Councilmember’s plan will stall new businesses in district 2

Saying his district is saturated with cannabis outlets, North Sacramento Councilman Sean Loloee is asking the city of Sacramento this week to impose an emergency moratorium on new marijuana permits in that area, to give the city time to rethink zoning rules.

The request is opposed however by economic equity advocates, saying the moratorium could undermine efforts by people from communities of color to finally create a niche of their own in California’s new “Green Rush.”

These are the same communities that were hit hard – for decades – by the government’s war on drugs, but have since been shut out of the now-legal sales market.

“The moratorium will directly hurt all applicants in the CORE program that the city received state money for,” said Kevin Hooks, who is part of a group that applied for a business conditional use permit under an unusual new city program, the Cannabis Opportunity Reinvestment and Equity (CORE) Program.

“CORE members who are hoping, or in process, to lease space in District 2 for any and all cannabis businesses will be immediately frozen.”

Marijuana storefront dispensary permit applicant Kevin Hooks speaks during a press conference in front of Sacramento City Hall on Wednesday, March 31, 2021. Cannabis owners who went through Sacramento’s Cannabis Opportunity Reinvestment and Equity Program say they will be detrimentally affected by the proposed moratorium by Sacramento City Councilman Sean Loloee. Daniel Kim

Loloee and some community leaders say they want an immediate time-out so that the city can study the impacts of cannabis businesses on residential areas and other businesses in District 2, and to consider imposing a cap on the number of marijuana businesses allowed in the area. Council District 2 includes the neighborhoods of Robla, Hagginwood, Del Paso Heights and Woodlake.

The City Council will hear the matter at its Tuesday evening meeting.

“I think it is fair to take a pause, and look at the regulations to make sure the outcome is what the city and District 2 needs and desires,” Loloee said.

The move to reconsider Sacramento’s cannabis regulations isn’t a surprise. Before Loloee’s election last November he had taken a hard line against industry expansion in his district, pointing out that more dispensaries means “more drugs in our neighborhoods.”

Speaking to The Bee this week, however, he said he supports cannabis businesses in general, but wants to see them more evenly distributed around the city.

For now, under city zoning rules, cannabis companies are limited mainly to locations in industrial areas.

As a result, of the 234 cannabis business permits issued in Sacramento so far, 142 have been in the highly industrialized District 6 in the southeast portion of the city. Loloee’s district has the second most, 41. A high percentage of requests in the pipeline for new cannabis businesses in the city target his district as well, he said.

No other council district has more than 23, and several have none.

Loloee had requested a 12-month moratorium on new businesses in his district. City staff is recommending an initial 45-day moratorium that can be extended up to two years by the council, if desired.

Loloee’s request is being challenged, however, by entrepreneurs from communities of color who have been working for several years to get their own footing in the industry. Ten members of that group were chosen earlier this week to receive city assistance to obtain use permits to open dispensaries as part of the city’s CORE program.

The program was created to help communities that dealt with higher arrest numbers for illegal sales in the past, but that have been shut out of the competitive legal cannabis sales businesses. The program is administered for the city by the Sacramento Asian-Pacific Chamber of Commerce and the Greater Sacramento Urban League.

“We are requesting the city take time to define this moratorium and to exempt CORE participants,” said one of those participants, Malaki Seku Amen of the California Urban Partnership, a Sacramento-based entity that pushes for economic opportunity for communities of color.

Loloee’s proposal also appears to overlap with an upcoming effort by the city’s Office of Cannabis Management to conduct a broader review of where cannabis businesses – including cultivation, manufacturing and storefronts – are being located citywide.

Davina Smith, head of the city cannabis management program, said her office hopes in the next few weeks to launch a citywide study of where marijuana businesses are locating, why and what affect that has on the city.

“We need to know citywide how (cannabis rules) are working,” Smith said. “That is the preferred approach” rather than focusing on one district. “It provides more data.”

Who benefits, and who is shut out?

Sacramento officials acknowledge the city’s burgeoning cannabis industry is out of balance in terms of equity, and that the city needs to take steps through the CORE program to rectify that.

Last October, the City Council amended Title 5 of its cannabis regulations to allow 10 new storefront dispensary permits within the city limits, all of which must go to a business that has completed the CORE program.

The CORE program provides training, mentoring, financial and technical support and other assistance to help people from communities who have been disproportionately effected by the war on drugs tap in to the cannabis industry.

Among those attempting to enter the business is Kevin Hooks, one of 84 applicants for the 10 open permits.

Hooks and his two co-owners have an approved lease for a brick-and-mortar located at 700 El Camino in District 2. They’ve applied for a Conditional Use Permit for delivering and distributing cannabis products.

The moratorium would freeze their CUP, preventing their business from its debut – until further notice.

Those who are interested in expressing their views on the moratorium agenda item can contact Loloee, their council member, and/or Mayor Darrell Steinberg.

Written comments online or call-ins are welcome during the April 6 public hearing, city officials said.

Marcus D. Smith covers Black communities for The Sacramento Bee. Marcus is an alumnus of Texas Southern University in Houston. Marcus was raised in Sacramento and is excited to be back home following his passion in journalism.

Tony Bizjak has been reporting for The Bee for 30 years. He covers transportation, housing and development and previously was the paper’s City Hall beat reporter.

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