Medical marijuana shops will legally operate in Santa Ana

After spending years chasing illegal medical marijuana shops out of town, some cities in Orange County have found a new way to play defense.

If you can’t beat them – legalize them.

“The city is regulating instead of the medical dispensaries regulating us,” said Sal Tinajero, Mayor Pro Tem for the city of Santa Ana.

On Thursday, the city of Santa Ana will hold a lottery to give 12 to 20 prospective pot shop owners a chance to obtain a permit to legally sell marijuana.  The city received more than 600 applications for spots,  bringing in more than $1 million in application fees.

The winners of the lottery will move on to the second phase of the permitting process. They’ll have to obtain a public safety permit with the Santa Ana Police Department before they can begin operating.

The lottery, which is being conducting by an independent accounting firm, is the product of a city-backed measure Santa Ana voters passed in November.

The city council presented its own measure to tightly regulate medical marijuana dispensaries last year after a coalition of marijuana advocates qualified to get a similar but more relaxed referendum on the ballot. Both measures passed but the city’s initiative received more votes, 65.9 percent.

Under the city’s measure, medical marijuana dispensaries can only operate in two industrial parts of the city. They cannot be clustered or within 1,000 feet of any park, school or residential area. No cultivation is allowed.

Tinajero said Santa Ana is now prepared for 2016, when marijuana advocates are expected to try to get a statewide measure passed to legalize recreational marijuana use.

“By having something in place, we’ve already set the standard of where we would allow any type of cannabis sales in the city to occur,” he said.

The city of Costa Mesa is in the middle of creating an ordinance to regulate medical marijuana dispensaries there. It, too, was forced into regulation by a coalition of marijuana advocates.

Randall Longwith, an attorney who represents dispensary owners, led a petition effort to place marijuana regulations on the Costa Mesa ballot in March. That’s been delayed and advocates are threatening legal action.

Longwith is using the voter referendum as a tool to pressure other cities too--Westminster is next--into legalizing the dispensaries. He said cities don’t want to wait for a state lawmaker in Sacramento, or a lobbyist, or a group of marijuana advocates writing rules for them. 

“If you’re an independent city, that’s exactly what you don’t want,” he said. “And for a lot of them, they don’t want us doing it either.”

In Santa Ana, dispensaries' receipts will be taxed at 5 to 10 percent, generating an expected $1.5 million a year for the city. That money will go to funding an enforcement team to shut down illegal pot shops. Leftover revenues will be funneled to the city’s public safety budget, said Tinajero.

Longwith is using potential new income as a selling tool to convince cities to legalize and regulate pot shops.

“This is new money,” he said. “This has never existed before.”

Westminster Council Member Diane Carey said the city council has directed staff to investigate medical marijuana regulations and will hold a study session on it.

But not all cities are interested. The Anaheim City Council on Tuesday voted to file criminal and civil charges against property owners who lease to medical marijuana dispensaries.