The Associated Press
September 14, 2011, 9:01AM ET
 
San Jose lawmakers took a major step toward downsizing and regulating the city's thriving medical marijuana industry on Tuesday, adopting a package of zoning regulations and laws that will sharply limit how and where pot collectives can operate and initially cap their number at 10.
 
Two years in the making, the new rules given preliminary approval by the City Council with an 8-3 vote are among the most detailed among the various frameworks local governments in California have adopted as they attempt to tread the thin line between complying with the state's medical marijuana laws and inviting intrusion from the federal government, which does not recognize pot for medicinal use.
 
Along with restricting the number of dispensaries, San Jose's regulations also will require licensed collectives to grow all the medical marijuana they distribute on-site, to maintain logs detailing every amount they sell and to whom, and to package their wares in child-proof containers that list the name of the recommending doctor and the patient.
 
City officials estimate that San Jose, the nation's 10th-largest city, has about 140 cannabis dispensaries and delivery services, only 71 of which are paying a local tax on such services the council adopted earlier this year.
 
"It seems to me we have a lot to learn as we roll these things out, and it's probably better for us to make those mistakes in a smaller fashion instead of letting the genie out of the bottle," Councilman Sam Liccardo said. "Although I think we all recognize the genie has run amok."
 
A handful of residents who use medical marijuanaor work for the existing clubs complained that the policies were too restrictive and urged the council to license at least 25 dispensaries. Dispensary operators also vigorously opposed the on-site cultivation provision, saying they would have to plant huge gardens that would make them targets for federal drug raids.
 
"There are those of trying to do things the right way,and we feel attacked," Ace Salvatore, director of CV Care collective, said.
 
Craig Beresh, director of the California Cannabis Coalition, warned the council that he would sponsor a ballot referendum to overturn the regulations if they were adopted. Last week, his group successfully stalled a new law that would have prohibited pot clubs in Kern County by submitting enough signatures for a referendum.
 
"Well, now I know why many cities banned it altogether," Mayor Chuck Reed quipped as the council was urged to delay its vote.
 
If the council gives the regulations final approval on Sept. 27, clubs would compete for the 10 operating licenses through a first-come, first-served registration process starting in November. Those that do not win a slot will be ordered to close.
 
The ones allowed to operate under the new regulations would be required to close by 8 p.m. and prohibited from having any on-site ingesting or occupying street-level storefronts in areas that get a lot of foot traffic.