Hundreds of marijuana delivery services are operating apparently illegally in the city of San Diego and advocates for them are making one final plea to the City Council to allow a few to obtain permits.
I’m not sure people fully grasp the seismic changes about to occur in the culture and business of marijuana – and how the products make their way to homes across the city is going to be a big part of it.
The City Council Monday is discussing a bevy of potential options for how to regulate – if they decide to allow them at all – the supply chain aspects of cannabis in the city. Businesses that manufacture, distribute, cultivate or test it will finally know what’s allowed, and where.
But delivery service operators are doing all they can to try to persuade the City Council to consider one more topic: They want a few more delivery permits.
If they don’t succeed, the estimated 200-300 delivery services currently sending products out will face potential crackdowns. The city decided months ago that only licensed dispensaries can operate delivery services. Right now, only 17 groups have gotten those permits.
Those 17 facilities will also be the ones likely to get the state permits needed to sell marijuana. Only eight currently have delivery services.
That portends a rather stunning consolidation of the market. And it means the city of San Diego is marching toward making the 17 legal vendors of cannabis very, very wealthy – especially if it effectively cracks down on unlicensed competitors.
“We’re asking for 15 more. We’re not trying to come out with 300 new permits. The hope is that when those 15 go through, and they’re following the rules and they’re being good neighbors, people will see they’re worth having around, then we can look at the need again,” said Elizabeth Wilhelm, president of the San Diego Cannabis Delivery Alliance.
City staff and political leaders, though, do not appear inclined to consider anything else Monday besides what to do about the many businesses that want to supply and test marijuana within city limits.
And that’s just as well to the existing licensees of legal marijuana storefronts.
Phil Rath has been lobbying on behalf of the United Medical Marijuana Coalition, which includes almost all of the licensed dispensaries. He said those with permits have to go through a lot to prove they have proper storage, cash management, security and walls.
“The city has an interest in making sure that is all being handled professionally,” he said.
Thus, unpermitted delivery services need to close, in his view. Some might conform to state law but not the cities’. For those, Rath said, there is a fairness issue. If a licensed dispensary goes through all the trouble to conform to special city laws, how can it compete with a delivery service that doesn’t?
Wilhelm said the delivery operators are willing to conform to the same conditions and more. She said they are even willing to forgo the possibility of participating in the recreational market when it finally becomes legal next year.
She and others warn that demand for marijuana is intense and if enough delivery services aren’t authorized, legitimate patients may not make the priority list of busy licensed groups. But also, she said, a black market would still have incentive to operate.
“The whole purpose of all these regulations is to put an end to the black market. Having only eight licensed delivery services doesn’t make any sense with the amount of demand here,” said Dallin Young, a lobbyist with the Association of Cannabis Professionals.
Even if the Hail Mary works and the City Council does allow more delivery services, a major consolidation and crackdown awaits.