Cannabis Businesses are Encouraged by New Laws

By Zachary Clark Daily Journal staff

Small business owners who have been legally delivering cannabis in Redwood City for years have been hoping to also headquarter their operations in town for about as long.

That recently became possible after the City Council approved the city’s first commercial cannabis regulations, which passed a second reading at a meeting Monday. The regulations apply to marijuana delivery operations without walk-in retail and nurseries that grow and sell immature starter plants in the city’s industrial zones.

“We’re excited for these ordinances so we can actually put down roots here and make sure the city we’re operating out of is getting the correct amount of tax revenue and benefiting as much as us,” said Alec Gillis, co-founder of medical marijuana delivery service Harvest Bloom.

Brendan Kelly, founder and owner of CEAS Collective, and Mike McGillis, owner of Patio Wellness, are also eager to “put down roots” in Redwood City, and have been intently following the evolving regulations. McGillis and Gillis specifically have been working closely with city staff throughout the process, lending insight into their industry, state law and the various obstacles they face.

And while these cannabis entrepreneurs are encouraged by the city’s direction, there remain many obstacles to opening shop in Redwood City, chief among them being a scarcity of vacant land in the permitted industrial zones and even fewer landlords willing to rent to cannabis businesses. The cost of various fees and other requirements, including security personnel, also add up.

In an effort to limit barriers to cannabis businesses, city staff this month will recommend the Planning Commission also allow these businesses in the Conditional Office (CO) zoning district, which would require final approval by the City Council, according to a staff report.

At the hearing April 9, the City Council also lowered the required buffer zone between the property lines — not front doors — of cannabis businesses and “sensitive receptor” sites, which includes parks, schools and children’s centers. Staff had initially recommended a 1,000-foot requirement, but the council voted for the state-mandated 600-foot option.

That particular requirement still has some concerned, including councilmembers Diane Howard and Jeff Gee, who voted against the ordinance in April in part because of the 600-foot setback.

At Monday’s meeting, several residents speaking on behalf of the nonprofit Casa Circulo Cultural also expressed their support for the 1,000-foot buffer, citing concerns about the children that organization serves.

Education

While McGillis said he’s sympathetic to the concerns of many and understands a slow, cautious approach to commercial cannabis, he also said there needs to be more education on what delivery businesses like his entail.

“It’s all pre-packaged, pre-sealed cannabis in locked cases. It’s like most other distribution businesses,” he said. “It’s not like we’re processing cannabis in Redwood City, that’s never been on the table. People need to understand we’re not growing or cutting down plants here, that’s all done in Monterey and Santa Cruz counties.”

McGillis said that some system whereby businesses are approved on a case-by-case basis is the best approach, adding that such a system would allow neighborhoods to weigh in and be part of the process.

McGillis was born in Redwood City and Gillis currently lives in town with his wife and business partner, Sommer Gillis, who was also born and raised in the city, as were their children.

Alternative pain management

The husband-and-wife team got into the business after Sommer Gillis underwent multiple back surgeries, including a spinal fusion at the age of 33, and was prescribed “a ton” of painkillers.

“It really limited her quality of life and someone asked if we had heard about medical marijuana CBD and alternative methods of pain management and we wanted to look into it,” he said.

She started treating her pain with THC and CBD, or cannabidiol, which does not create a high, and was able to wean herself off painkillers, which inspired the couple to pursue a side project that turned into a full-time job within months.

“Since then, it has become a passion,” he said.

Their medical marijuana delivery operation supplies a broad spectrum of patients, he said, including housebound people suffering from severe illnesses. One such patient with severe autism, ADHD and other disorders was exhibiting symptoms of self-harm, which Gillis said disappeared after taking a tincture with high doses of CBD. That tincture also reduced the patient’s reliance on medication, he added.

Research

CEAS also operates in Redwood City and beyond; its founder, Kelly, currently rents office space in the city while searching for property to open a delivery center.

Kelly is a doctor of pharmacy and founded CEAS while in pharmacy school, and hopes to eventually open a lab and focus his efforts on researching formulations and developing cannabis-derived medicine.

He said he developed a cannabinoid formulation for patients with diabetes and a potential patent is pending.

The drug is meant to be prescribed before insulin therapy is necessary, he said, adding that the oral medication lowers blood sugar levels and does not contain enough THC to have an intoxicating effect.

Kelly said he’s especially interested in improving quality of life and researching cannabis-derived medicines to treat pain, inflammation, anxiety, depression, post-traumatic stress disorder and other mental health disorders.

“Based on prescription drug use for antidepressants and anti-anxiety drugs, there’s a need for cannabis and I believe it can provide many health benefits beyond these pharmaceuticals,” he said, adding that opioid use has decreased in states that have eased restrictions on marijuana, though it can’t be said with certainty that’s the reason why.

Kelly said he’s also interested in cardiovascular health.

“Heart problems are generally due to inflammation. High cholesterol causes inflammation in muscles and a CBD drug can reduce inflammation and could significantly reduce the number of heart attacks, strokes and cardiovascular diseases,” he said.

While cannabis is still controversial, many of its benefits are well documented and continue to be researched; Kelly mentioned Israel specifically as a leader in the field.

Redwood City is, of course, a long way from Israel, but the recently passed ordinances do allow for some research and development in nurseries.

Third phase

The new regulations represent the third of a four-phase approach to commercial cannabis that the council adopted in response to statewide legalization, which took effect in January. The first phase in November included a ban on all commercial cannabis activities, except deliveries of medicinal and adult use cannabis by retailers located outside the city. The second phase involved outreach to businesses about licensing and taxes. The fourth phase entails potential regulations allowing storefront retail cannabis businesses in 2019.