Jeff Malawy

Somewhat begrudgingly, two of the county’s desert cities this month moved to accommodate the ethos of cannabis tolerance that dawned in earnest with the passage of Proposition 64 last November.
Traditionally, San Bernardino County, its cities and officials have been particularly hostile toward marijuana liberalization, even as societal views in general with regard to the drug have changed. Recently, as California began creeping toward the tolerance previously exhibited in states such as Washington and Colorado, in San Bernardino County the state’s prohibition on the recreational use of cannabis, which had been on the books for generations, was yet being spiritedly enforced. Not until 2013, when the City of Needles broke ranks with the rest of the county’s cities, did any San Bernardino County municipality allow, under the rubric of the Compassionate Use Act passed by California’s voters as Proposition 215 in 1996, medical marijuana clinics to be legally set up in their jurisdictions.
Last year, with the campaign on behalf of Proposition 64 going full tilt and reliable polling showing that it was very likely to pass, city after city in San Bernardino County, anticipating the passage of the statewide marijuana decriminalization initiative, dug in their heels and further resisted the trend by codifying ordinances either tightening existing codes or creating new ones outlawing altogether the sale of marijuana within their city limits. Some would-be entrepreneurs, either ignorant of the passage of those ordinances or believing that state law would in some fashion trump local ordinances, set up dispensaries, created distribution networks or established cultivation operations. For some of those would-be marijuana capitalists, things did not go particularly well. Nearly all had their operations shut down and their products and proceeds on hand compensated. Many were arrested. A few, particularly those with large quantities of the drug or ones who flouted the law in some conspicuous way, have been prosecuted.
While this virulent anti-marijuana ethos has continued to persist in many place around the county – in Upland, for example, the voters during the November election soundly defeated one ballot measure that would have allowed up to three medical marijuana clinics to operate in the city and in June the city’s voters passed yet another ballot measure confirming that dispensaries are prohibited within Upland City Limits – in other spots cracks in the cannabis prohibition façade have evinced themselves.
Following Needles’ lead, cash strapped-Adelanto in 2015 moved to allow large-scale marijuana cultivation operations within its industrial park. Initially, the city council drew the line at that level, preparing to permit plants to be grown and harvested and sold wholesale, but continuing to prohibit retail sales or the operation of dispensaries and clinics. The mad rush of investment and property purchases in the aftermath of the opening of the city to marijuana-related agricultural operations caught a lot of attention and more recently, the city dropped the prohibition on clinics and dispensaries. At the county seat, San Bernardino, where the city council had evinced its philosophical opposition to allowing open access to cannabis for medical purposes over the years, city officials in vain sought to ward off the inevitable last year when two groups qualified ballot measures calling for allowing retail marijuana operations in the city. The city council responded by using its authority to place on the ballot a measure calling for the commercial availability of marijuana that was more restrictive than either of the voter petition initiatives. The city’s measure failed and the two others, Measure N and Measure O passed, by 51.1 percent and 55.12 percent, respectively. Measure O was sponsored by vice-impresario Randy Welty, a multi-millionaire who operates directly or indirectly some two dozen adult entertainment venues, pornographic bookstores and peep shoes, along with at least 56 medical marijuana clinics throughout California. Predictably, the first licensed marijuana distribution operation in San Bernardino is owned by Welty.
In the last two weeks, the cities of Hesperia and Victorville did what a generation ago, a decade ago, a year ago or even six months ago would have been unthinkable. In Hesperia’s case, it passed an ordinance which, while yet banning storefront retail sales and the outdoor growing of marijuana, created a regulation regime for the home delivery of marijuana and the basing of such operations within the city of 94,000, as well as the indoor cultivation of the weed. In Victorville, while not yet finalizing anything, city officials there gave indication they are poised to make some concessions to the new reality.
Hesperia’s ordinance stops short of embracing marijuana as a socially acceptable intoxicant on the order of alcohol. Nevertheless, along several narrowly defined parameters it allows those who want to use it to do so.
Hesperia’s lawyers began crafting the ordinance shortly after the council in March voted to put what one council member called a “sensible,” another council member said was a “realistic,” and a third council member touted as a “conservative” approach to marijuana availability. At that time, a majority of the council yet appeared to be opposed to allowing any commercial activity relating to cannabis in the city, but a tipping point came when an elderly woman at a public meeting said she had to drive a great distance to get marijuana to treat her medical condition. A council majority indicated then that some reasonable means of making the drug available to those who truly need it in a medical context should be forged.
Under Hesperia’s ordinance, outdoor cultivation is prohibited, but the six plants each adult is permitted to foster under state law can be grown indoors if such growers register the address of where the cultivation is taking place, renew that registration annually, and ensure that the horticulture confines itself to a locked and secured room or outbuilding. The owner of rented property upon which such activity is to occur must consent to his or her tenant(s) growing it. The city council also expressed its will to impose a yet-to-be-determined fee on those seeking an indoor growing permit.
The ordinance allows distribution warehouses for the delivery services to be located in Hesperia if they are located in the city’s general industrial zone, but prohibits any “medically related” activity there other than that to facilitate the delivery of the product to medical patients, whose prescriptions must be verified by a doctor in order for those deliveries to be made. All activity relating to the warehousing, processing, packaging or storing of the product must be carried out indoors and the receiving and loading of the product must take place behind rather than in front of the building. There can be no displaying of the merchandise inside the delivery warehouses, and no sales can take place on the premises. The warehouses from which the deliveries originate must incorporate ventilation systems to keep the odor of marijuana from reaching adjoining properties. The building in which the warehouse is located is to have no signage relating to marijuana. The warehouses must be outfitted with security cameras and an alarm system. The deliveries are to be made to residential addresses. While one section of the ordinance says the delivery vehicles are to be unmarked, another says the vehicles may include a business name, address and phone number, but are not to bear logos.
According to Hesperia’s assistant city attorney, Jeff Malawy, “The distribution businesses are not intended to be storefronts. Customers will have to order over the phone or by the internet for delivery to take place, which can only occur during daylight hours. The deliveries are to take place at homes. There is a provision that there can be no exchanges of goods on the sidewalk or in the public way, which should stop people from flagging down delivery vehicles.”
The ordinance requires that each medical marijuana distribution business be specifically permitted as a mobile dispensary and, in addition, have a business license. Licensees are to be subjected to a complete background check and those who have been criminally charged with regard to past marijuana distribution within the city or those cited administratively for the same will be denied a license until any past fines or fees have been paid.
In addition to any state fees and excise tax the business is subject to and the yet-to-be-determined city fee to be levied on distribution operations, the ordinance puts forth that the business could be subject to any tax imposed on it by the city as a consequence of a vote by city residents approving such. Medical marijuana retail sales, under the ordinance, remain exempt from state sales taxes.
Malawy told the Sentinel he believes the ordinance is airtight and any challenges of it on constitutional or other grounds will fail.
“There was a provision in Proposition 64 allowing cities to reasonably regulate marijuana use in their respective jurisdictions,” said Malawy. “I think our ordinance is even more lax than most ordinances adopted by cities around the state.”
With regard to a possible challenge over the ordinance’s requirement that the marijuana distribution operators keep a list of customers and addresses that are subject to examination by the government, Malawy said he did not think something like that would gain traction. Liquor store owners are not similarly subjected to obtaining such information on their customers and compromising it to the government. A distinction between intoxicants can be drawn, Malawy suggested. He said, “We consider that to be a reasonable requirement, that marijuana customers be registered for safety reasons. You should understand that from the standpoint of governments regulating businesses, the courts have said that if a legislative body, such as in this case the city council, has a rational basis for making a distinction between two types of businesses, they can impose different requirements on those businesses. We think the city has a rational basis in this case because a business dealing in marijuana might have more of an impact on the community in various ways, such as creating more crime than a liquor business. You might disagree and others might agree. We think that a court looking at it would see a rational reason for treating those two types of business differently. I think our ordinance would meet the constitutional test.”
With regard to the legal defensibility of charging cultivators growing plants for their own use, Malawy said, “We see that as reasonable, as well. Section 11362.b of the Health and Safety Code adopted in Proposition 64 says a fee can be charged up to the cost the city bears in regulating the program. The determination of that will come later when the ordinance is fully adopted. The city will have to do a study to determine how much the permitting program can charge. We are legally prohibited from charging more than what it would take to recover our costs.”
Malawy acknowledged that enforcing the ordinance might present challenges. “There are lots of laws that can be difficult to enforce,” he said. “Things like no sale of the product to those other than those who order it first could be difficult, but section 5.50.100 requires that businesses maintain records with regard to sales and deliveries, and that there be a single accounting sheet for each sale. They are required to keep various records like that on site, which are subject to inspection upon request. If they do not consent to giving us those records, that is reasonable suspicion to get a warrant from a court to inspect their records.”
As to the city reserving its right to ban those who have transgressed with regard to marijuana related offenses in the past, even in the era of tolerance, Malawy said the city was on solid legal footing. “In that, we are applying what the state has told us we can do,” he said, “Under Proposition 64 or laws adopted by the legislature, including Business and Professions Code Section 26057b4, cities may deny a permit for anyone who has been sanctioned in the past for violating a marijuana-related law or ordinance.”
Malawy also spoke to the apparent leeway in the ordinance which would allow the city, speaking through its citizens at the ballot box, to essentially obstruct marijuana availability in Hesperia by yet imposing a tax on the sale of the drug that would be so hefty no customer would be willing to pay it.
“The city council or citizens through the initiative petition process could go to the voters on a marijuana tax proposal,” he acknowledged. “There’s no limit on the amount of a tax to be approved by voters. Legally, that would be fine. But it is not really very likely. If the entire citizenry of Hesperia hated marijuana, the city council would have decided to impose an outright ban. They did not. Remember, in November, the majority of Hesperia voters favored Proposition 64.”
In Victorville this week, the city council there on Tuesday acknowledged that not only has the attitude in the State of California shifted with regard to the acceptability of the use of marijuana, residents in Victorville are moving in step with that trend.
During a discussion of the subject this week that presaged possible future action, Councilwoman Blanca Gomez emphasized that Proposition 64 in November garnered the backing of 56 percent of Victorville’s voters. She said the city should bow to the inevitable by accepting the popularity of cannabis use, move toward sensible “regulation,” and seize the revenue-producing potential the newly accepted way of pursuing intoxication presents. “Taxation,” she said, “makes sense.”
While Gomez was clearly a vote in favor of liberalization, the attitudes of two of her colleagues, Councilman Eddie Negrete and Mayor Gloria Garcia, with regard to giving city residents access – indeed easy and convenient access – to the drug do not appear to be as progressive. Both gave guarded comments this week with regard to moving perhaps as far as Hesperia has in allowing regulated home delivery to certified medical patients, but neither was willing to leap to welcoming brick-and-mortar dispensaries to set up shop.
Most surprising during this Tuesday’s special session of the council, which was aimed at revisiting its eight-year-old ban on commercial marijuana operations in Victorville, was the outright shift of a dyed-in-the-wool ally of the most vociferous of the city’s long-time opponents of marijuana use, and the less radical move toward the center on that issue of another of that passionate marijuana use opponent’s allies.
In 1972, then-California Governor Ronald Reagan appointed Victorville Mayor Joesph Campbell to the Superior Court. Because of state statutes pertaining to the incompatibility of public offices, Campbell was required to resign his elected municipal position to go on the bench. With Campbell’s assonance, the city council on March 7, 1972 appointed Terry Caldwell to fill out the slightly more than two years left on Campbell’s unexpired term. Caldwell spent the next 38 years and nine months on the Victorville City Council, the longest tenure of any Victorville elected official before or since. Along the way, he formed a close alliance and friendship with Jim Cox, who was then Victorville’s city manager. Caldwell would also find himself closely affiliated with Jim Kennedy, the husband of his law partner. When Caldwell chose not to seek reelection in 2010, he and his longtime supporters threw their support behind Kennedy, who was elected. Kennedy was, and still is, perceived as a continuation of Caldwell’s guidance of the City of Victorville. Two years later, Cox, who upon retiring from Victorville later went on to serve as Apple Valley city manager, in 2012 himself successfully vied for the Victorville City Council.
Both Cox and Kennedy not only replicated but embodied much of Caldwell’s philosophy and approach. One firm plank in Caldwell’s philosophy is that drugs are no good. While in office, he supported the sheriff’s department’s zero tolerance of drug offenders, including ones who blew grass or sold pot. He was a prime mover in the city’s stringent ban on marijuana related businesses in the city, which remains in effect. Indeed, as late as February of this year, the council, in defiance of the marijuana liberalization breaking out everywhere in the Golden State, was set to reiterate and intensify that existing ban and ratchet it up a notch or two with even more explicit language prohibiting any type of commercial activity relating to the substance.
This week, however, Kennedy, rather unexpectedly, sounded the alarum of retreat in the war on drugs. Criminalizing the use of marijuana has gone on, Kennedy said “for 70 years.” He then shocked many when he said it was “stupid [to] fight” a pervasive social trend which could not be stopped. He said marijuana has moved from being illicit and a staple of the black market into the economic mainstream. “Let’s allow a certain amount of free trade to happen,” he said.
Kennedy, while indicating that there is money to be made in the private sector from the sale of what was formerly contraband, and that marijuana could prove a boon to the economy that way, said he did not believe governments and city governments in particular stood to end up afloat in a sea of cash as a result of the changes to be made.
Cox came across as less gung ho about hitching the Victorville community’s economic wagon to the rising cannabis star than either Kennedy or Gomez. He did though, say he considered himself “open” to the idea of allowing medical marijuana clinics to operate in town. He was less sanguine with regard to allowing smoke shops selling it as an intoxicant. Still, he said, “I’m willing to look at their proposals,” meaning the dozens of entrepreneurs looking to invest in potential marijuana-related businesses in Victorville.
The council made no commitments, but will send the issue to the planning commission for further consideration before again taking it up. The city wants to redraft the ordinance relating to marijuana prior to a deadline by the state to have all such regulations consolidated.
Through it all, there was something of a tawdry element, from Hesperia to Victorville to other points in San Benardino County, in the way the marijuana gold rush frenzy is playing out: Individuals, officials, politicians and the government entities they speak for, who just a few years ago or less were openly advocating a strict prohibition on marijuana and were in some cases fully supportive of imprisoning those using it or selling it, are now reversing course and saying they find marijuana to be an acceptable element of the community and its culture, just as long as they, too, can get a piece of the action.
Malawy took a stab at explaining the paradox. “When Proposition 64 was approved, maybe the governments, which weren’t going to do any of this on their own, saw the tide turning,” he said. “That gave them the incentive to change their minds and when they looked at the numbers, it gave them the confidence that if they permitted marijuana use it would be okay with their constituents. Majorities in only two of the county’s cities – Chino Hills and Upland – voted against Proposition 64. That was a real turning point. That is an overriding change.”
But before people get carried away, Malawy said, they should consider that marijuana use, sales or activity is still illegal in the eyes of the federal government. “If you get the feds looking at you and they decide you are a bad actor, you can still find yourself in trouble,” he said. –Mark Gutglueck