Cannabis being inspected at Berkeley Patients Group. Photo: Frances Dinkelspiel
Cannabis being inspected at Berkeley Patients Group in 2011. Photo: Frances Dinkelspiel

Update 11/19/14: The City Council voted on Nov. 18 to refer this item to the Planning Commission for further review.

Even though Berkeley residents voted in 2010 to allow six commercial cannabis grow sites to operate in the city’s manufacturing zone, none has opened – and none probably will unless the city changes its guidelines, according to a report that will be presented tonight to the City Council.

When Measure T was adopted in 2010, it restricted cannabis grow factories to the city’s M (manufacturing) zone. But space appropriate for operations of 30,000 square feet (the maximum allowed for each site) is extremely limited, according to the report prepared by the city’s Medical Cannabis Commission. Moreover, very few properties in that district come up for rent.

“In trying to relocate to expand our operations, we encountered scarcity of suitable space in the M District, compounded by apprehension from Berkeley landlords to lease to cannabis related businesses,” one cannabis businessman testified to the MCC in November 2013. His words were included in the report.

The MCC wants Berkeley to consider allowing commercial cannabis operations to operate in parts of the city zoned MM (mixed manufacturing) and MU-LI (Mixed Use-Light Industrial). Council will decide Tuesday night whether to refer the issue to the city’s Planning Commission for further exploration. It is on the consent calendar.

Read more about medical cannabis in Berkeley.

The lack of opportunities for cannabis grow sites has a direct impact on the financial health of Berkeley, according to the report. If six sites of 30,000 square feet each are built, totaling 180,000 square feet, they would earn around $38 million in revenues annually, and contribute around $990,400 in taxes to the Berkeley General Fund each year.

(The Medical Cannabis Commission is still working on guidelines for selecting the grow sites; they won’t come to council before next year.)

The report notes that no other “industrial” business in Berkeley is limited to just one zoning area; most can operate in a number of different districts. (See the chart below.)

commercial cannabis operationsCharlie Pappas, a member of the MCC and the former operator of the Divinity Tree dispensary in San Francisco, said in his informal searches he had seen space available outside the M zone, but none inside it.

“I found four spaces on Tenth Street that were perfect for cultivation,” he said. “That was a block away in a different zone. I am sure there are other areas.”

Even if the city expands the locations where cannabis grow operations can set up shop, they may have a difficult time finding landlords willing to rent to them. The U.S. Attorney for the Northern District, Melinda Haag, has been aggressively pursuing cannabis operations, ostensibly because they are located too closely to schools and daycare centers, or because of the “sheer size of their distribution operations.” She threatened to seize the property at 2747 San Pablo Ave. owned by David Mayeri, which he rented to Berkeley Patients Group, according to well-informed sources. When that dispensary moved a few blocks away to 2366 San Pablo Ave., Haag filed suit against that property owner, Nahia Droubi, threatening to seize her property, too. The suit is pending.

The M district is a 17-square-block area in West Berkeley, which is intersected by a railroad line. Some of its biggest businesses include Pacific Steel Casting, PS Public Storage, Berkeley Forge and Tool and the city of Berkeley’s Transfer Station.

Not only are the majority of buildings in the M district “big and hulking,” which make them inappropriate for adaption, federal rules further reduce the areas appropriate for cannabis cultivation, according to the report.

“The M District borders the Berkeley Skate Park, Gabe Catalfo Fields, and Harrison Homeless Shelter that includes children; while Berkeley does not have buffer around parks and schools, the federal government does have buffers and that fact may discourage potential landlords. All of these impediments contribute to severely limited rental opportunities for cultivation.”

Adopting a fee structure for the fourth cannabis dispensary

The City Council will also hold a public hearing Tuesday night to set fees for the application for a fourth cannabis dispensary. Choosing a new dispensary will take a lot of staff time, and the fees are designed to reimburse the city, according to City Manager Christine Daniel.

Council will select a fourth dispensary by whittling down the applicants, so there will be multiple rounds. Applicants would pay $878 for round one, $2,948 for Round Two (and an additional $2,000 if an applicant is proposing additional sites), and $2,948 for Round Three. The applicants would have to pay an additional fee of $71 for the police department to review the criminal history of the applicants.

Find out what else is on the Nov. 18 Berkeley City Council agenda. Read more about medical cannabis in Berkeley.

Free pot for the poor (07.11.14)
Berkeley Council: Let’s add fourth dispensary (06.08.14)
Berkeley will again consider a 4th cannabis dispensary  (06.03.14)
Berkeley delays decision on fourth dispensary (09.20.13)
Berkeley to consider 4th medical cannabis dispensary (09.17.13)
Berkeley delays fourth medical cannabis dispensary (06.13.13)

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Frances Dinkelspiel, Berkeleyside and CItyside co-founder, is a journalist and author. Her first book, Towers of Gold: How One Jewish Immigrant Named Isaias Hellman Created California, published in November...