San Leandro could be moving quickly toward a third cannabis dispensary

San Leandro quickly approved a second medical
cannabis dispensary in July.

When the San Leandro City Council approved a second medical cannabis dispensary in July, its swiftness, coming just after awarding its first-ever permit to Harborside in 2015, was notable given the excruciatingly difficult path it endured to get even a single dispensary approved in the city.

More surprisingly, is word that discussions over a third dispensary coming to San Leandro have already begun. Sources say the issue could be included on a city council agenda later this month.

The likely benefactor of the third permit is centered around medical cannabis dispensary BLUM Oakland, the runner-up for the second dispensary this summer, which was given to the Davis Street Wellness Center.

During the city’s initial search for qualified applicants in 2015, the city ranked BLUM Oakland third behind Harborside and the Davis Street Wellness Center. Now that the top two ranked operators in the first permit’s Request For Proposal (RFP) have now received permits, there is worry the third round will essentially be approved without an updated and transparent bidding process.

Currently, neither of the two permitted dispensaries have yet to open shop in San Leandro. The Davis Street Wellness Center, through July, had not yet identified a suitable location for its proposed dispensary. One location initial sought by the Davis Street Wellness Center and noted in its application, is not viable under the city’s zoning rules since it’s too close to the San Leandro Boys & Girls Club.

Earlier this year, some were critical of the city’s decision against reopening the bidding process for the second dispensary. One of the main arguments made by critics was the cannabis industry is in a stage of rapid change and an RFP from even 12 months ago may no longer be viable.

In addition, the push for a third dispensary may signal doubts by city over the viability of the Davis Street Wellness Center, an enterprise backed by the well-known San Leandro non-profit Davis Street Family Resource Center. The non-profit and its partners have little to no experience in the medical cannabis dispensary business.

Furthermore, prior to the council’s approval of the Davis Street Wellness Center permit last July, Councilmember Lee Thomas grilled Rose Padilla Johnson, the founder of the Davis Street Resource Center, over a $1.5 million loan given by the city to the non-profit for its expansion. Johnson had received a 90-day extension from the city to repay the loan while the non-profit awaited payment of a federal grant.

The exchange between Johnson and Thomas, however, highlighted for some the inherent conflict of interest that existed in the awarding of the permit to Davis Street Wellness Center, along with raising questions of whether the non-profits intends to use the potential windfall from the dispensary to cover its debts to the city. In essence, saying, if the city doesn’t give us the permit, we won’t be able to pay you back.