Recreational marijuana sales won’t start in January in SF after all

Medicinal cannabis operations like Malcolm Mirage and Nina Parks’ Mirage Medicinal will also face new regulations next year as San Francisco considers new marijuana laws. Medicinal cannabis operations like Malcolm Mirage and Nina Parks’ Mirage Medicinal will also face new regulations next year as San Francisco considers new marijuana laws. Photo: Paul Chinn, The Chronicle Buy photo Photo: Paul Chinn, The Chronicle Image 1 of / 7 Caption Close Recreational marijuana sales won’t start in January in SF after all 1 / 7 Back to Gallery

People eager to start buying recreational marijuana from shops in San Francisco when sales become legal throughout the state in January are going to have to wait a little longer.

The city won’t issue permits to sell recreational marijuana until it passes new laws to regulate the industry and creates an equity program to help low-income entrepreneurs, people of color, and former drug offenders break into the market.

According to Supervisor Jeff Sheehy, who introduced an ordinance with proposed regulations at Tuesday’s Board of Supervisors meeting, city officials still have no idea what that program will look like or how it will operate.

“Out of a 70-page ordinance, less than a page talks about how to make (the industry) equitable,” said Sheehy, who co-sponsored the cannabis ordinance with Mayor Ed Lee. Sheehy said the laws are “far from perfect, and further from final,” and will require a lot more work.

In July, the board asked the city controller and the Office of Cannabis to put together a report on equity in the cannabis industry and submit it by Nov. 1. Although the supervisors all want to help people who suffered disproportionately from tough drug laws of the past, that won’t be easy.

Oakland passed the state’s first cannabis equity program in March — it took more than a year to craft and prompted numerous fights among city officials. The final version sets aside half the city’s cannabis permits for low-income residents who either have a past cannabis conviction or live in a neighborhood with a high number of marijuana arrests. The idea was to help entrepreneurs of color without explicitly saying so, since California’s constitution bars cities from discriminating by race.

Earlier this month, the supervisors approved a 45-day moratorium on new dispensary permits, saying the city needs time to create its equity program. At the same time, the board raised other concerns for the Office of Cannabis to consider, such as how to keep marijuana away from minors and how to prevent dispensaries from clustering in low-income neighborhoods.

The laws that Sheehy and Lee introduced Tuesday have some provisions to address those issues, including a 600-foot buffer between a cannabis shop and the nearest school, and a 300-foot distance between cannabis businesses. Those laws won’t apply to the city’s 48 existing cannabis businesses — 34 of which are brick-and-mortar shops — which will be grandfathered in.

San Francisco will require all dispensaries to keep selling medicinal marijuana, even if they obtain licenses to sell the recreational product as well. New recreational sales outlets will also be required to sell medical marijuana. Medicinal marijuana requires a prescription and includes some products, such as tinctures and creams, that do not produce a euphoric effect.

Sheehy admitted to concern about an excess of new planning and zoning regulations in his and Lee’s ordinances.

“Does too much regulation drive people into the black market?” he asked

In addition to contemplating social equity issues, the city will have to devise a new licensing system for its medical cannabis dispensaries to bring them in line with current state laws that require all parts of the supply chain to be regulated. Under the new system, nurseries and manufacturers that previously operated underground will have to be licensed by the city.

The city will allow its existing medical cannabis dispensaries to apply for temporary 120-day permits on Jan. 1 so that they can stay open while officials design the new structure.

Also on Tuesday, Supervisors Jane Kim and Norman Yee asked the controller’s office to produce a report on the costs and benefits of providing free or subsidized child care to low-income residents in San Francisco.

Kim has asked the city attorney to draft a ballot measure for universal affordable child care to coincide with a similar measure in Alameda County that will also raise the pay of child care workers to $15 an hour.

Rachel Swan is a San Francisco Chronicle staff writer. Email: rswan@sfchronicle.com

Twitter: @rachelswan