The city of Salinas is almost doubling the maximum number of cannabis business permits it will issue.
At Tuesday night’s City Council meeting, city council members voted unanimously for an amended cannabis ordinance that increases the maximum number of permits in the cultivation, delivery, manufacturing and dispensary categories from three to five.
Distribution was added as a category as well with a limit of three permits. Testing labs and smart transport sites are also allowed.
Cannabis business owners and industry organizations including Monterey County NORML widely supported the amended ordinance.
“It will provide more opportunity for cannabis entrepreneurs in the area. I feel that five dispensaries will be a good number for Salinas, given the size of the population,” said Joey Espinoza, deputy director of Monterey County NORML. “In the future, I hope they even look to expand the manufacturing permits further as those are not open to the general public, but are important in order to diversify cannabis products.”
The adoption of the ordinance means the maximum number of permits jumps from 12 to 23. Last month the city issued nine cannabis business permits to five businesses; distribution was taken out of the vetting process because there weren’t enough qualified candidates, the city said.
The latest change means companies that were finalists but didn’t make the final cut are eligible for what is now a closed application round.
All applicants can meet with the selection committee and attain information on the reasons behind their score, update their application and are not required to pay any additional fee, said Andy Myrick, the city’s economic development manager who is leading the process.
Salinas Economic Development Manager Andy Myrick addresses City Council on Tuesday night on the amended cannabis ordinance. (Photo: Amy Wu / The Californian)
Myrick, along with Megan Hunter, Community Development Director; David McPherson, Cannabis Compliance Director for Hdl Companies and Matt Pressey, Finance Director sit on the selection committee. Deputy Police Chief Dave Shaw will also join the committee.
In addition, the ordinance streamlines the application process by developing procedures for future application rounds. The amended ordinance goes into effect on Sept. 14.
The following are finalists who are eligible for reapplication:
Cultivation category: applicants are Badfish Gardens, Griffen Holistics and East of Eden.
Dispensary category: applicants are Griffen Holistics East of Eden, Riverview Farms, Collective on Romie and Purple Trilogy.
Manufacturing category: applicants are Badfish Gardens and Riverview Farms.
Delivery category: Compassionate Bay Delivery, Golden Essentials and Central Coast Cargo.
The city council also voted unanimously for a 1 percent interest rate per quarter on the late fee related to the cannabis tax. In the Nov. 8 general election, voters passed Measure L, the commercial tax for the city, which is a tax of up to $25 per square foot of canopy area of marijuana cultivators, as well as 10 percent tax rate to dispensaries.
Local preference
The council’s unanimous support for the new ordinance stemmed from their support for local businesses.
Many of the finalists in the closed application round are based in Salinas.
Councilmember Kimbley Craig voted against the original medical marijuana ordinance and has been concerned about what it would draw from the city’s resources including public safety but voted for the amended ordinance on Tuesday in support of local businesses.
Applicants from other parts of the state supported the amended ordinance too.
Hope Ricks, executive director of Purple Trilogy Inc. based in Los Angeles, is one of the finalists who have an application in the dispensary category. She said she applied for a distribution permit last year when the city opened its application process.
“Everybody’s going to have to get into retail distribution but technically there hasn’t been a category until now,” said Ricks, adding that she feels the city could support eight retail stores.
She also feels there’s no shortage of product and wants to make sure “there are enough outlets for patients to get their medicine.”
Councilmember Gloria De La Rosa supports the medical aspect of the industry.
“We need to make this accessible to our community. There are people who are sick and they need it,” she said.
Streamlined process
Under the new ordinance, the structure of the application and vetting process also changes as follows:
Potentially shifts permit review and approval from the chief of police to a selection committee under the city manager’s office. That committee can include the chief of police or a representative from the police department, and the process will be overseen by the city manager’s office and the city attorney’s office.
The regulation of the industry is likely to impact the following offices: city attorney, city manager, community development which includes code enforcement, fire department, and the police department.
The city will hold a discussion later this year about recreational cannabis; recreational marijuana goes into effect statewide on Jan. 1.
Myrick said the city will need to likely continue to adjust the ordinance as the state’s regulations and policies roll out.
The City Council will receive regular updates on the cannabis industry with the first update in February.
While the fledgling industry has the council’s general support, a number of council members said it is best not to take things slow and not immediately open up the application process.
“I’d rather proceed with cautious optimism,” said Councilmember John “Tony” Villegas.
When the amended ordinance was first presented at the July 11 City Council meeting, there was lengthy discussion over whether the application process should be reopened, and if the finalists who didn’t quite make the initial cut should be given preference.
Unanswered questions including whether applicants would need to pay an application fee again sparked frustration from some cannabis companies who said it wasn’t fair.
Looking ahead
Looking ahead, Espinoza forecasted that the cannabis industry will be “similar to traditional agriculture here,” with the bulk of it grown in the county and processed in Salinas, and sold at retail dispensaries through the cities, county, and state.
In Salinas, the cannabis industry is expected to generate tax revenue of $500,000 the first year (the 2017-18 fiscal year), roughly $1 million to $2 million the year after and as much as $3 million in the subsequent years, said Pressey.
credit:420intel.com