Farm-to-joint: Sacramento sparks up medical marijuana cultivation debate
City council proposes increased taxes amid statewide changes for cannabis
Last week, two days after Sacramento City Council voted to allow cultivation of medical marijuana, Brad Wasson’s phone wouldn’t stop ringing. The revenue manager for the city laid out the potential benefits of regulating cannabis cultivation before council on February 2. And while it’s going to be awhile before people can plant large-scale medical-marijuana grows legally in Sacramento, maybe a few years, that hasn’t stopped Wasson’s phone from blowing up.
“We’re probably getting 100 calls a day of people wanting to start cultivating,” Wasson told SN&R in a phone interview on February 4. “The public is ready to go, but we’re not ready for them.”
Such is life in California these days, where sweeping medical-marijuana regulations that the state passed last October have forced cities to act fast.
According to multiple media outlets, more than 160 California cities responded to the Medical Marijuana Regulation and Safety Act by banning cultivation. Sacramento went a different direction, however: It recognized that medical marijuana has been legal in California since 1996, and so decided to permit grows.
Sacramento also recognized that there’s money to be made regulating pot cultivation.
“I think it’s just the reality of the situation,” said Councilman Jay Schenirer, who made the motion that city council approved 8-0 on February 2 to approve medical-marijuana cultivation in certain parts of town. There’s currently a 45-day moratorium on growing. The council also voted 5-1 to allow dispensaries to move locations and change board members.
Sacramento has had a 4 percent tax on all marijuana-related business in effect since June 2011, and the city took in just shy of $3 million on this in 2015. The Washington D.C.-based Marijuana Policy Project estimates statewide tax revenues from dispensaries at about $50 million.
An analyst for MPP, Chris Lindsey, told SN&R that regulating cultivation offers benefits, too. “I think that there is an advantage to communities that are willing to license and allow cultivation to take place,” he explained. “I think that it’s a respectable market in terms of its scope. There’s been a lot of focus and attention on the sort of retail aspect of it and not nearly as much on licensing cultivation. That is an area where those communities that are willing to go there can find themselves in a really good spot.”
The agenda for the February 9 city council meeting also included a measure drafted by Schenirer for the June ballot to tax cultivation at 5 percent. This could generate $5 million annually, with the money going to local youth programs. Schenirer told SN&R that Sacramento currently spends less than 1 percent of its general fund on youth.
(Because of publication deadlines, SN&R couldn’t attend the February 9 city council meeting ahead of filing this story. Discussions around regulating marijuana will likely continue in Sacramento for months, if not years to come.)
“I think at this point, legalized marijuana is something that appears to be very likely,” Councilman Steve Hansen told SN&R. “I think the city should embrace that and regulate it appropriately, but not try to stop something. One of the ways we get there is really by ensuring that we’ve got fair regulations, but reasonable ones, and that we continue to have a process that produces good results.”
The council acted quickly because Assembly Bill 243, one of the three marijuana-related laws the state passed in October, had set a March 1 deadline for cities to establish land-use guidelines for cultivation, or cede control to the state’s Department of Food and Agriculture.
But Gov. Jerry Brown signed a clean-up bill last week, on February 4, that struck down the March 1 deadline. This was after Sacramento’s vote, however, so legalized cultivation likely would have proceeded in Sacramento.
“This is my least favorite way to do policy,” Councilwoman Angelique Ashby said during the February 2 meeting. “It feels a little held hostage by the state. We have to act fast. We don’t have the opportunity for outreach on the front end.”
The council approved medical cultivation with a 45-day moratorium, the maximum allowed under state law. But Sacramento can extend the moratorium up to 22 months and 15 days—and will almost certainly do so.
Before the ordinance can be finalized, Wasson noted, the city needs more time to build consensus. He anticipates holding a public stakeholder meeting sometime in the next couple of weeks. “Normally we would’ve done that ahead of time, but we were trying to meet the state deadline,” Wasson said.
The ordinance also has to go again to Sacramento’s city attorney’s office, the law and legislation committee, and city council. Both council and the law and legislation committee need three weeks of lead time and generally don’t conduct reviews concurrently.
“When you look at 45 days, it’d really be impossible to go through our legislative process and get it back in front of the council,” Wasson explained.
Much work remains to finalize the ordinance.
As it stands, cultivation would be restricted to buildings no larger than 22,000 square feet in industrial, commercial and agricultural areas.
The council rejected staff’s recommendation that grow buildings be at least 600 feet from parks or schools. They’re considering upping the restriction to 1,000 feet, which leaves qualifying areas for cultivation mostly in the city’s outskirts, primarily in southeast Sacramento. The council members in those districts aren’t happy about this, by the way.
The city will require conditional-use permits for cultivators, similar to bars. The council debated if these permits should be issued by a zoning administrator or the planning commission, and ultimately left the venue to be decided while they continue to work on the ordinance.
The city would also like to have a public registry for cultivators. But multiple cannabis-community members spoke out against the additional regulations.
“I can’t even explain how many hoops we’ve jumped through to keep our permits with the city for our dispensaries,” Kimberly Cargile, CEO of A Therapeutic Alternative, told city council the February 2 meeting.
Dispensary reps say that publicizing addresses where cultivation occurs could make them targets for the black market, which they say has been hurt badly by the recent regulations.
“Let me ask you a question about that,” Councilman Larry Carr said to Richard Miller of Safe Access Sacramento and the California Growers’ Association. “Is it your view that the people who are dealing in illegal marijuana will not know where these grow houses are unless there is a conditional use permit? You don’t think they will know anyway?”
“They don’t know,” Miller replied. “You don’t know now. You haven’t had any nuisance complaints on indoor grows.”
Others supported conditional-use permits, such as Tracy Schaal, executive director of the Power Inn Alliance. She told council that by requiring a conditional-use permit for every one of these facilities, the city can control the rollout of pot growing.
“We want to be able to have them be equitable, transparent and prudent,” she said.
In general, marijuana is coming out of the shadows. On February 4, the governor hired the first chief for the state’s new medical marijuana regulatory board, Lori Ajax of the California Department of Alcoholic Beverage Control.
Marijuana is also being more and more decriminalized. Possession of up to an ounce for personal use in California is now just an infraction rather than a misdemeanor or felony. The Obama administration has also reduced marijuana enforcement on the federal level, something that’s unlikely to change with the next president.
“For the most part, we’re not seeing this looming threat on the horizon that somehow there will be a game-changing election,” Lindsey said.
“Because consider that during that same election, we’re going to have quite a few states considering full legalization initiatives, and medical marijuana has never been more popular in terms of voter support. It regularly polls by a huge margin in favor.”
In Sacramento recently, that poll was 8-0.