent, and the fact that state regulations regarding cannabis are still being hammered out, leading to uncertainty within the industry.

“They’re rolling them out slowly,” Lois Butler, Alameda’s economic development manager, told the City Council about state laws July 24, when it reviewed local regulations. “They’re very complex, and companies have to be capitalized to be nimble enough to implement changes.”

Adding to the uncertainty, Butler said, is that cannabis remains illegal under federal law and that enforcement actions may take place, despite local ordinances or state laws.

Alameda’s cannabis rules took effect Jan. 18, and were crafted after California voters approved recreational use of the substance in November 2016.

The city caps the number of dispensaries at two; nursing or cultivating places at one; testing labs at two; and the number of manufacturing facilities at four. Cannabis businesses also must be located at least 1,000 feet from schools and other places where young people gather, such as recreational centers.

Since the local rules kicked in, however, just one cannabis business appears on track to open in Alameda: Main Street Supply, a medical dispensary, is looking to operate on Webster Street in the city’s West End.

One individual expressed interest in opening a nursery in town, but could not find a suitable location beyond the 1,000-foot buffer zone, Butler said. Three inquires about opening a testing lab each fell through, and no one submitted a formal “letter of interest” for operating a manufacturing business, she said.

“We don’t have a logjam to break here,” Councilman Frank Matarrese said. “We have a lack of interest.”

Matarrese said he believed the possibility of a federal crackdown was a key reason why some are cautious about getting involved in the cannabis industry.

“That goes not only with the operator, but with the city’s liability,” he said.

Mayor Trish Spencer said the city’s regulations may be too restrictive.

“We have so many barriers, it’s actually unfriendly,” said Spencer, a strong supporter of medicinal marijuana whose position was showcased in a video produced by “Alameda For Safe Cannabis Access,” a local advocacy group.

The council took no formal action during its semi-annual review of the city’s cannabis rules.

But it asked city officials to come back with possible tweaks, including reducing the buffer zone to 600 feet in some places, removing the limit on the number of testing labs and possible zoning changes to make more areas available to cannabis businesses.

Serena Chen, a Bay Farm Island resident who said she has campaigned for 23 years against tobacco, questioned why the council was even looking at revising marijuana ordinances.

“The reason why you set up the provisions that you did is because you listened to the community that came six months ago to talk about protecting our youth,” Chen told the council. “So, what data has changed in terms of that rationale tonight, that you would want to reverse some of those protections?”

Spencer said she considered cannabis as different from tobacco.

“There is no benefit, I know of, from smoking cigarettes,” the mayor said. “Whereas, cannabis, many of us believe, has medicinal and/or healing properties.”

Other speakers called for the city to clear the way for the recreational sale of cannabis and for more community involvement as the city reviews businesses from the industry looking to open in town.

The council is expected to take up the issue again in October, when it will also gather more public input before approving any possible changes to the local ordinances.