After months of delay, Berkeley’s new Medical Cannabis Commission will meet for the first time on Thursday, ushering in, city officials hope, a new era of oversight and accountability.
For the past 15 years the medical marijuana business has operated in a gray zone, legal in the city and the state but at risk from crackdowns by the federal government, which does not recognize cannabis as medicine. Despite this uncertainty, the medical cannabis industry has flourished in Berkeley, spawning three dispensaries, numerous collectives and cultivators, and thousands of patients coming from around the Bay Area. Taxes from the sale of medical cannabis are expected to eventually send $300,000 a year into city coffers.
The oversight of the industry, however, has been minimal. Measure JJ in 2008 authorized the creation of a self-appointed medical cannabis commission, which was made up of representatives from the dispensaries and other parts of the industry. While many of the members were well respected, many officials were uneasy about the commission’s lack of accountability. The new nine-member commission, in contrast, is appointed by, and will report to, the City Council.
“The problem with the old commission was that it was the fox guarding the hen house,” said councilmember Laurie Capitelli. “It was dominated by the cannabis community of Berkeley. They basically established rules and regulations that were self-serving.”
“The difference between this commission and the former is it is appointed by the City Council,” said Julie Sinai, Mayor Tom Bates’ chief of staff. “The original was self-appointed by peers and it had zero accountability or connection to the city council, ZAB [Zoning Adjustment Board], or planning commission. [Measure T] brought it into a more accountable position.”
The new commission could have convened in January, but the majority of commissioners were not appointed until June. Measure T requires that at least one commissioner be a member of a dispensary, one be a member of a collective that is not a dispensary, and a cultivator who sells cannabis to more than one dispensary. The make-up of the current commission also includes someone from the union that represents workers in the industry.
One of the first tasks of the new commission will be to create guidelines authorizing a fourth dispensary, and rules regarding the establishment of up to six 30,000-square-feet industrial grow facilities.
The legality of the large grow sites is in question, however, after Nancy O’Malley, the Alameda County District Attorney, sent a letter to Oakland in December telling the city that industrial grow sites were not legal under state law. In addition, officials in the Obama administration have made a number of rulings that suggest that the federal government will not tolerate any facilities set up to grow cannabis on an industrial scale. The federal Department of Justice issued a letter on June 29 stating that those cultivating, selling, or distributing marijuana are violating the Controlled Substances Act “regardless of state law.”
In addition to navigating the confusing mix of laws, the new Medical Cannabis Commission will be expected to sort out Berkeley’s own murky waters. Measure T requires the fourth dispensary to comply with state cannabis laws, and Capitelli believes the three existing dispensaries will have to conform as well. Those laws are not always clear, he said.
The current lawsuit between Berkeley Patients Group and its former employee, Rebecca DeKeuster, is just the latest example. California law adopted in 2004 permits collectives and dispensaries to grow, distribute, and sell medical marijuana on a non-profit basis. (The dispensaries, however, do not have to be non-profits. BPG is registered as a corporation with the state.)
In 2010 and 2011, Berkeley Patients Group provided DeKeuster, a former manager and director, and the Northeast Patients Group, more than $630,000 to win licenses for four medical cannabis dispensaries in Maine, according to the lawsuit. While BPG intended the funds to be loans, the legal dispute means it may never see the money again.
Brad Senesac, the spokesman for Berkeley Patients Group, said pending litigation meant he couldn’t discuss why the organization took funds generated in Berkeley and invested them in Maine.
The California Board of Equalization has also slapped BPG with a $6.4 million bill for back taxes and interest.
“One of the things I hope is that the [new] commission can look at what ‘not-for-profit’ means,” said Capitelli. “We might have to establish some sort of audit guidelines to make sure they are representing what their actual sales are.”
The new commission will also have to watch out for its own internal conflicts. One of the new commissioners is Toya Groves, appointed by city councilmember Max Anderson. She represents 40 Acres Medical Marijuana Collective, which is widely expected to apply for the fourth dispensary license.
“One of the challenges this commission is going to have is managing some of the conflict of interest issues,” said Sinai.