San Francisco has more pharmacies per square mile than any other major city in California. With 37 dispensaries currently open and 41 delivery services in our 47-square-mile city, that’s twice as many pot retailers per square mile than Los Angeles, Oakland, Sacramento or San Jose, according to a recent report from the San Francisco Auditor’s Office.
And that might just be too many places to buy weed. The same report found that the average sale of cannabis at each pharmacy declined as more new stores were approved, leaving a smaller slice of the pot pie for the new owners of the stock pharmacies, who were supposed to enjoy financial restorative justice for the damages incurred. they suffered during the war on drugs.
As the system may be short of new equity pharmacies, which tend to be smaller and locally owned, a San Francisco regulator is proposing a radical move to reverse the declining sales trend.
On. Shamann Walton has introduced a bill requiring San Francisco to simply stop considering all new uses for cannabis dispensaries.
“It seems doubtful whether the San Francisco market can support more Cannabis Retail businesses in a larger number than the applications already in the pipeline,” Walton said in his proposed legislation.
In addition to the nearly 80 combined pharmacies and delivery services now operating in San Francisco, the San Francisco Office of Cannabis is assessing applications for 145 additional pharmacies and 42 delivery services in a city already packed with more of these per square mile than anywhere else in the United States. state.
Walton proposes to “stop accepting new applications for Cannabis Business Permits for retail sales – including permits for Storefront Cannabis Retail, Delivery-Only Cannabis Retail, Medicinal Cannabis Retail, and retail-related Cannabis Microbusiness.”
The bill would cut off retail applications and would not affect other sectors such as indoor growers or testing labs. But most marijuana smokers in San Francisco only work directly with pharmacies and delivery services. From a consumer perspective, this would be one of the most significant changes affecting the local cannabis industry since the introduction of recreational cannabis in January 2018.
The moratorium was not Walton’s idea. It was recommended in the December report of the Controller’s office. “The Board of Trustees and the Mayor should consider a moratorium on new retail applications for retail stores,” that report says. “There is such a large number of storefront retail applications that this activity may not be viable for many of these equity applicants, who may be expanding resources to reach a market that may already be saturated.”
It is highly unlikely that the nearly 150 new pharmacies that have applied for a license will actually open. Many of those applications are “On Hold” because their location is within 180 meters of another license application, and local law says no two pharmacies can be close to each other. Others simply don’t make it through a costly and years-long approval process.
Walton’s account is co-sponsored by Sup. Ahsha Safai, who had imposed a similar moratorium on pharmacies in his Excelsior district three years ago. Both Safai and Walton insist that they support legal cannabis. Both have even received some remarkably generous donations from some of the largest pharmacy operators in the city.
Safai and Walton both ran in Tuesday’s election for something called the SF Democratic County Central Committee (DCCC), a local party committee that makes approval and fundraising decisions for Democrats. While the DCCC statutes impose a $500 limit on outside campaign contributions, those statutes have been flouted by several DCCC candidates who take advantage of the lack of legal enforcement of that rule.
And these two supervisors have received some of the largest donations well beyond the $500 limit, many of these donations coming from cannabis dispensaries.
According to campaign files with the SF Ethics Commission, Sup. Walton’s DCCC campaign received a $3,000 donation from FMSF, Inc. on February 19. Licensing documents from the California Bureau of Cannabis Control show that “FMSF, Inc.” is the legal name for the Moe Greens dispensary on Market Street.
His campaign also received a check for $3,000 on January 20 from Outer Sunset Holdings, which state documents indicate is the parent company of the Barbary Coast Sunset pharmacy. That same day, he received another check for $3,000 from BCSF, Inc., the publicly traded owner of the Barbary Coast location on Mission Street. Walton’s DCCC campaign had previously reported another $3,000 on January 24 from FMSF, Inc.
That’s a total of $12,000 from the cannabis industry to Walton’s 2020 DCCC campaign, which represents 44 percent of his $27,000 contributions to the war chest of cash.
Safai’s cannabis contributions are much more modest, but have exceeded the commission’s limit. Safai’s DCCC campaign files show a $1,000 contribution from Brendan Hallinan, co-owner of Moe Greens, dated Feb. 13, as well as $500 contributions from both BCSF, Inc. as Outer Sunset Holdings.
There is no evidence that any of these contributions influenced regulators’ cannabis policy proposals. But it shows that some of the bigger players in the local cannabis industry have figured out how to play around with San Francisco politics.
But would a freeze on new pharmacies help established stores and the emerging new pharmacies with shares? We asked a few pharmacy owners and their responses to the proposal were mixed.
“It’s too little, too late,” SPARC owner Erich Pearson told SF Evergreen. “Supervisor Walton is proposing the moratorium in an effort to halt the ultimate failure of many of the current applicants, and I doubt it will prevent that. The city has not understood the economic reality of the program from day one.”
But at the pharmacy of the Groene Kruis, owner Kevin Reed expressed his support.
“This proposed regulation seems perfectly reasonable to me,” Reed said. “I agree with the Controller’s reasoning that a moratorium would protect the interests of retail share applicants already in the pipeline. Allowing more applications would only slow down the complicated licensing process.”
Walton’s proposed moratorium is far from being approved. He introduced the bill on Feb. 11, and it’s now valid for 30 days before it will even be discussed by the council’s Public Safety and Neighborhood Services Committee. The earliest they can take it up would be their March 12 meeting, and the proposal could sit in committee for months, or be rejected outright, before going to a full vote of the Board of Supervisors.