Redwood City will allow marijuana retailers

BY EMILY MIBACH
Daily Post Staff Writer

Redwood City may become the first city along Highway 101 between San Francisco and San Jose to have pot shops.

City Council on Monday (Aug. 24) gave City Manager Melissa Stevenson Diaz the go-ahead to write an ordinance allowing up to six pot shops.

Cannabis industry lobbyist Sean Kali-Rai said that people on the Peninsula will flock to Redwood City instead of going to San Jose or San Francisco to get pot. Kali-Rai also said that the proposed six businesses would fulfill the demand for brick-and-mortar pot shops in the area.

Palo Alto, San Mateo, Mountain View, Menlo Park, San Carlos and Los Altos have all rejected cannabis retailing.

Pot stores would not be allowed within 600 feet from a school or child care center. Despite those boundaries, pot shops could open up along most of El Camino Real, from Harrison Avenue to the city’s border with unincorporated North Fair Oaks and from Arch Street to Avondale Avenue, along Woodside Road from Union Cemetery to Safeway, at Woodside Plaza and between El Camino and railroad from Northumberland Avenue and Diller Street, and a small handful of other spots throughout town.

Resident Javier Gutierrez told council it’s important to him that the shops are the correct distance away, and pointed out that in some of the areas where pot shops are allowed, they may also be where children play.

Gutierrez was the only person who expressed any worry about marijuana retailing during the council meeting held on the Zoom platform due to the pandemic. The rest of the people who commented were either in support of pot shops or run businesses in different aspects of the marijuana industry.

Doug Chloupek, founder and CEO of the marijuana delivery service Juva Life in Redwood City, urged the council to require applicants for retail licenses to have a lease in hand and the property owner’s permission to open such a store.

Chloupek said cities that haven’t required a lease or the owner’s consent have been flooded with applications.

Most of the council seemed interested in requiring applicants to have a lease and the owner’s permission.

The proposed regulations say the minimum size of a marijuana retailer in the city’s industrial area would be 30,000 square feet, about the size of a supermarket.

Councilwoman Giselle Hale questioned the 30,000-square-foot minimum, saying residents probably wouldn’t want a store that large.

“It sounds bizarre,” Hale said.

She wondered aloud how many products a store would have to stock in order to require 30,000 square feet of space.

None of the council members expressed any concern over the idea of allowing as many as six retailers in Redwood City.

The city has a 4% gross receipts tax on cannabis retailers, which could become a regular revenue stream for the city. Hale noted that cannabis sales tend to be recession-proof.

The city can increase the tax up to 10%, but the city’s consultant, David McPherson, recommended that the city just have a 4% tax for now and then reassess how the businesses are doing once they are established.

High taxes are blamed for weaker-than-expected rollout of legal marijuana in California. Retail pot sales are being undercut by a thriving illicit market, where consumers can avoid taxes that can approach 50% in some communities, the Associated Press reports.

If there are six retailers in the city, the city’s 4% tax would bring in a projected $1.32 million a year, according to a report from Assistant City Manager Alex Khojikian.

The only other city in San Mateo County that has pot shops is Pacifica, with two.
Mountain View had initially allowed for up to four pot shops. But after a new council was elected in 2018 and an organized campaign by Chinese parents, the decision was reversed and only delivery businesses are allowed in Mountain View.

San Carlos allows businesses such as the manufacturing of pot products and nurseries to operate, but no retailers.