NEW YORK (MainStreet) — As both recreational and medical access to cannabis expands around the country, San Jose appears to be headed in the other direction. In June the City Council voted to limit dispensaries in the city to industrial zones. Of the 78 dispensaries then in operation only 13 would have been able to remain in business without relocating.

Despite the passage of the ordinance two months ago, the city waited nearly two months to begin enforcement. The deadlines have now been issued. Businesses have until October 17 to apply for a new license to bring them into compliance. If they have not done so by that point, they will be given 30 days to shutter operations.

"[San Jose] is a destination location for medical marijuana patients throughout Santa Clara County but it has not always been that way," said Chris Lindsey, a legislative analyst at the Marijuana Policy Project. "Dating back to about 1997, San Jose was known as a black hole for dispensaries – none were allowed because of former bad press and a difficult environment for business due to a strong police lobby."

Five years ago, however the local market seemed to change. "At one point, explains Lindsey, the city "became a popular location for businesses and patients and had as many as 148 dispensaries.

"The federal government sent out letters to business owners threatening them with prosecution and a large number closed," he said. "Since then there have been at least two rounds of letters sent out by the city, reducing the number even further."

The situation in San Jose is one of the inevitable results of a state that moved first to legalize medical use almost 20 years ago and has faced opposition from both federal and local forces ever since. The City Council of San Jose has never had a predisposition politically to support this vertical however popular the weight of public opinion. As such, the City Council has now expressed that divide in opinion by seeming to create a "compromise" position that would have the net effect of closing down the majority of currently operating dispensaries.

Per Lindsey, the City Council "did not want to implement a moratorium because it would have been required to grandfather businesses that were in existence at the time. It took a while to craft a plan that appeared to impose regulation but effectively banned most businesses by limiting them to industrial zones."

The move comes at an interesting time for the industry. On a state level, Florida voters are gearing up to legalize medical use in November. For a city in California, which as a state legalized medical access a generation ago, to cut down so drastically comes as a surprise move particularly to outsiders who may think that at least medical use is a foregone conclusion in every city in every state where cannabis is legal for medicinal purposes.

On a local level, the situation in San Jose will impact access dramatically, particularly for medical patients.

"It will have a huge chilling effect, without a doubt and seriously ill patients will be denied access to regulated, safe, medical marijuana without having to drive long distances," Lindsey said. "The county has now implemented its own ban, which prevents businesses from moving out of the city into unincorporated parts of the county. Patients in Silicon Valley will have to drive to San Francisco, Santa Cruz or Oakland."

As such, San Jose stands as a cautionary tale of what can happen in an unwieldy state market. Many advocates involved in political reform also see this move as a failure of the reform community to effectively engage with the city. In the case of San Jose, local opposition ran so high at least in the city's elected political elite, that even the considerable taxes raised by cannabis sales were not enough to sway reluctant local politicians. As Lindsey said, "Certainly cannabis laws are changing around the country, but there is still opposition willing to work against the will of the people when it can."

Read More: Carolinas Eye Cannabinoid Reform Warily

By decision of the State Supreme Court earlier in the year, municipalities have the right to ban local medical marijuana dispensaries despite the fact that marijuana is legal for medical use under state law. As a result the state may see at least in the short term, more cities like San Jose where there is a rollback on access due to strong opposition among powerful forces arrayed against reform. As Lindsey predicted, however, no matter the immediate if in some cases dire impact this will have for patients, municipalities across the country in every state will more frequently face similar decisions.

Per Lindsey, about the situation in San Jose, "Short term, it will shut down the vast majority down and that is the goal. Longer term, I think it is likely many - perhaps different - businesses will return. Marijuana is not going away, medical marijuana access is popular in the city, and those in control of the city council will not be there forever."

--Written by Marguerite Arnold for MainStreet