Legal San Diego marijuana growers plan to cluster in Mira Mesa, Kearny Mesa, near border

Most of San Diego’s pot farms and marijuana manufacturing sites will be concentrated in three areas of the city: Mira Mesa, Kearny Mesa and near the Mexican border.

More than 85 percent of such businesses proposed last week during an initial wave of applications are in one of those three areas. That’s primarily because of strict zoning regulations that sharply limit eligible properties across the city.

San Diego is one of the few cities in the state to legalize an entire marijuana supply chain, which will be fully regulated and taxed.

The battle to open marijuana cultivation and manufacturing businesses is expected to be intense because San Diego has set a citywide cap of 40, roughly half of the 78 applicants who requested appointments to submit initial paperwork.

Gina Austin, a local attorney representing marijuana businesses, said by telephone that only about 65 of those 78 followed through last week, softening the competition a bit.

Of the 78 initial applicants, 67 proposed to locate their businesses in either Mira Mesa, Kearny Mesa or near the border.

Councilman Chris Cate, whose district includes both Mira Mesa and Kearny Mesa, said Monday by telephone that he’s worried about having so many similar businesses clustered together, particularly whether they will be a threat to public safety.

“We have concerns regarding saturation,” he said.

Cate said it was predictable that the businesses would cluster in his district because there is an abundance of industrial zoning. That prompted him in August to request some restrictions on the businesses that would go beyond state law.

The final city regulations included many of his requests, but left out his proposal to make each business have a neighborhood liaison and a community outreach plan.

Cate said he hasn’t studied whether clusters of such businesses might provide an economic boost to his district that could outweigh his public safety concerns.

Austin, the marijuana attorney, praised the city for handling the cultivation and manufacturing applications in a way that avoided a repeat of opening day in the battle to open legal medical marijuana dispensaries in 2014.

Three years ago, people lined up like fans of a rock group trying to be first in line for concert tickets.

This time around the city held a lottery instead to determine who could submit applications first, which could mean a leg up in the lengthy and complex approval process for indoor pot farms and marijuana manufacturing sites.

"There were zero surprises — it was so smooth and easy," said Austin, who represents 10 of the applicants. "Nobody sleeping on the sidewalks, nothing. I think the city did a great job.”

Applicants had to submit comprehensive site plans and other information to the city, including a document indicating they either own the site or have gotten express permission from the owner to operate a marijuana business there.

They also had to write checks for nearly $9,000 to cover initial administrative costs, which rose to an average of $25,000 total for applicants who successfully opened dispensaries.

The process includes multiple public hearings, site visits by city planning staff and other hurdles.

The first dispensary didn’t get final approval until nine months after the city began accepting applications, and only four were approved within the first year.

Austin said she expects approvals to come a bit more quickly this time around because city officials and many of the applicants have learned from past mistakes and hiccups.

But she also predicted the cultivation and manufacturing businesses would take longer to actually open than dispensaries because they are more complex businesses logistically.

"My gut feeling is these will be faster in the processing and longer in the build-out," Austin said.

One reason is standards set by the National Fire Protection Association for manufacturing of hemp and liquid forms of marijuana. The standards aim to help prevent explosions and fires.

Because this wave of applicants is dealing with product creation, they must focus more on factors like electricity, ventilation and temperature, Austin said.

"When you were building a dispensary, you were just throwing up walls," she said. “All of this other stuff takes time."

Austin said another source of delay is new state regulations released last week that will force many San Diego applicants to re-design their proposed site plans.

Many of the local proposals envision manufacturing, cultivation and distribution businesses all at one site under one application. But the state rules require separate license holders for each, with separate entrances and exits even if the businesses share the same site.

State officials also recently announced what qualifications pot farm applicants must meet to accelerate environmental approval of their projects by participating in a universal or “programmatic” state environmental impact report for such businesses.

San Diego applicants will need both a state and city permit to operate legally, but the city is allowing them to start the process of securing a city permit before the state begins its approval process in January.

San Diego has also legalized marijuana testing facilities, but they are not subject to the citywide cap of 40.

Roughly 40 businesses already engaged in cultivation and manufacturing without formal city approval will be allowed to continue operating for two years, but they haven’t been given a leg up on obtaining permits that would give them the right to legally operate long term.

The City Treasurer’s Office, which issued business licenses to them, said last week in an email that it hadn’t yet cross-checked its list of licensees against those who submitted applications for new pot farms and marijuana manufacturing businesses.

The ZIP code with the most proposed cultivation and manufacturing businesses is 92121, with 25. It covers western Mira Mesa and Sorrento Valley.

In second place is 92154, which includes Otay Mesa and communities near the border. It has 19 applicants.

In third place with 11 applicants is 92111 in Kearny Mesa.

Next up are 92123, also in Kearny Mesa, and 92126, in eastern Mira Mesa, with six applicants each.

More details on the approval process can be found at sandiego.gov/marijuanainfo.

david.garrick@sduniontribune.com (619) 269-8906 Twitter:@UTDavidGarrick

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