Hayward City Council tells city manager to begin accepting applications for cannabis permits

HAYWARD CITY COUNCIL
Hayward was originally one of the first cities in the East Bay to allow medical cannabis dispensaries. But after concerns over the safety of its dispensaries, including one instance when the current mayor toured one such establishment while it was being robbed, the Hayward City Council closed them down and placed a moratorium on zoning in 2010. Times, though, have changed significantly even since just a year ago in Hayward.

On Tuesday night, the city council voted to direct its city manager to begin accepting applications for all types of cannabis businesses, including dispensaries and cultivation sites in Hayward. The vote was 5-0, with two councilmembers absent.

Support for cannabis at Hayward City Hall is a stark reversal from previous years, but last year Hayward voters strongly supported the statewide legalization initiative, in addition, to a local ballot measure authorizing the city to levy a tax on cannabis up to 15 percent of gross revenues.

Furthermore, the city council chose to embrace a far more aggressive foray into cannabis than recommended by city staff. The council directed staff to study whether dispensaries would fit in the downtown business district. The move is opposite sentiment expressed at a council meeting in March.

A downtown dispensary might bring more foot-traffic and attract more young people to the area, said Councilmember Al Mendall. “It fits with what we’re doing downtown,” he said. “For better or worse this will do that.”

A staff recommendation to limit the number of conditional-use permits to three, covering all types of cannabis businesses, was met with skepticism by the council, as was a proposal to award permits to qualified applicants via a lottery system. In this manner, said Hayward City Attorney Michael Lawson, the city could be more objective and avoid being subjected to a “beauty contest” by prospective candidates.

“It is highly unlikely that would result in set of biz that makes sense for us,” said Mendall. Councilmember Marvin Peixoto added the city does not apply a lottery system to other types of businesses. “Don’t we want the best possible businesses first?”

Like many other Bay Area cities contemplating participation in the burgeoning cannabis industry, several Hayward elected officials expressed reservations about how it will affect the city.

Hayward Mayor Barbara Halliday noted the city was an early adopter of medical cannabis dispensaries “and that didn’t work out so well… But this is somewhat different. We saw it coming and it was passed by a majority of voters.” she said of last November’s tax measure. “We are being cautious because we don’t want to make big mistakes.”

“I’ve got concerns about this whole process we’re getting involved in,” said Peixoto. “I’m not going to lie and say I’m not worried.” He added the learning curve will be steep for Hayward, but lessons can be learned from neighboring cities that are farther along in enacting cannabis legislation.

Some on the council dais may already be doing so. On Tuesday, Councilmember Elisa Marquez referenced Oakland’s equity permit program, created to allow underserved and historically disenfranchised groups a chance at gaining a permit. Later, Halliday said she has spoken with an elected official in Oakland about that city’s early proposal to create a regional public bank. Because of the federal government’s prohibition on cannabis, access to secure banking services are a hindrance to cannabis businesses. The resulting cash-based establishments are then at risk for robberies.

Meanwhile, applicants hoping to gain one of Hayward’s conditional-use permit will also need to put some cash up front. A refundable $5,000 application fee was approved by the council. The amount was significantly boosted from the $2,000 recommended by city staff. “I want serious business people,” Mendall said of the increase. “I don’t want Joe and his backyard operation.”
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