CALIFORNIA CITY — The City Council will further investigate potential incentives and other changes to its existing rules regarding commercial marijuana businesses, after hearing extensively from members of the public and the industry during its meeting, Tuesday night.
The potential changes were presented by staff for discussion after hearing from what Interim City Manager Anne Ambrose said were multiple developers seeking to establish various types of commercial marijuana businesses in the city, and were seeking assistance in the form of incentives, a new type of license or zoning changes to locate their business.
The staff is seeking policy direction to answer developers’ questions on these matters, Ambrose said.
“We have developers at the door every day. We have applicants that are wanting to build,” she said. “These are questions that have been asked for consideration. What we’re looking for is guidance on what’s the Council’s pleasure.”
Deputy City Attorney Russ Hildebrand emphasized that these were three types of requests received by staff, and that the Council could consider any or all of them as they pleased.
The first request was to freeze the scheduled cannabis tax increases for very large developments as an incentive.
Defining what qualifies as a “large” cannabis business would require more analysis, and could be based on parameters such as the amount of taxes paid, or the cost or size of constructed improvements, according to the staff report.
These companies are seeking certainty for their tax rate, locking it in against any increases that future councils might impose, Hildebrand said.
Councilmember Jim Creighton said he could understand their interest in stability, but wanted it reserved for the largest types of businesses that have a written development agreement with the city.
Also requested by some developers is a microbusiness permit, something not currently included in the city’s municipal code. This type of permit, defined by the state, would allow for a single entity with a smaller-sized cultivation to grow and distribute, manufacture and sell its products. Businesses must have three of the four activities in order to qualify for the microbusiness permit, according to the staff report.
During the discussion, the type of business this permit would cover was compared to a microbrewery, which produces and sells its products on-site with a tasting room.
The microbusiness permit had a great deal of support from members of the public who addressed the Council, some of whom are involved with the cannabis industry seeking to do business in Cal City.
Several members of the public said the businesses would create jobs as well as provide tax revenue for the city and provide an opportunity for smaller businesses to join the industry.
There were also concerns, however, about this increasing the number of dispensaries in the community from the two now operating and allowed under current city code.
Some members of the public, as well as Council members Kelly Kulikoff and Nick Lessenevitch, questioned whether the city could support more dispensaries, or if it would simply spread the customers among more businesses and not increase the tax revenues to the city.
Others, including some in the industry, stated there are not enough retail cannabis outlets to adequately serve the area.
Mayor Jeanie O’Laughlin supported the idea of permitting microbusinesses, but wanted them confined to outlying areas near highways 58 and 14 where they can capture business from the traffic on those two routes.
“I think that there would be a lot of new revenue,” she said.
The third consideration requested is for rezoning in the area of the former Silver Saddle Ranch, which does not currently have the industrial zone required by the city’s code.
One suggestion to handle this issue would be for a planning overlay for the area in question, which would allow the cannabis business use without completely rezoning the area. Creighton, a former Planning Commissioner, said he would support an overlay, but not a complete rezoning.
Former Councilmember Ron Smith opposed all the suggested changes, stating the city had already made too many changes to the original framework promised residents.
“Things are not anywhere close to where they were,” he said. “Promises should be kept.”
After more than an hour of discussion, the Council agreed to direct staff to bring back formal proposals for a policy to freeze the cannabis tax at an initial level for large businesses with a development agreement signed with the City, microbusiness permits and a zoning overlay, which would be developed by the Planning Commission.