The City Council shot down an effort to amend the city’s cannabis ordinance when it tabled a motion that would have changed the law to allow up to three dispensaries — not one — to operate in each of the city’s seven council districts.
The city received 41 letters opposing the changes and one letter in support of the amendments — including changes to the distances such businesses must be located from schools, libraries, churches and residential neighborhoods — which were proposed by City Manager Steve Mermell.
“I strongly oppose the proposed zoning code amendments to the city cannabis regulations,” said Jane Laudeman in a letter to the council. “Pasadenans voted to allow one dispensary per district.”
The changes would have allowed Harvest of Pasadena, Atrium and SweetFlower to sell cannabis in District 3 in and around Old Pasadena, the city’s culinary and entertainment hub.
Atrium, whose application was approved, and WOW Wellness, which did not make the cut, both have filed lawsuits against the city. In their suit, WOW claims the selection process was fraught with fraud and corrupt actions.
“We have a litigious society,” said Mayor Terry Tornek. “The competitors are trying to knock out the opposition using litigation and the appeal process as vehicles to further their own needs.”
Mermell said city staff approached the process with integrity and was very fair.
Mermell warned the council that the selection process would continue to be problematic.
“It will continue to be very contentious at every step. Every permit is going to be appealed and called up to the council,” Mermell said.
According to Councilman Steve Madison, a permit to sell cannabis in Pasadena could be worth “five or six figures” in revenue.
“These are very valuable licenses,” Madison said.
Madison and Councilman Victor Gordo expressed concerns that city officials were pushing the amendments to resolve Atrium’s lawsuit, which claims the city failed to do its duty in allowing another successful applicant, Harvest of Pasadena, to set up shop in the same district as Atrium and less than the prescribed 600 feet from a library.
The three dispensaries were chosen along with Integral, Tony Fong and MME Pasadena after a lengthy process involving 122 cannabis operators that cost $14,000 to enter.
The city took in more than $1 million from the application fees.
After the dispensaries receive a conditional use permit, or CUP, they will be required to obtain a health permit, a business license, a state license and a license from Mermell granting the right to sell cannabis in Pasadena.
The city’s Planning Commission opposed the changes to Measure CC, the ballot measure that allowed the conditional sale of marijuana in Pasadena, when the amendments were presented to them at a meeting in November.
“Two wrongs don’t make a right,” said Planning Commissioner Felicia Williams, who is a candidate in the March 3 election for the District 2 seat presently held by Councilwoman Margaret McAustin, who has chosen not run for a third term.
“The city needs to honor the will of the voters and run a fair process even if it means starting the selection process over,” Williams said.
As part of the Planning Commission meeting, Harvest of Pasadena and Integral, another successful applicant, sent a letter to the Planning Commission, claiming the zoning changes would create “significant environmental impacts” by placing half the dispensaries in one City Council district, District 3.
According to that letter, the impacts would include increased traffic and changed patterns of urban development.
“We understand that these amendments are being offered because over the past several months the city’s cannabis permit process has been criticized and the city is facing pending litigation and a ballot initiative, each of which may interfere with the city’s efforts to make its current regulatory scheme work,” the letter states. “We would like to work with the city to resolve these challenges in a constructive manner.”
The California Supreme Court recently ruled that amendments to zoning regulations that could impact the location of cannabis facilities may constitute a “project” and require reviews under the California Environmental Quality Act, CEQA.
The process began after 63 percent of the local voters in June 2018 approved Measure CC, which allows up to six dispensaries to operate in Pasadena. Voters also allowed the council to retain the authority to amend existing ordinances and adopt future ordinances regarding commercial cannabis business activities.
Measure DD approved a tax structure for cannabis sales.
However city maps revealed that only three or four shops would be able to open in Pasadena due to distance requirements in Measure CC that prohibit dispensaries from operating to closely to schools, libraries, churches and residential neighborhoods.
Councilman John Kennedy, who represents District 3, Councilman Gene Masuda of District 4 and District 7 Councilman Andy Wilson said they were concerned that changing the ordinance would go against the will of the voters.
“I don’t believe it contravenes the will of the electorate,” Mermell said. “My reading of Measure CC is that the voters said they wanted to allow retail cannabis, testing and cultivation in the city of Pasadena. They authorized the City Council to make modifications to the ordinance in order to carry that out.”
Mermell also warned the council that by not passing the amendments it could inadvertently help a ballot initiative sponsored by several so-called “nuisance,” or unregulated dispensaries that the city tried to close prior to Measure CC.
“The People’s Initiative to Preserve the Existing Operation of Non-Offending Commercial Cannabis Businesses” has qualified for the March 3 ballot.
If that initiative passes, 18 cannabis dispensaries forced to close after owners opened storefronts without a business license or a conditional use permit would be allowed to reopen without adhering to Measure CC.
Last week, the Pasadena Weekly reported that the council filed a lawsuit seeking an injunction that would prohibit the initiative from appearing on the ballot because it grants those dispensary owners special privileges and illegally mandates the city take administrative actions.
“We believe the voters have said twice they would like to see cannabis available in town,” Mermell said. “We’re concerned that if we don’t have our regulatory regime in place that it will make that offer from the formerly illegal operators attractive to people.”
“Non-offending commercial cannabis businesses may continue engaging in commercial cannabis activity within the city of Pasadena without a commercial cannabis permit from the city of Pasadena until December 31, 2024,” states the initiative. “Non-offending commercial cannabis businesses operating without a permit pursuant to this subdivision shall not be deemed, ordered discontinued, modified, or removed as a public nuisance pursuant to the Pasadena Municipal Code based solely on their engagement in commercial cannabis activities permitted by this Chapter.”