Zoning laws in San Francisco are impeding the expansion of the cannabis industry—namely retail—in the city, leaving entrepreneurs in a state of stasis, and allowing the black market to not only survive, but thrive.
According to San Francisco magazine, the 28 medicinal retailers currently in operation serve a city population of approximately 864,816, leaving one pot store per 30,886 residents.
While this might be veritable for current dispensary owners, current zoning restrictions are preventing others looking to get into the business from breaking new ground, literally and figuratively.
And with a massive influx of clientele expected when California’s state-wide legalization of recreational weed goes live in January, the Golden State might go through a bonafide weed drought much like Nevada did earlier this year—a de facto state of emergency.
Zoning Restrictions Impede Industry Growth
As it stands, only two percent of San Francisco is zoned for cannabis retailers.
The city’s Board of Supervisors recently voted 9 – 2 to enact a 45-day moratorium on all licenses for medicinal cannabis, which can be renewed again and again. At the time, the moratorium was widely disparaged by the city’s Chamber of Commerce.
“This is our opportunity to get ahead of an industry that’s expected to generate $22 billion by 2020,” Supervisor Malia Cohen told San Francisco. For all intents and purposes, however, their measures run counterintuitive to this statement.
In addition to this, certain areas have been given a cap for how many dispensaries are allowed in one zone. An example: a three-retailer cap was placed in Supervisor Ahsha Safai’s district.
It’s one of the only places specifically stoned for the retailers they’re capping.
“It sets the scene for price-fixing and a monopoly of insiders,” one source told the magazine. “The only people who stand to benefit are existing dispensary operators.”
Black Market Safe Haven
While these restrictions might diminish business augmentation, they also do something even more detrimental: create demand for cannabis products that the black market is only more than happy to supply.
Location plays a large role in this.
Right now, the majority of San Francisco’s dispensaries are congregated in the Fisherman’s Wharf and Union Square areas of the metropolis, essentially leaving large swathes of the city without direct access to cannabis. In the vein of cause-and-effect, black market sellers are able to cultivate business in these self-same areas.
In short: these zoning laws inadvertently curtail the efforts of the cannabis legalization movement and ensuing legislation and allow the black market to continue, thwarting the very thing legalization is meant to put a stop to outright.
This runs directly counterintuitive to what Supervisors Shafai and Cohen’s instituted police attempt to directly combat: tensions, imagined or not, between current neighborhood residents concerning an alternativism and a (patently untrue) influx of crime that, to them, pot sales represent. If anything, it’s zoning restrictions within the city limits that bring the black market out of the shadows, not the other way around.