You should never start making up new rules and fees, yatta yatta yatta to accommodate an applicant. 

We are also  not required to provide accommodation by allowing smoking in the building if it is otherwise restricted.  

That does not mean you can't evict - you have to treat "fairly" and offer "reasonable accommodation" if requested.

When I paid $1,700 rent per month for a 3/2 view house in Sausalito in 1994 and then when I bought a Mill Valley rambler in 1997 for $450,000, all of my friends/family/associates who lived outside the Bay thought I was nuts to pay such a huge sum for such modest accommodations. 

If a service dog puts a landlord in a financial hardship, though, the landlord can refuse the request for a "reasonable accommodation" for a disability. 

I pondered whether or not a "reasonable accommodation" could ever come into play, that they need their MJ for their disability. 

In fact around here the number of older people looking for $450-$600/month rents are trending exponential.I have observed so many older people living in unhealthy disgusting accommodations because they can't or will not afford better.

You only have to make a "reasonable" accommodation.  

The law requires that landlords make accommodations for disabilities.  

Make it easier for her and easier on yourself by not setting the bar so high that you can not accommodate this type of scenario.