Pubdate: Wed, 03 Feb 2016
Source: Sacramento Bee (CA)
Copyright: 2016 The Sacramento Bee
Author: Peter Hecht


City Council's Votes 8-0 to Proceed Cautiously

The Sacramento City Council moved cautiously Tuesday night toward 
allowing commercial marijuana cultivation, passing broad guidelines 
to delay any operating permits and requiring that nearby businesses 
and residents be given notice of potential grow rooms.

The council's 8-0 vote signals that the capital city, which now has 
30 medical marijuana dispensaries, is prepared to license and tax 
marijuana cultivation rooms that supply the product.

However, the city's cultivation ordinance would impose a 45-day 
moratorium on cannabis cultivation, with potential extensions meaning 
that no permits will be issued for any grow rooms for now.

During the moratorium, city staff is to work on drafting specific 
rules for issuing conditional-use permits that will set standards, 
such as security and other operating rules, for indoor marijuana 
cultivation of up to 22,000 square feet per site.

The intense debate Tuesday night reflected both planning challenges 
and potential tax revenue opportunities of state medical marijuana 
regulations signed by Gov. Jerry Brown in October. Those rules will 
create a governance system for marijuana businesses, with both state 
and local permits required for commercial operations.

But a small parade of business owners sounded alarm to council 
members that licensing marijuana grow rooms in the city could scare 
other businesses away and attract crime. They insisted that council 
members require conditional-use permits for the businesses, which 
would require notification of neighbors and a stricter review process.

"Our tenants have the right to know who their neighbors will be," 
said Bernardo Hubbard of Jackson Properties Inc., a commercial real 
estate firm with extensive properties in warehouse districts and 
other areas where cultivation potentially could occur. "And they 
should have the right to help shape this industry in our community."

The business interests were countered by medical marijuana advocates 
who said the facilities were needed to supply current medicinal users 
and that announcing the location of the businesses could endanger 
employees and the public.

"Our concern is that a conditional-use permit puts out exactly where 
we're at," said Lynette Davies, co-operator of the Canna Care 
dispensary in north Sacramento and supporter of allowing commercial 
cultivation facilities. "We want our neighborhoods to be safe. We 
want ourselves to be safe. And we are concerned as a medical provider 
that we will not have the supply for our patient base."

Councilman Eric Guerra said it was up to the marijuana business 
owners to guarantee security and public safety for cultivation centers.

"If the (marijuana cultivation) business doesn't make necessary 
safety improvements, then you have no business being in Sacramento," 
Guerra said.

City officials say Sacramento already has numerous unregulated 
marijuana cultivation facilities, many supplying medical marijuana 
dispensaries licensed by the city.

The capital city has long taken a tolerant attitude toward medical 
marijuana. Sacramento began licensing the marijuana stores in 2010 
and collected $2.86 million in local medical marijuana taxes in the 
2014-15 fiscal year.

But the city's effort to take the next step - and license actual 
commercial cultivation - split members of the City Council.

Councilman Allen Warren and Guerra complained that zoning rules 
drafted by city staff would place the overwhelming majority of 
marijuana growing facilities in their districts - Warren's District 2 
in north Sacramento and Guerra's District 6 in the city's southeastern sector.

Both district have a concentration of light industrial and warehouse 
spaces deemed suitable for marijuana as well as for planning rules to 
keep marijuana facilities more than 600 feet from parks or schools.

On Tuesday night, the council passed guidelines that will give the 
city time to decide whether to extend that distance requirement to 
1,000 feet - as well as set a cap on the number of cultivation rooms 
to be allowed in city limits.

Councilman Jay Schenirer, who has taken a lead in advocating 
licensing cultivation facilities, last week pushed the City Council's 
law and legislation committee to endorse a plan to ask voters to 
raise the city's business occupancy tax of 4 percent to 5 percent in 
the case of commercial marijuana growers. The increase would have to 
be approved by a two-thirds vote, and it's being considered for a 
June ballot initiative.

Schenirer said the cultivation taxes could amount to $5 million 
annually for the city. His proposal also calls for the tax revenue to 
be spent on youth programs. The council is to discuss the tax 
proposal next week.

Sacramento attorney Robert Kitay, who represents marijuana businesses 
in the city, say Sacramento dispensaries now sell 50 to 100 pounds of 
marijuana each a month. He estimated that taxing related cultivation 
could exceed Schenirer's estimate by millions of dollars.
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MAP posted-by: Jay Bergstrom