WHEN United States Attorney General Eric Holder announced in February that he would stop ordering federal law enforcement raids on medical marijuana providers as long as they complied with state law, entrepreneurs around the country scrambled to open their own pot shops. Santa Cruz, being ahead of the curve on all things cannabis, already had two dispensaries in town, but city officials say they still received more than 60 calls from interested growers between then and June, when a temporary moratorium was put on all dispensary applications. Now, after last Thursday's meeting of the Santa Cruz Planning Commission, city leaders are one step closer to making the temporary freeze of two pot clubs in town permanent.

"I don't see a long line of citizens asking for more medical marijuana dispensaries in the neighborhoods," said Planning Commissioner Judy Warner at the meeting before voting in favor of the ordinance, which passed 5-2 but would still need approval by the Santa Cruz City Council before becoming law. "I just don't see that there is a need for more than two."

The two dispensaries already in business--Greenway Compassionate Relief at 140 Dubois St. and the Santa Cruz Patient Collective at 115 Limekiln St.--told city planners that only 25 percent of their clients live in Santa Cruz and the rest come from elsewhere in the county and surrounding region. Supporters of the dispensary cap say this shows that local residents are well taken care of and that Santa Cruz would become a regional supplier of legal pot for much of Northern California if more dispensaries are allowed to open. Opponents of the rule, however, point to the high prices at the local dispensaries--one gram typically sells for $15-$25, as opposed to street prices, which usually run $10 per gram--as evidence that more competition is needed. Classic supply-side economists of the Reagan era would likely agree.

The issue will go before the City Council in January, and several councilmembers proved relatively split on how they might vote. Santa Cruz Mayor Cynthia Mathews and Councilmember Ryan Coonerty both say they think that other communities need to step up and provide their own dispensaries, and that a cap in Santa Cruz will encourage them to do so. Councilmembers Don Lane and Mike Rotkin, however, are more skeptical of the cap, saying pot prices in town are too high and that the ordinance needs to do more to increase competition.

"I think there should be a cap," says Rotkin. "I'm just more inclined to make it three or even four dispensaries."

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