Hoping to capture greater tax revenue from the burgeoning cannabis industry following statewide legalization of recreational marijuana for adults, members of the Ceres City Council on Monday signaled they want to explore other types of licenses other than manufacturing.
Sacramento lawmakers continue to craft the regulatory framework for the licensing for the production and delivery of medical marijuana as well as recreational marijuana dispensaries. The standards are due to be in place on Jan. 1.
Vice Mayor Mike Kline said he toured a facility and also watched the CNBC TV show "The Profit" starring Marcus Lemonis detailing how cannabis saved the finances of the city of Palm Desert. The city there allows cultivation in a stand-alone industrial area but also allows retail dispensaries in shopping districts.
"It's a totally different concept or thing that I think I thought of before," said Kline. "We need to pull resources together and do a fairly decent comprehensive ordinance we want because it's here and it's not going away. I'm going to keep a very open mind."
Councilman Bret Durossette agreed, saying "it's not going away."
"One of my biggest concerns is that if we take baby steps to get to where we want to go, somebody may jump on the horse faster and then all of a sudden it does us no good here in Ceres," said Durossette. He cited how Ceres' tax base is lagging behind other neighboring cities for lack of retail outlets and restaurants.
"It's going to help our general fund if we do decide to go that route," added Durossette.
Councilman Ken Lane said he remains open minded.
"I think if we don't get onboard it's going to be all around us anyway," said Lane, who likes the city being able to turn down specific applications.
"We'll be able to control how many we have in town."
Councilwoman Linda Ryno said she is open to exploring issuing other cannabis licenses "with the caveat that we need to look really closely at what restrictions we're going to put." She specifically stated her concern about cannabis retailers causing traffic issues for neighboring businesses in retail shopping centers.
Mayor Chris Vierra said he toured the tour of the American Prohibition Museum in Savannah, Ga., and marveled at how booze was portrayed as "poison" and "evil" and condemned in religious circles. "And at that point, whether I believe in cannabis or not, this is hundred years fast forward to the same things they were kind of dealing with at that point. So when I saw that I thought to myself I need to keep an open mind on this because ... when the voters of California decided to take the direction they did, that was the message that was sent."
Vierra said he checked out a cannabis dispensary and was shocked to find the industry "much more mature, much more advanced and a cleaner operation than I thought."
Saying pot is "here to stay - it's not going away," the mayor noted the city needs to "embrace it, work with it."
"If it's not here in Ceres, it'll be in Modesto or Turlock. It's going to be prevalent throughout region."
In June the state crafted the Medicinal and Adult Use Cannabis Regulation Safety Act (MAUCRSA). Under it the state will be creating a singular permitting process under two categories, one starting with an "A" for adult use and the other starting with an "M" for medical marijuana licensing. The state has also clarified that multiple licenses may be granted to the same entity or individual.
Overall the state will be granting 20 different types of licenses in six categories: cultivation, manufacturing, testing, dispensary, distribution and micro-business, the ability to have a combination of licenses.
"You can have one facility that has both licenses, being able to sell product under both licenses," said City Manager Toby Wells during an information session with the council.
The state Legislature and Bureau of Medical Cannabis Regulation are also developing standards for packaging so as to not entice young persons. The minutia of regulations includes license numbers placed in advertising.
"The big one for us is local control is preserved ... recognizing we as a local government have the ultimate control," said Wells. "If we say no the state won't issue a license in either case."
The state allows cities to come up with "reasonable" regulations for those who wish to privately grow up to six marijuana plants for their own personal use on their property, except in apartment or multi-family residential units where it won't be allowed. The city is in the process of drafting regulations based on city ordinances passed by the cities of Waterford, Newman and Indian Wells. Wells said the proposed regulations will be reviewed by the Ceres Planning Commission and City Council sometime in October.
The Ceres City Council determined earlier this year that it won't allow any outdoor or backyard marijuana grows, mostly out of concern about odors and crime.
Also earlier this year the council changed the Ceres Municipal Code to allow certain medical marijuana production facilities in certain zones. It did so to approve a developer agreement for Kase Manufacturing to conduct a medical cannabis manufacturing operation which could be operational by October. The introduction of the business is expected to provide a financial windfall for the financially strapped city.
The developer agreement approved by the city to allow Kase Manufacturing to operate at 4111 Brew Master Drive calls for the business to pay the city fees of $50,000 per month during the first year. The fee increases to $75,000 per month in the second year and $100,000 per month in the third year. The City Council is counting on using half of Reynolds' money months before the project even gets off the ground.
The facility would involve planting, growing, harvesting, drying, curing, grading, trimmed, extracting, or manufacturing plants into cannabis products. The development agreement would give the city to tightly regulate the operation and shut it down if out of compliance.
Kase Manufacturing is proposed by Mike Reynolds, a former Central Valley High School coach, whose son Kase finds relief from seizures related to chromosome 5q14.3 deletion syndrome, a neurocognitive disorder characterized by epilepsy and intellectual disability.