Hayward city leader have shied away from the
cannabis industry over the past seven years.

The Hayward City Council is now on track to allow cannabis businesses in the city at some point in the near future. During a work session Tuesday night there appeared to be unanimity in favor of Hayward dipping its toes into the burgeoning cannabis industry.

The City Council appeared amendable to allowing cannabis businesses to open shop, possibly including cultivation and manufacturing in its industrial areas, while also rezoning some areas for retail medical dispensaries in addition to recreational sales.

Several councilmembers also indicated a willingness to approve between 3-5 permits for cannabis businesses. There also appeared consensus over possibly seeking a lower tax rate than the city’s recently passed ballot measure capping it at 15 percent. The figure is vastly higher than any other East Bay cities. For instance, Oakland taxes cannabis sales at 5 percent, while neighboring San Leandro is proposing 7 percent.

Tuesday night’s discussion amounts to a sea change in the city’s stance toward cannabis. Over the past seven years, Hayward city officials have been adverse to medical cannabis dispensaries. Hayward once had a pair of medical cannabis dispensaries, but following some high-profile instances of crime at the dispensaries and strong opposition from the Hayward Police Department, the city moved to institute exclusionary zoning to essentially ban dispensaries.

The city’s change of heart was also cajoled by the passage of Proposition 64 last November and the signing last fall of a new state law bringing much-needed regulation to the industry. Cities like Hayward have until Jan. 1, 2018, under state law, to declare whether or not they will allow permitting for dispensaries or risk the state issuing the licenses on their own. Therefore, the impetus is on Hayward to take control of its own destiny on the issue.

“It’s going to be all around us and I think we should participate in it,” said Hayward Mayor Barbara Halliday. “We want to regulate it in a way that preserves community safety. We can’t keep it out.”

After giving direction to city staff in favor of moving forward on cannabis, the issue could return to the city council for further discussion in June, said Halliday.