PLANCO'S PENULTIMATE POT PLAN PROCEEDING

CITY HALL - With opportunities narrowing for influencing the City's
draft standards for medical marijuana, the various stakeholders are
becoming more assertive and their rhetoric sharpening. Last week the
Planning Commission (Planco) held its next-to-last meeting on the
subject, and its final package of standards will likely be approved
Aug. 26 and then sent up to the City Council for final adjustments and
approval.

At last week's meeting, some neighborhood activists found the new
draft standards too liberal and asked for further restrictions, though
some dispensary operators lobbied for loosening of the looming laws.
The general upshot of the meeting was an overall tightening of the
regs.

The standards attempt to balance cannabis access for Prop 215 patients
with neighborhood preservation by eliminating for-profit grow houses
but allowing small personal grows of up to 50 square or 250 cubic
feet. Dispensaries would be capped at four, then three if one shuts
down. They would be allowed to grow for patients in 25 percent of
their floor space on site but not over 1,500 square feet, and with
purchases from grow houses specifically prohibited. One off-site grow
operation would be allowed in an industrial area of town.

The dispensaries would have to provide detailed operations reports and
improve their environmental practices. Compliance would be required in
one year from final passage, and use permits required. Patients would
be limited to four dispensed ounces of marijuana per month.

Checks and Balances

Community Development Director Larry Oetker said suppression of grow
houses and street sales of medical marijuana would stem from the
annual performance reviews provided by dispensaries. The reports would
offer detailed tracking of quantities grown, purchased and dispensed.
A third party auditor could be brought in to verify the reported figures.

Cannabis advocates have asserted that the City lacks authority to
regulate dispensary practices such as amounts dispensed to patients.
City Attorney Nancy Diamond said that the Planco has police power for
code enforcement as long as it can be shown that a public health,
welfare and safety issue is being addressed. Black market sales,
neighborhood deterioration and other problems could support that
justification. But, Diamond cautioned, due to always-evolving case law
and ending state regulations, "the law is changing daily." She
nonetheless urged the commission to continue with its process.

iCenter manager Tim Littlefield said the Planco is "anti-medical
marijuana," and that its new standards "guarantee the flooding of the
black market" by shutting down grow house purchases by dispensaries.
However, during previous Planco meetings, Littlefield had asserted
that the iCenter's purchases from grow houses are extremely limited.
He further said his personal need for medical marijuana "far exceeds
eight ounces per month."

iCenter owner Steven Gasparas questioned the Planco's authority as
"discriminating." Later, Gasparas added that a ban on residential grow
house sales would do little to abate crime. Turning to what he called
the "small little group" in the audience that spoke against grow
houses, he jabbed the air with his pen as he said over-the-top
residential grows would continue regardless of Planco action. He
likened residential cannabis growing and sales to the creation of
paintings by amateur artists, which are also sold.

Eric Heimstadt of Humboldt Medical Supply (HMS) called the new
standards "amazing," and said his business is already working on the
required reports.

"We'd love to have everything tracked," he said. He said the
originally proposed eight ounces per month was too much given
contemporary cannabis's potency, and advocated for a reduction to four
ounces per patient per month.

Dennis Turner of The Humboldt Cooperative (THC) said the six-month
renewal of medical cannabis recommendations has been ruled illegal.
Frequently punctuating his testimony with "OK?" Turner asserted that
some cannabis patients smoke as much as a quarter ounce per day. He
asked that THC be part of the City's solution.

"We will not give you any problems," he said. "Our subsidiary
operations will take up the majority of the issues that may arise, OK?
For us, OK?" he said, offering no elaboration as to the nature of the
"operations."

Nip It In The Bud leader Robin Hashem asked that personal cultivation
be limited to 25 square feet or 125 cubic, and that dispensaries be
limited to 250 square feet of growing area. She suggested that
dispensaries be capped at two.

"The only reason we have five is that no one was paying attention or
understood the full consequences to our town," Hashem said.

Citizen Wade DeLashmutt has previously lobbied for an outright ban on
residential grows and for having few to no dispensaries in town. He
said his neighbor's grow house made his neighborhood "cave in" until
eventually busted with a reported 27 pounds of marijuana, $12,000 cash
and methamphetamine confiscated.

"That's what you're going to have if you let people grow in their
house," Delashmutt said. "If you let them grow 50 feet, they're going
to grow a hundred feet."

He further advocated a zero tolerance stance toward grow houses, sales
and dispensaries, that none be allowed. "Make a stand - zero,"
DeLashmutt said.

Citizen Laura Albright agreed. "I'd love to see it at zero," she said.
But, that being unrealistic, she said Planco should "cap it at one."
She didn't want any residential growing allowed.

HSU Biology Professor Bob Gearheart advocated for no residential
grows, maybe two dispensaries and a for a "full CEQA document" to be
created.

That would be an environmental study under the California
Environmental Quality Act, likely taking into account issues of energy
consumption and solid waste. At a meeting with citizens the day
before, Oetker said that dispensary use permit approvals could require
traffic studies, inasmuch as some boast thousands of customers, most
of whom arrive by car.

"Full disclosure in the decisionmaking is possible," Gearheart said.
"It would help you, it would help the staff, it would help the community."

Citizen Ann Warner suggested that medical marijuana dispensaries be
limited to the same number of existing pharmacies in Arcata - two.
"These pharmacies seem adequate to address the medical needs of the
residents of Arcata," she said. She asked the Planco to reorient
itself towards civic improvement rather than service the marijuana
industry, which has cast Arcata as a "self-defined haven of illness"
populated by thousands of sick people who require marijuana.

Realtor Charlie Jordan said her opposition to commercial marijuana
production in residential areas is "non-negotiable." "I just don't
think you should grow orchids, grow marijuana or fix cars in
residential areas," she said. She said there are "ramifications" to
limiting the livelihoods of dispensary operators, and urged
commissioners to find "middle ground."

Other speakers decried the reorientation of Arcata as a commercial
cannabis capitol for the region.

The Planco Decides

Commissioner Robert Burnett offered extensive remarks - also heavily
punctuated with the "OK?" verbal tic - characterizing the Planco's
emerging standards as a balanced and flexible approach to regulating
medical needs with public safety. He said Gearheart's call for an
environmental study was " strictly a smokescreen by people that hope
to delay the process and stop it dead in its tracks."

Commissioner Michael Winkler said an appeals mechanism ought to be
included in the standards so that patients and dispensaries accused of
improprieties could have "due process."

While two of the four dispensaries - THC and HMS - appear ready to
comply with the new standards, the regs, if adopted, could spell the
end of the iCenter. Its lease on the storefront at 11th and K streets
expires in October, effectively closing the business. Reopening
elsewhere would require a new Conditional Use Permit, which is
effectively banned by the new standards.

Following more discussion, largely led by Commissioner Paul Hagen, the
commission settled on the cap of four dispensaries, reverting to three
if one closes. However, Commissioner Judith Mayer called the cap a
"fairly bogus thing," and counterproductive.

Detection and Deterrence

iCenter's owner Gasparas's point about land use standards not
deterring commercial residential grows is underlined by practical
limits on grow house detection and code enforcement.

The county Drug Task Force reviews energy consumption records in
developing cases against grow house operators. DeLashmutt's neighbor,
Robert Rivello, consumed more than 10,000 kilowatt hours of electrical
energy at his Ninth Street grow house - enough to power a small
neighborhood - until DTF shut it down.

Though the Planning Commission has "police powers," a PG&E spokesman
said the utility's privacy policy rules out any casual review of a
residence's energy consumption by the commission or by Community
Development.

According to PG&E's legal department, "Customer records/information,
including usage, can only be obtained by court order (search warrant,
subpoena), which are issued by the courts, by the District Attorney,
or under Federal Law, the U.S. Attorney. Any government agency,
including Community Development, would have to have such a court order
to seek our customer records."