A "bud" of marijuana for sale at the Santa Ana dispensary 420 Central. Credit: 420 Central

In California’s new era of legal recreational pot, Santa Ana is at the forefront within the region.

The city is home to all 17 of the legal retail pot shops in Orange County, and was the was the only place in Los Angeles and Orange counties where people could legally buy retail pot on the first day it became legal, according to state officials.

“Business has been great,” said David Kapur, general manager of the From the Earth shop in Santa Ana, which previously sold medical marijuana and started retail sales on Jan. 1.

“We had a very long wait in the lobby, and we definitely had a lot of people that were absolutely new,” Kapur said. “We’re seeing an incredible increase in people who have been genuinely curious about trying to partake in something that’s been kept away from them, and it’s kind of cool to see.”

California has gone from being the first state to criminalize it – way back in 1913 – to fully legalizing recreational pot sales Monday, Jan. 1.

Under the new law, anyone age 21 or over now can walk into a licensed retail shop, buy marijuana and carry up to an ounce of it in public – no medical prescription necessary. Following in the footsteps of states like Colorado and Washington, marijuana now is treated similarly to alcohol and tobacco, under Proposition 64, which voters approved in November 2016.

Officials with the California Highway Patrol and Santa Ana Police Department say it’s too early to tell if there’s been an increase in marijuana-related traffic fatalities, as happened in Colorado after it legalized recreational weed.

Retail pot stores are illegal in most cities and counties in California. It’s up to each city to decide whether to allow any shops at all within their borders.

For now, only Santa Ana is allowing recreational marijuana stores, out of the 34 cities in Orange County. Other cities are taking a wait-and-see approach and could open up access in the future, including after city elections this coming November.

In reality, marijuana is already easily purchased at shops across Orange County –  as anyone who’s seen the Weedmaps website knows – despite being banned in every city but Santa Ana. As of last week, the site listed 42 marijuana dispensaries operating in OC cities outside Santa Ana.

But a number of legal changes did happen on New Year’s Day. Here are some answers about what legalization means and how it works.

What changed on New Year’s Day?

This was the first day legal retail marijuana sales could begin at shops licensed by the state government and the local city or county. Santa Ana is, for now, the only Orange County city allowing retail sales, and is starting by allowing its 17 existing medical marijuana dispensaries to also sell recreational marijuana.

Additionally, Proposition 64 legalizes adult possession and consumption of marijuana for non-medical purposes, creates a regulation system for recreational pot businesses, taxes recreational pot, and lessens penalties for marijuana-related crimes.

It also allows cities to legalize a host of other for-profit marijuana businesses – like growing, manufacturing, research, and distribution – though no cities in Orange County have authorized any yet.

Where exactly can recreational pot be purchased in Orange County?

Adults 21 and over are now able to walk into any of Santa Ana’s 17 existing medical pot shops and buy recreational marijuana.

Here’s a list of the existing dispensaries – with names like 420 Central, The Joint, Evergreen, and Bud and Bloom – including their addresses.

Sometime this year, Santa Ana also plans to allow up to 10 new retail pot shops, through what officials are describing as a merit-based selection system. Officials have not yet announced a timeline for accepting applications and approving the new shops.

For existing consumers of medical marijuana, the main thing they’ll probably notice is recreational pot will cost more since it’s taxed higher, said Melahat Rafiei, a Democratic campaign consultant who represents Santa Ana’s legal marijuana dispensaries through the Santa Ana Cannabis Association.

People will see “a huge variety of options” for how to consume marijuana, she said. “If you haven’t consumed, and this is your first [time], go slow…because you don’t want to have a bad experience, nobody wants you to have a bad experience.”

When stores are up and running for recreational sales, they’ll be advertising it widely, she added.

What are the rules for possession, consumption, and driving?

Under Proposition 64, it is now legal to possess up to 28.5 grams (about an ounce) of marijuana for personal use and up to 8 grams of concentrated marijuana, like hashish (this part of the law took effect a year ago, on Jan. 1, 2017).

It is also legal to grow up to six marijuana plants within a private home and keep the resulting product for personal use. Cities and counties cannot ban this.

It remains illegal to possess marijuana at a school, day care center or youth center when children are present.

Adults 21 and over can smoke marijuana and consume pot products in a private home or a business licensed for on-site consumption. It is not legal to consume recreational marijuana at Santa Ana pot shops, according to the city’s regulations.

Additionally, it remains illegal to consume marijuana while driving in a car, in any public place (aside from businesses licensed for on-site consumption), and anywhere that tobacco smoking is banned, such as inside bars and restaurants, or within 20 feet of an entrance or window of a public building.

It also remains illegal in California to drive under the influence of drugs, including marijuana, which police legally determine through a combination of driving patterns, physical appearance of the driver, and field sobriety tests.

There’s no legal standard for a certain blood content level – like .08 percent with alcohol – under which it is illegal to drive in California. State officials are developing those standards, which would be evaluated by blood tests.

Drivers suspected of being impaired by marijuana can be arrested and charged with DUI, punishable by a 6-month driver’s license suspension, thousands of dollars in fines, and jail time.

“Generally, driving under the influence of alcohol, drugs, or a combination of alcohol or drugs is a misdemeanor. Driving under the influence and causing injury (most commonly through a collision) is a felony,” said Jaime Coffee, a spokeswoman for the California Highway Patrol. “Possession of an open container of cannabis in a vehicle is an infraction.”

Drivers can possess up to 28.5 grams of cannabis and 8 grams of concentrated cannabis in the car, as long as it’s not in an open container, Coffee said.

Has there been any increase in marijuana DUIs or other crimes related to retail pot since Jan. 1?

Law enforcement officials say it’s too early to tell. Coffee said the Highway Patrol’s drug DUI data for January, including for the first few days of the year, won’t be released until next month. And the state’s chief law enforcement agency, the Attorney General’s Office, deferred to local law enforcement for such data.

The Santa Ana Police Department’s chief spokesman, Cpl. Anthony Bertagna, said on Wednesday, Jan. 17 that statistics were not yet available for marijuana DUIs in the city since the beginning of the year.

Bertagna said he knew of no major crime incidents regarding marijuana since the beginning of the year.

Under Santa Ana’s policies, the Police Department will receive a portion of the money generated by retail marijuana sales.

Isn’t pot still illegal under federal law?

Yes, federal law bans any possession, use, buying, selling, or growing of marijuana anywhere in the United States, with punishment of up to six months in federal prison for first-time possession of a “small amount” of marijuana.

California was the first state to ban marijuana, through a 1913 amendment to the state’s Poison Act. Other states followed, and in 1937 a federal ban on recreational marijuana was signed into law by President Franklin D. Roosevelt.

That federal ban was fueled, in part, by newspaper articles about violent episodes allegedly attributed to marijuana use, despite scientists at the time mostly disagreeing that there was a link to cannabis.

One of the leaders of the 1930s campaign against marijuana, Federal Bureau of Narcotics Commissioner Harry Anslinger, believed blacks and Latinos were the main users of cannabis, and said pot is “more dangerous than heroin or cocaine” and “leads to pacifism and communist brainwashing.”

“If the hideous monster Frankenstein came face to face with marijuana, he would drop dead of fright,” Anslinger is quoted declaring in the 1936 film “Reefer Madness.”

Fast forward to 1970, and a much stricter marijuana ban was signed into law by President Richard Nixon, an Orange County native. The Controlled Substances Act, which remains in effect today, classified marijuana as a dangerous illegal drug, in the same category as heroin and cocaine, for which there’s no medical purpose.

California then became the first state to legalize marijuana after the federal ban, when voters passed a medical marijuana initiative in 1996 allowing adults with a prescription to obtain cannabis from dispensaries. Other states followed, and eventually Colorado, Washington, Oregon, Nevada, Massachusetts, Maine – and California – went a step further and legalized recreational marijuana.

All along, the federal ban has remained in effect.

The Obama Administration took a largely hands-off approach to enforcing the federal ban against marijuana users in states that had legalized it. Under the Trump Administration, Attorney General Jeff Sessions has a harder-line view of marijuana and recently suggested the feds will start cracking down on legalized weed.

“It’s my view that the use of marijuana is detrimental, and we should not give encouragement in any way to it, and it represents a federal violation, which is in the law and it’s subject to being enforced,” Sessions said at a news conference in November.

Sessions took it a step further last week, repealing the Obama policy and freeing up federal prosecutors to enforce marijuana laws in states like California that have legalized marijuana.

As it happens, one of the most pro-marijuana Republicans in Congress is from the OC: Rep. Dana Rohrabacher, who represents a stretch of coastal communities from Seal Beach to Newport Beach.

While Rohrabacher supports pot legalization, efforts to lift the federal ban have gained little momentum and are not expected to pass anytime soon.

What taxes will pot businesses have to pay, and where will the money go?

Retail pot shops have to pay taxes to the federal, state, and local governments, with state analysts anticipating as much as $1 billion per year for the state and local governments.

While federal law bans marijuana sales altogether, pot shops are required to pay federal taxes on their income, under a tax code section for illegal drug sales. Because their business expenses are not deductible, retail pot shops can end up paying 70 percent or more of their profits in federal taxes – far more than the typical federal rate of 30 percent.

Those revenues go toward funding the federal government, with most tax revenues paying for health programs like Medicare and Medicaid, and the military.

At the state level, Proposition 64 imposes taxes on growing and selling recreational marijuana.

In addition to the existing state and local sales tax of 7.75 percent for Santa Ana businesses, retail pot shops also have to pay a 15 percent state excise tax and additional fees to the city.

The state also taxes the growing of marijuana for retail sales, at $9.75 per ounce of dried marijuana flowers and $2.75 per ounce of dried marijuana leaves.

State revenues from the growing and excise tax are deposited in the new California Marijuana Tax Fund, the vast majority of which is required to be divided between:

  • Youth programs like drug use education, prevention, and treatment (60 percent)
  • Cleaning up and preventing environmental damage from the illegal marijuana growing (20 percent)
  • Programs for reducing DUIs from alcohol, marijuana, and other drugs and grants to reduce any negative effects on public health and safety resulting from marijuana legalization (20 percent)

Additionally, Santa Ana is charging its own fee to each shop: either 8 percent of retail sales, or $25 per square foot of floor space, whichever amount is more.

City staff expect these fees to generate between $1.7 million and $4.7 million in revenue for Santa Ana during the 2018 calendar year. It’s unclear how much of a decline there will be, if any, in medical marijuana revenues to the city.

At the City Council’s direction, the spending of Santa Ana’s retail marijuana revenues will be split in equal thirds between enforcement (like the Police Department, code enforcement, and City Attorney’s Office), community services (like parks and recreation, the city library, and Police Department-operated prevention programs), and administration (like the City Manager’s Office, Finance Department, and other city agencies).

The exact spending allocations will be decided by the council sometime this year.

Santa Ana deposits revenues from marijuana businesses into the city’s bank accounts, “just like any other payment that comes into the city,” said Deputy City Manager Robert Cortez.

“They go through a process of collecting the money, providing a receipt, and then it’s deposited.”

The state handles it similarly, with marijuana taxes money deposited into state bank accounts and invested, according to a state official.

Because it’s illegal under federal law to sell marijuana, the shops cannot get bank accounts where they can deposit the money they make, or accept payment via credit card. The sales are cash only.

Separately, the Santa Ana pot shops have been working with the Santa Ana Unified School District on “a community benefits program,” Rafiei said. Details haven’t yet been announced.

What do Orange County voters think about legalizing recreational pot?

Proposition 64, the recreational pot legalization measure, was supported by a slight majority of OC voters, with 52 percent in favor and 48 percent opposing.

The measure was supported by a majority of voters in 23 of Orange County’s 34 cities, home to 2.4 million of the county’s 3.1 million residents.

Those cities are Aliso Viejo, Anaheim, Buena Park, Costa Mesa, Dana Point, Fullerton, Huntington Beach, Irvine, Laguna Beach, Laguna Hills, Laguna Niguel, Lake Forest, Los Alamitos, Mission Viejo, Newport Beach, Orange, Rancho Santa Margarita, San Clemente, San Juan Capistrano, Santa Ana, Seal Beach, Stanton, and Tustin.

The cities in which voters opposed recreational sales were Brea, Cypress, Garden Grove, Fountain Valley, La Habra, La Palma, Laguna Woods, Placentia, Villa Park, Westminster, and Yorba Linda.

Voter support for Proposition 64 doesn’t necessarily mean residents want pot shops in their cities. In the same election Costa Mesa voters supported Prop 64, they also rejected ballot measures allowing medical marijuana dispensaries in the city.

Rafiei said officials in other OC cities are watching Santa Ana to see how its experience with retail pot goes.

“The thing we’re looking most forward to is being up and running, being able to provide something for the county that nobody else can, and also moving forward and building an even stronger relationship with the community,” she said. “I think people will be very surprised at what cannabis is like when it’s regulated.”

Nick Gerda covers county government and Santa Ana for Voice of OC. You can contact him at ngerda@voiceofoc.org.

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