The Mountain View City Council agreed to ban storefront cannabis businesses from opening anywhere in the city, instead allowing only delivery businesses to operate in Mountain View.
The unanimous vote restricts the more cannabis-friendly ordinance passed by the previous council in October, which had allowed up to two walk-in retail locations in large swaths of the city, including downtown, along with two delivery businesses. Last year's decision by the council sharply divided public opinion in the city, with many attending council meetings calling for a reversal.
That same crush of passionate protesters showed up in full force at the May 23 meeting, packing the council chambers, wearing armbands and holding signs calling for a full and complete ban on pot businesses. Nearly 80 public speakers weighed in, with the many calling retail cannabis a scourge on society that would take away from Mountain View's family-friendly elements and harm children.
"I think the true evil is some people trying to make money in pursuit of profit without caring about our children, polluting the air, polluting the mind of our children," said Vincent Zhang, the owner of a local tutoring center.
Emotions ran high enough that the meeting had to be called into recess partway through public comment due to numerous interruptions from the crowd.
The modified ordinance, which will return for a second reading in June, prohibits storefront retail locations but allows up to three "non-storefront" cannabis businesses in Mountain View -- essentially warehouse and delivery businesses that can't make sales to walk-in customers. These three businesses would need to be 600 feet away from any public or private school and 250 feet away from a child care center.
No cannabis businesses would be allowed in downtown Mountain View under the new rules, and businesses would be prevented from opening within 600 feet of one another. Council members also voted 6-0 to ban any marijuana businesses in the San Antonio area of the city, with council member Lucas Ramirez recused.
Mayor Lisa Matichak, who sought unsuccessfully to ban cannabis businesses altogether, made the complex motion as a compromise with several concessions. For example, storefront locations may have been completely eliminated, but the previously approved "buffers" between schools and cannabis businesses were left intact instead of being made bigger.
Matichak said residents made clear to her in recent months that they don't want any retail marijuana sold in Mountain View, regardless of what prior polls and votes may indicate. Although two-thirds of the city voted in favor of the Adult Use of Marijuana Act in 2016, she said that does not amount to a glowing endorsement for dispensaries opening within the city limits.
"For me it's very clear that our residents really don't want cannabis businesses in our city, and we should listen to our residents," Matichak said.
While Councilman John McAlister eventually voted in favor of the tighter restrictions, he cautioned that the responsibility falls on parents -- not the City Council -- to protect children and teach them about the effects and dangers of drug use.
"The first line of defense is the parents," he said. "Regardless of what we do, your children are still going to be tempted to do things."
The proposed changes to the cannabis ordinance come at an awkward time: the permitting process had already started under the old rules, with 10 businesses having submitted applications to open up shop. Six of those businesses had already been rejected by city staff for various reasons -- including clerical errors -- and four remained as of Thursday. With storefront retail businesses now banned, only one of those businesses is eligible to move forward.
The results of the application process were part of the reason the City Council sought to reconsider its new cannabis business law so soon. Owners were required to secure a location to do business before applying, and four of the dispensaries were tightly clustered in the same area of downtown Mountain View. At the same time, there were concerns that future applicants might seek to open a dispensary in the San Antonio shopping center, where the Los Altos School District plans to build a new school.
Council members were asked to pick from a range of larger buffer zones around schools and child care centers, including a word-for-word adoption of San Jose's zoning restrictions. Doing so would have effectively banned cannabis businesses from opening in Mountain View, while 750-foot and 600-foot buffers would have drastically reduced the allowable areas. The City Council ultimately voted to keep its original buffer zones intact and reject all the alternatives.
The Thursday decision is expected to cut into the revenue anticipated from Measure Q, a tax on cannabis sales in Mountain View that passed overwhelmingly in 2018. Each cannabis business is expected to generate about $200,000 each year in local taxes, along with registration fees to offset costs to the Mountain View Police Department.
Despite the tighter rules, Mountain View remains one of the few cities on the Peninsula to allow cannabis businesses at all. Palo Alto banned the businesses in late 2017, while Menlo Park has a long-term moratorium on pot shops and outdoor cultivation.
An estimated 80 percent of the city and county jurisdictions in California do not allow the legal purchase of marijuana despite the passage of the Adult Use of Marijuana Act, which cannabis advocates say has hindered the state's rollout of legal recreational marijuana -- including all of the money it was supposed to generate.
California's state budget office was predicting $643 million in excise tax revenue for the 2018-19 year last year, which would go toward education and substance abuse treatment, cleaning up illegal cultivation and public safety. But lower-than-expected sales slashed that number by more than half, with the May 2019 Governor's budget now showing $288 million in revenue. Back when the measure passed, Proposition 64 was expected to generate $1 billion annually by this point.
The state's Cannabis Advisory Committee concluded in its 2018 annual report that high taxes on legal cannabis sales and the difficulty in getting permission from local municipalities are the root causes behind the sluggish sales.
"The majority of local municipalities are either not issuing licenses or are slow in rolling out their cannabis programs," according to the report. "Of the municipalities issuing licenses, most are not issuing retail licenses."
The three businesses that were eligible to open storefront shops in Mountain View will be given priority to apply again for a non-storefront delivery business, and a subsequent open application process and lottery will be held to fill any remaining openings.
Council members mulled having all 10 applicants re-apply, given so much had changed, but ultimately decided that only the four deemed eligible could have priority. Councilwoman Margaret Abe-Koga said marijuana businesses need to be held to a high standard, and it's not the city's problem if business owners failed to double-check their paperwork. One business, for example, had put down the wrong address and inadvertently suggested they were going to put a cannabis shop in a mobile home park.
"If you didn't get your address correct, then I'm sorry, but I don't have sympathy for you," she said.