Contra Costa County – MJ Shareholders

Editorial: Local marijuana taxes would harm legal pot market

MJ Shareholders — Wed, 24 Oct 2018 21:15:18 +0000

More local taxes threaten to undermine California’s fledgling legal pot industry and drive consumers underground to purchase their weed.

Voters should reject proposals on the Nov. 6 ballot for new marijuana business taxes in Union City (Measure DD), Emeryville (Measure S) and unincorporated Contra Costa (Measure R),

One key argument to California voters in 2016 for legalizing marijuana was that it would help wipe out the black market by allowing consumers to buy their pot at local dispensaries.

The marijuana would be safer, taxes could help cover related law enforcement expenses, and illegal cultivation and production, along with the associated crime, would be curtailed.

The problem is that it’s apparently not working, or at least not nearly as well as promoters and state officials had forecast. Legal marijuana sales have fallen far below expectations — state tax revenues were less than half what was forecast — while illegal sales continue to flourish.

One major concern is the high level of state and local taxes, which can add as much as 40 percent to the price of legal pot. State lawmakers this year even proposed lowering the state tax. While the bill didn’t pass, it should be a wake-up call: This is no time for more local governments to start jumping on the weed-tax bandwagon.

Voters wanted a legal marijuana market. Let’s give it a chance to take root.

Martinez council leery about letting marijuana business operate in same building as ‘youth center’

MJ Shareholders — Mon, 24 Sep 2018 17:00:00 +0000

MARTINEZ — Though most City Council members said Wednesday they’re OK with having a medical marijuana dispensary in town, they noted that putting one next to a gym visited primarily by children and teens may not be a great idea.

The council postponed deciding whether to grant operating permits to the Firefly Cannabis dispensary until the city finishes drafting its marijuana ordinance, likely before the end of the year.

That ordinance could allow for two retail cannabis businesses (medical and/or recreational) as well as two delivery businesses and a single manufacturing business, distribution business and testing lab. Martinez could become Contra Costa County’s first city to allow retail cannabis if the ordinance is approved.

Councilwoman Noralea Gipner said she supports Firefly’s application and doesn’t view the Power Endurance training facility as a youth center. State law requires a buffer of at least 600 feet between marijuana businesses and places where kids gather.

But Gipner’s council colleagues and the many people who packed the council chamber felt otherwise. Their common refrain was that they want a dispensary in Martinez, just not next to a gym/training center in the same building on Sunset Drive where about two-thirds of its clients are kids or teens.

Councilman Mark Ross said he visited Power Endurance unannounced one day and found mostly kids there.

“Both missions are beneficial … I want you both in Martinez,” Ross told representatives of Power Endurance and Firefly. But “this is a wholly incompatible location issue,” he added.

Though there was disagreement Wednesday night about whether Power Endurance owner Maurice Jones-Drew knew before he signed his lease at 4808 Sunset Drive that a cannabis business was coming in, Ross said Jones-Drew was there first.

The “youth center” question kept coming up during the discussion, and Mayor Rob Schroder said the city must set its own definition.

That question also dominated a July 30 meeting of the Planning Commission, which approved Firefly’s conditional use permit and recommended the council allow it to operate at the site.

A week later, attorneys for Power Endurance appealed the commission’s action, saying the facility qualifies as a youth center and is unsuitable for a cannabis sales business.

The City Council heard from 34 people Wednesday, 14 of whom supported Firefly’s permit applications. A few of them said a medical cannabis business should be compatible with young people.

“The classic NIMBY, that’s what this is all about,” Martinez resident Jane Pitts said. “I vote for “IMBY;’ I want this in my backyard.” She said the youth center question is a “red herring.” Other speakers touted the value of cannabis in helping sick relatives and friends.

But the majority of speakers said putting a cannabis business next to a gym would tempt kids and possibly jeopardize the gym’s future because parents would be wary of dropping them off there.

“If this affects one of our children, it affects us all,” said Lisa Hernandez, a San Ramon resident and mother of a child who trains at Power Endurance. “You’re putting children at risk the second they walk onto that (parking) lot.”

While the city’s cannabis ordinance is being crafted, Ross said he is willing to help the Firefly people find an alternative spot in Martinez. “I’d be happy to mediate,” he said.

Reach Sam Richards at sam.richards4344@gmail.com. Follow him on Twitter at @samrichardswc

Martinez sets plan in motion to allow marijuana businesses

MJ Shareholders — Thu, 06 Sep 2018 22:45:19 +0000

MARTINEZ —- A plan to manage commercial, retail and other marijuana-related business ventures should be prepared as early as mid-November, the Martinez City Council decided Wednesday night.

In addition to commercial marijuana businesses, the council indicated it would put out the welcome mat for a couple of retail operators, two deliverers, a manufacturer, a distributor and a testing lab.

When a “cannabis management program” is in place, prospective business operators could apply for the precious few licenses. Such a program will specify where in the city cannabis-related businesses can operate, establish a “pre-vetting process” to weed out prospective operators, require public hearings and set up a buffer of at least 600 feet between cannabis businesses and schools, daycare centers, youth centers and other “sensitive” uses.

City staff had urged the council to ban cultivation businesses, which a consultant told it are the source of most odor problems.

The council has taken a cautious approach toward marijuana operations. In November 2017, it imposed a temporary moratorium on all commercial marijuana activities but allowed Firefly Health Corp. to apply to operate a medical marijuana dispensary on Sunrise Drive in the city’s eastern side. The city’s planning commission approved that operation on Aug. 2, and the council must approve permits for it to open.

Any marijuana-related businesses that receive operating permits will have to pay a percentage of their gross sales in fees to the city, the council decided. For the number of businesses recommended by city staff, that could mean from $160,000 at 2.5 percent of gross sales to $255,000 at 4 percent the first year, the report states.

Those numbers didn’t dazzle council members. Council members Mark Ross and Lara DeLaney acknowledged the high revenue returns many cities projected haven’t materialized. Tim Cromartie, a senior adviser on cannabis policy for consulting firm HdL Companies, said marijuana businesses are becoming so widespread that prices have dropped.

Cities in and near Contra Costa County have taken widely varying approaches to commercial cannabis. Danville and San Ramon have banned all marijuana-related businesses and delivery; Benicia allows up to two retail businesses; Vallejo has at least 10 dispensaries; Concord provides for manufacturing, distribution and testing operations, but not retail; Pittsburg allows up to nine cannabis-related operations and recently approved its first processing facility. The county, meanwhile, is considering a range of marijuana-related licenses.

Among the potential areas where marijuana businesses could set up shop are along portions of Pacheco Boulevard and Arnold Drive on the city’s eastern edge; in commercial zones on both sides of Highway 4; Alhambra Avenue just north of Highway 4; along portions of Howe Road south of the Shell refinery; the northern portions of the downtown area; and north of the railroad tracks past downtown. Specific locations are still up for discussion.

Police Chief Manjit Sappal, who has been helping craft the city’s prospective cannabis ordinance, said, “We don’t want to lose momentum; we want to get things done.”

That sounded good to Greg Dixon of Martinez, who said medical marijuana has helped his father fight throat cancer.

“This is medicine, and I think you will be helping people in our town,” Dixon said.

Martinez moves ahead with cannabis dispensary

MJ Shareholders — Mon, 06 Aug 2018 16:00:42 +0000

MARTINEZ — In a raucous meeting that saw everything from Cheech and Chong jokes to concerns about kids having easy access to pot, the city’s Planning Commission took the first step toward establishing a medical cannabis dispensary here.

The planning commission voted unanimously in favor of two measures that grant a conditional use permit at for Firefly Health Corporation, a marijuana dispensary, to operate at 4808 Sunrise Drive. The move still requires council approval.

The most vocal opponent of the commission’s decision was Maurice Jones-Drew, a former NFL running back who co-owns Power Endurance. Jones-Drew said he set up the gym to give back to the East Bay, and that he signed a five-year lease after he was assured the dispensary would not happen.

Power Endurance owners said more than 90 percent of their clients are underage, but city officials say they produced documents that definitively show around 68 percent of the people who go there are youths. The discrepancy makes a big difference, as a city ordinance forbids cannabis dispensaries to be within 600 feet of youth centers.

At its July 30 meeting, the commission seemed to reject the description of Power Endurance as a gym that “primarily” serves kids.

“I’ve been to Power Endurance, you guys have an amazing facility. … You don’t market yourselves as a youth center,” commissioner Sean Trambley said. He later added, “It’s a convenient definition.”

Jones-Drew said kids, including local high school sports teams, frequent the area year-round.

“This is a youth center,” Jones-Drew said, emphasizing the word “is.” He later added, “I don’t think anyone wants their kids around (marijuana), regardless of how we feel as adults about it.”

The dispensary’s owners took issue with Jones-Drew’s characterization of the gym and rebutted concerns that the dispensary would give kids easy access to marijuana.

“We believe we can co-exist there. We understand that there’s children there,” said Farid Harrison, one of the owners of Firefly who owns other dispensaries around the country. He said the gym had originally been billed as an athletic center but “conveniently” pivoted to a youth center in May, to oppose the dispensary.

“It doesn’t operate like a youth center, it doesn’t feel like a youth center. … It’s a gym,” Harrison said.

The commission’s vote goes against staff’s recommendation to reject the proposal, which cited the gym’s 90 percent statistic.

Before the matter came to a vote, dozens of members of the public spoke. Some voiced concerns about security and bringing a marijuana business to town, others said it was long overdue and that the dispensary was designed for people with medical needs, not recreational use.

Police Chief Manjit Sappal said there was a solid security plan in place for the proposed dispensary. He said he could not predict who the dispensary would attract, but did not get in the commission’s way.

“I don’t stand here today with any major reservation in terms of ‘We’re going down the wrong path, this is completely unacceptable, and we’re not going to be able to handle it,’ ” Sappal said. “It’s here, it’s coming, we’re going to have to deal with it one way or the other.”

Pittsburg approves Contra Costa County’s first cannabis manufacturing plant

MJ Shareholders — Tue, 17 Jul 2018 21:00:48 +0000

Pittsburg’s first plant for manufacturing and distributing medical and recreational cannabis could soon be operating in an industrial park at the former U.S. Army’s Camp Stoneman site.

The City Council voted 4-1 Monday to approve a commercial cannabis permit and an operating agreement with Canyon Laboratories, a subsidiary of BioZone Laboratories Inc. Since 1992 BioZone has operated a lab developing, manufacturing and marketing over-the-counter drugs, nutritional supplements and cosmetics on Garcia Avenue, near where the new cannabis facility would be built.

With the vote, Pittsburg becomes the first city in Contra Costa Couty to approve such a facility. The business would operate on Clark Avenue, where Camp Stoneman was based from 1942 to 1954. It would accept raw cannabis materials, including tetrahydrocannabinol (THC) and cannabidiol (CBD), to process, package and ship products to approved retailers.

City staff had recommended the council’s approval of the permit and operating agreement, which has met all the city’s requirements, according to Jill Hecht, Pittsburg’s director of community development.

“They have an excellent track record and they are one of our major employers here in town,” she said.

Several neighboring residents, however, said they were worried about safety at and near the industrial park. David Miller, owner of Hospital Systems, which is directly across the street from the proposed cannabis plant, said his business was broken into last week and he is concerned there will be more break-ins once word gets out about the new facility.

“Their security system is fine as far as I am concerned, but I am worried about safety in the area,” he said. “Will there be an increased police presence?”

Fellow business owner, Pamela Kan of Bishop-Wisecarver Corp., a commercial and industrial equipment supplier, noted that children walk through the industrial park to get to and from school.

“I would like to see that the deliveries are not happening during these times when the kids are going back and forth to school,” she said. “This is not an area that is heavily policed … I am worried about the safety of my employees with these deliveries coming in and out.”

Under the agreement, the new manufacturing plant would have to abide by a security plan, limit the amount of THC stored on site, open the facility’s records to inspection by police on request, and install security cameras and card readers, among other measures. Deliveries would be made between 5 a.m. and 5 p.m.; however, a Canyon spokesman told the council that his company would be willing to reconsider the time frame though only one delivery is expected daily.

Senior planner Jordan Davis said the city has been working closely with Canyon Laboratories to review its security plan, which the police will approve before it is finalized.

“Perhaps the most crucial aspect of the security plan is making sure that raw material (cannabis extract) is housed in a safe location,” he said, noting it would be stored in a secured, gated area and that the delivery vehicles would pull directly into the facility where only up to 22 pounds of THC could be stored.

Those raw cannabis products will include extracts in carriers such as oil, corn syrup and powder, Jordan said. The extracts would be used in the manufacturing of ointments, lotions, topical creams and some ingestible products, according to BioZone CEO Richard Fischler, who also said he did not anticipate any problems with odors.

In June, the City Council identified Stoneman Industrial Park and several other industrial areas where cannabis-related manufacturing, testing and non-retail distributing could be located, while also prohibiting on-site tasting, sampling or retail sales of cannabis products.

Earlier this year, the City Council voted 3-0 to amend city ordinances to limit the types of cannabis business to manufacturers, testing labs and non-retail distributors. Not allowed were medical or recreational dispensaries, collectives, cultivation, cooperatives or deliveries in the city.

In 2016, more than 68 percent of Pittsburg voters approved Measure J, which placed a maximum 10 percent sales tax on any future marijuana businesses. Based on Canyon Laboratories’ projections, the business could bring in more than $100,000 yearly for the city.

Councilman Jelani Killings, however, noted that the operating agreement with Canyon calls for only a 5 percent cannabis tax rate on the first $10 million in gross receipts. After that, there’s a sliding scale of 2.5 percent for earnings between $10,000,001 and $20,000,000, and 1.25 percent on those over $20,000,000.

“Why not stick to the 10 percent?” Killings said before casting the sole no vote. “It seemed it was a moot point to approve the 10 percent effective rate for cannabis tax, and then not have it not be relevant for every application that comes forward.”

Assistant City Manager Garrett Evans, however, noted that the city wanted to be competitive with the tax rate and that if Canyon hits the limit of the first tier in the tax structure, it would mean $500,000 for the city, the highest taxes of any Pittsburg business.

Canyon Laboratories and BioZone also estimate the combined companies could see substantial growth in their consumer and medical products by utilizing cannabis. The companies estimate the combined operations would add about 80 jobs in the next three years.

For Mayor Pete Longmire, though, approving the new cannabis plant means more than simply money for the city. It follows in line with the direction a majority of Pittsburg voters have given with their approval of Prop 64 legalizing marijuana and a subsequent city tax for it in 2016, he said.

“Times have changed and the attitudes of our community have changed,” Longmire said. “This venture for the city is something new — and it could be very scary to all of us and very scary to members of the community, but if we are going to proceed down this path, I am very happy that we have capable staff that will comb through the issues, comb through the processes, and I’m glad that we have a responsible applicant that has been in the community that is willing to work with pretty much whatever we want them to do.”

Antioch residents campaign to block marijuana-shop ordinance

MJ Shareholders — Mon, 16 Jul 2018 15:30:08 +0000

Three residents have launched a petition drive in an effort to overturn a new Antioch ordinance that later this month would allow marijuana retailers and related businesses to apply for permits to operate in the city.

The “Not in Antioch” referendum would repeal the Cannabis Business Overlay District ordinance that the council approved by a 3-2 vote in late June. Former Councilman Manny Soliz, Parks and Recreation Commission Chair Rodney McClelland and resident Diana Patton are backing the measure.

If the group collects the needed 5,664 verifiable signatures by July 31, it will effectively put the City Council’s cannabis zoning ordinance on hold, City Clerk Arne Simonsen said. The council then must decide whether to rescind the ordinance or place it on the ballot for voter approval.

Volunteer Traci Brown, right, speaks with Antioch resident Betty Beck in front of the Antioch post office about a petition she wants her to sign that would overturn an ordinance that will allow marijuana retailers and related businesses to start requesting permits to operate in Antioch. The “Not in Antioch” referendum has until July 31 to collect 5,200 signatures
to put the ordinance on hold. (Judith Prieve/Bay Area News Group)

“We’re wanting the council to overturn the ordinance, since there was no examination of the collateral damage caused by this hastily adopted ordinance,” said Soliz, who wrote the referendum. “When an ordinance is adopted under such rushed and incomplete analysis, and in direct opposition to public and professional testimony, you have to wonder what special interests are being addressed.”

Soliz said he’s mainly concerned that the city didn’t how the ordinance would affect public safety considerations or establish a good process for taxing and licensing the marijuana businesses. He said the city deserves a more comprehensive strategy.

“How will pot purchases be taxed? At what rate?,” he said. “There was a lot of concern that was raised about it, but none of the issues were really addressed.”

The cannabis businesses would have to pay the usual business license tax and Antioch’s 8.75 percent sales tax, but City Manager Ron Bernal could not predict how much revenue they would generate without knowing how many would operate. Any additional cannabis tax would require a citywide vote, he noted.

The ordinance, which was to take effect July 26, allows various types of cannabis-based businesses in two areas of town, including stores selling marijuana for recreational and medicinal purposes. The zoning modifications will pave the way for cannabis commerce in the industrial area along Wilbur Avenue on the city’s northern waterfront and in the Verne Roberts Circle business park near the western border. It prohibits cannabis businesses within 600 feet of a school, residential area or public park.

But backers of “Not in Antioch” say those two locations are problematic. The business park area includes the city’s top two tax revenue generators — Antioch Auto Center and Costco — and cannabis retailers could drive them out by inadvertently attracting crime, Soliz said.

The waterfront location is near the Antioch Youth Sports Complex, where hundreds of children play recreational baseball, softball and soccer, Soliz said. The industrial area along Wilbur Avenue also was previously identified as an economic zone from A Street to Highway 160, with access to heavy rail and a river port, which makes it attractive for assembly, light industry and manufacturing, but not if cannabis businesses move there, he said.

“I don’t know there is a good area where it (cannabis commerce) could go,” he added.

Ordinance supporters included Mayor Pro Tem Lamar Thorpe and council members Monica Wilson and Tony Tiscareno. Mayor Sean Wright and Councilwoman Lori Ogorchock voted against it. In voicing his approval on June 26, Tiscareno said most Antioch residents had voted for state Proposition 64 in 2016, which legalized recreational marijuana for adults. Thorpe noted that although he did not vote for Proposition 64, Antioch already has cannabis delivery services.

None of that matters to Antioch resident Traci Brown, who is volunteering to collect signature petitions. The Antioch business owner, who lives close to one of the newly zoned cannabis commerce areas, said she is concerned about the potential crime that marijuana retail, delivery and cultivation sites could draw.

“This is not what our city needs,” Brown said. “It’s not a good fit for our city, our youths.”

Brown called cannabis a “gateway drug” and said the cannabis industry is difficult to regulate and that the city lacks a clear plan to deal with potential problems. In addition, she questioned whether the business license fees and tax revenue would compensate for regulation and oversight costs.

“I don’t want to go to Costco and see a cannabis business right there,” she said.

Before any cannabis business can open, though, it must apply for a conditional use permit and get approval from the Planning Commission and City Council. Read more about the petition on the group’s #NOTINANTIOCH Facebook page.