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Supes to vote to create Office of Cannabis, extend temporary restrictions on pot cultivation permits

San Francisco is slated to approve the establishment of an Office of Cannabis on Tuesday, less than six months before the office will start approving permits for business owners to sell marijuana to adults for recreational use.

Included in Mayor Ed Lee’s budget proposal, the $700,000 office would operate under the direction of City Administrator Naomi Kelly, who would hire its director.

Supervisor Jeff Sheehy is the lead sponsor of the legislation to create the office. The Board of Supervisors Rules Committee recommended its approval last week after making some amendments, including requiring that the office’s director recommend approval of fees for permit application and annual licenses by November 1.

Of the $700,000 for the current fiscal year, most would pay for three positions, including the director, and the remaining $225,000 would go toward website design and outreach.

Sheehy scaled back his initial proposal to have a full city department and a city commission. “After many discussions it seemed that the better approach is an Office of Cannabis, which is more streamlined and less expensive,” Sheehy said at the hearing last week.

The board’s Budget and Finance Committee will hold a hearing on the legislation on Tuesday morning. Later that day, the full board is expected to vote on the proposal to create the office — the same meeting where the board will vote whether to approve Mayor Ed Lee’s $10.1 billion budget proposal.

Also on the marijuana front, the board’s Land Use and Transportation Committee will vote today on extending six-month interim rules adopted in January that restricted permits for cultivation of marijuana.

The City has permitted cultivation operations in the past under Indoor Agriculture uses defined in Planning Code Section 102, but in response to worries about more grow operations moving in with legalized recreational use and gobbling up more manufacturing space, The City effectively ceased issuing those permits in January, and is developing new controls as part of a broader regulatory effort.

The City’s proposed regulations for recreational adult use are due by September, per the mayor’s directive following last November’s passage of Prop. 64 which legalized recreational marijuana in California.

The full board is slated to vote on Tuesday on extending the interim controls, if the committee approves of the legislation Monday. Extending the interim controls gives The City more time to figure out long-term rules.

The Office of Cannabis would not supplant, but add to the existing permitting of marijuana dispensaries, which involves approvals from the Fire Department, Public Health Department and Planning Commission.

“The workflow will in many ways be the same. It will still go to planning. Then it goes to DPH, [and the Department of Building Inspection] has to do their inspections. The Fire Department still has to sign off,” said Adam Nguyen, finance and planning director, of the City Administrator’s Office. “The new Office of Cannabis would issue the final operating permit.”

The office could could revoke or suspend issued permits for violation of the rules. The office will also provide “recommendations to the board, the mayor and others in terms of regulating this industry as it evolves,” Nguyen said.

Some have argued the new office will only add more bureaucratic hoops and fees.

Supervisor Sandra Fewer said last week that San Francisco is seeing more “larger corporate-style dispensaries supplanting smaller community-based operators” and asked if “adding an additional layer of bureaucracy and cost” would make it “even more difficult for smaller operators to operate in our city.”

Nguyen said that “the office is intended is intended to be lean, efficient and not create a burden.”

He added, “In terms of the fees and what they will be in the future, those will be proposed to the board.” The fees are intended to fund the office’s operating budget.

The state is expected to begin issuing licenses to sell recreational marijuana for adults beginning Jan. 1.

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