City relaunches cannabis business applications after major changes | August 30, 2019 | Mountain View Voice | Mountain View Online |

Mountain View Voice

News - August 30, 2019

City relaunches cannabis business applications after major changes

New process gives past applicants first dibs on opening pot shops

by Kevin Forestieri

Mountain View is accepting applications to open up to three cannabis businesses in the city, resuscitating a permitting process that was put on ice following an overhaul of the city's regulations.

Cannabis businesses that previously applied to open in Mountain View earlier this year — under completely different rules — will get the first chance to reapply starting Sept. 9, according to Associate Planner Clarissa Burke. If the city doesn't get enough applications or too few companies get a permit, there will be another opportunity to apply that's open to everyone.

It's essentially a do-over of a messy process that took place earlier this year. The city asked for and received 10 applications in February, swiftly rejected more than half on grounds of incompleteness or clerical errors and then rewrote parts of the cannabis business ordinance, putting three more applicants out of the running. By the end, the city had nullified all but one of the cannabis businesses seeking to open in Mountain View.

The revisions to the law, approved by the City Council in May, focused on restricting and reducing the presence of the budding cannabis retail industry in Mountain View. The original ordinance passed in October last year allowed for a total of four cannabis businesses, of which two could be storefront locations permitted to do walk-in sales. Zoning at the time also allowed dispensaries to open up shop in the downtown and San Antonio areas of Mountain View and numerous retail locations peppered throughout the city. There were no rules at the time explicitly barring marijuana retailers from being close to one another, either.

The City Council's revisions completely eliminate storefront retail uses, instead allowing up to three "non-storefront" businesses — essentially storage and delivery services for cannabis products. The San Antonio area is now off-limits as a location, and there must be a 600-foot buffer between cannabis businesses.

Allowing retail cannabis has been among the most contentious, hot-button issues in Mountain View over the last year, drawing large crowds to meetings every time it's addressed by the City Council. In March, when the council announced its intent to revise the law, more than 130 people spoke at the lengthy meeting, with a majority demanding that the council adopt a blanket ban against all cannabis businesses.

The plan, according to city documents, is to let the one remaining non-storefront retail business from the first round of applications continue through the permitting process, Burke said, while the three storefront businesses that are no longer compliant will have a chance to submit a new, compliant application — for a non-storefront business.

Business owners interested in starting a cannabis company in Mountain View must go through a regulatory gauntlet, where "Phase 1" includes a background check with the Mountain View Police Department; evidence of a legal right to occupy the property or tenant space where the business will be located; and a written business description with hours of operation, security plans and type of products to be sold.

The only business to survive the first round of applications was MWKM Corporation — doing business under the company name Grown. The application, though heavily redacted, shows the company plans to run a delivery business at 229 Polaris Ave. in Mountain View, located at the corner of Polaris and Wentworth Street, and anticipates primarily serving residents in Mountain View, Los Altos, Sunnyvale and Palo Alto.

Grown's application includes plans for odor management — even though the products will arrive prepackaged — and strategies for avoiding illegal redistribution or sale of cannabis. Employees will be subject to a strict screening process and rigorous inventory controls, and will be supervised when a new delivery of cannabis products arrives.

The application also includes a plan for managing and protecting money received from customers, as many of the transactions in the industry are done with cash.

The business owner, Matthew Mahaffey, said in his application that he has deep roots in Mountain View, moving to the city when he was 9 years old and meeting his wife and friends there. With the state essentially greenlighting marijuana delivery services regardless of local ordinances, he said now seems like the "ideal time" to open on the Peninsula where there are no pot businesses.

Despite the tighter rules, Mountain View remains one of the few cities on the Peninsula to allow cannabis businesses at all. Palo Alto banned them in late 2017, while Menlo Park has a long-term moratorium on pot shops and outdoor cultivation.

Proponents lobbying in favor of cannabis businesses have long argued that the Adult Use of Marijuana Act, which legalized the recreational sale and use of pot in California, has been stifled by individual cities and counties who have done everything short of outlawing marijuana, with a mix of moratoriums and tight restrictions. Local restrictions, along with high tax rates and fees, are blamed for lower-than-anticipated revenue from the state's cannabis excise tax.

Last November, Mountain View residents approved Measure Q, a new tax on retail cannabis products, by a landslide. The tax was projected to raise about $1 million in revenue annually.

A report last year by the state's Cannabis Advisory Committee found that early cannabis businesses are facing an uphill battle caused by regulatory burdens. A majority of local municipalities are either not issuing licenses at all, or being slow to write up a regulatory framework for retail licenses. The city-by-city approach is also making it tough for businesses to navigate a patchwork of varying conditions and standards that aren't always consistent with state requirements, the report found.

The deadline for applications is Nov. 8. If there are more than three eligible applications, the city will hold a lottery to determine which companies will move forward. The lottery is tentatively scheduled for December 2019 or January 2020.

Email Kevin Forestieri at kforestieri@mv-voice.com

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