Ceres' first-ever legal medical cannabis dispensary was approved Monday evening by a unanimous Ceres City Council under a development agreement that requires payment of a substantial fee each month.

Pacafi Cooperative, Inc., won approval to open a 6,000-square-foot medical marijuana dispensary in an industrial area north of Hatch Road at 1442 Angie Avenue.

On Oct. 16 the Ceres Planning Commission approved a zoning ordinance change and conditional use permit to allow marijuana dispensaries in industrial zones in a 3-0 vote.

The development agreement outlines that Pacafi will pay a one-time fee of $80,000 and monthly fees to the city based on monthly gross receipts as follows:

• $40,000 per month if $500,000 or less in gross receipts are earned;

• $50,000 per month if between $500,001 and $800,000;

• $75,000 per month if between $800,001 and $1,100,000;

•$100,000 per month if more than $1,100,001.

The agreement will serve as a template if and when other dispensaries want to establish in Ceres, said City Manager Toby Wells. He said such operations will operate "under the strict and tight regulatory guidelines of the development agreement."

Wells said dispensaries for adult recreational use could also be allowed if the state includes it in the permitting process. He said the agreement with Pacafi is for medical marijuana only but said "most experts do expect regulatory structure in the future to most likely come together for adult use and medicinal but as it stands today they are two separate licensing processes."

The state will not issue licenses for any jurisdiction that say they don't want them.

Earlier this year the council approved a medical marijuana manufacturing facility for an industrial area in southwest Ceres. The developer agreement for Kase Manufacturing, 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.

Despite Wells saying that the Angie site had adequate parking, Ceres resident John Warren questioned availability. He was told the business will employ about 30 workers on different shifts and that 34 parking spaces are available along with on-street parking. Wells said customer volume would range from 200 to 500 per day during business hours that generally range from 9 a.m. to 9 p.m. Sales would be made to only those holding medical cannabis ID cards. A typical transaction is less than 10 minutes, he said. Wells said that since the intersection of nearby Hatch and Mitchell is the third busiest in the county, he doesn't feel the dispensary will create significant traffic problems.

"Typically when a new dispensary opens, you'll have some extra traffic ... but currently in Stanislaus County, especially in Modesto, you already have well established dispensaries," said Ceres resident Bridget Ludy, who wants to be licensed to manufacture chocolates with marijuana in Ceres. "So although you're going to have a lot of traffic, it's not going to be overwhelming and typically if they're going to have traffic it's on the weekends."

She noted there are dispensaries in Salida, Empire and north Modesto.

Not all favored the action. Ramona Moore said she is heartbroken that the city is allowing dispensaries in addition to sliding on code enforcement issues.

Pastor Chris Grigson of Valley Christian Church in downtown Ceres cautioned the city, saying, "Trouble does follow that kind of business." He said his ministry deals with drug addicts every day and that "every one of them used marijuana as a gateway drug."

Shelia Brandt said marijuana has helped with pain management for cancer patients and others but suggested limiting the number of dispensaries in Ceres. Wells told her there is no limit but each application would be reviewed on a case-by-case basis.

"I think this should be a go," said Brandt.

At that moment, Ceres resident Don Donaldson got up from his chair and blurted out, "I don't have to go to Tijuana to get my marijuana, I can get it here in Ceruana."

Vice Mayor Mike Kline felt Wells was putting "the cart before the horse," saying the council was to discuss licensing and zoning first. Wells said dispensaries are only one aspect of the new marijuana laws and the city will be looking at licensing for testing labs and distribution.

Councilman Ken Lane agreed with Kline that more conversation is needed about licensing and zoning matters.

"I really think we're in front of the game," said Councilman Bret Durossette. He said voters in California approved medical and recreational marijuana and Ceres should "grab the bull by the horns and see how this process goes." Durossette suggested there needs to be limit on dispensaries but said he likes the tax revenue possibilities since Ceres is lacking in retail.

Councilwoman Linda Ryno said she was initially against dispensaries but changed her mind after seeing one in north Modesto and being impressed with the way it operates. She considers Angie a great location.

Mayor Chris Vierra said while he did not favor state measures that allowed both medical and recreational pot use, the voters approved Prop. 64. He commented too that some of his friends have benefited from medical cannabis. Vierra asked acquaintances what the issues they have heard regarding medical pot and the answer was "We don't hear anything."

"Why all of a sudden we're going to approve one and problems are going to come?" asked the mayor. "They're all around us. I'm not saying that we won't have problems but they're operating now..."

He also noted that marijuana dispensaries can set up outside the city limits "and we can still have the traffic impacts, we can still deal with all the issues and someone else is going to garner the ... revenue that we're getting from the developer agreement."

Earlier this month county supervisors approved marijuana dispensaries.