Pubdate: Wed, 10 Aug 2016
Source: Sacramento Bee (CA)
Copyright: 2016 The Sacramento Bee
Author: Peter Hecht


The capital city is readying to become a cannabis production center 
under a plan advanced Tuesday by a City Council committee.

The council's law and legislation committee moved forward with a 
conceptual plan to allow indoor cultivation of marijuana in 
commercial, industrial and agricultural zones in Sacramento  with a 
possibility of granting conditional use permits for limited 
facilities operating just outside of residential areas.

The city's push toward marijuana industrialization is expected to 
culminate in a plan to be voted on by the City Council in November, 
with facilities to be given operating licenses next year.

The effort, which would generate new tax revenue, is accelerating 
after city officials recently announced that Sacramento's 30 medical 
marijuana dispensaries produced a record $4 million in city tax 
revenue during the 2015-16 fiscal year. The revenue, from a 4 percent 
local medical marijuana tax, has served to underscore the potential 
economic clout of cannabis businesses in Sacramento, a city long 
politically supportive of medical marijuana.

The city is surrounded by local governments, including Sacramento 
County, that ban marijuana businesses, and its dispensary sales have 
taken off as numerous pot stores reopened since federal forfeiture 
notices forced many to close in 2011 and 2012.

Now, with federal authorities backing off on enforcement in states 
permitting marijuana use and California voters to consider legalizing 
pot as a recreational drug in November, Sacramento is weighing 
decisions on how far it wants to go into the legal pot business. And 
Tuesday's committee session revealed intense concerns among community 
groups over how close marijuana businesses might be to neighborhoods.

The law and legislation panel moved forward recommendations by the 
city's planning commission to allow pot-cultivation sites within 300 
feet of neighborhoods with strict rules and a conditional use-permit 
program giving residents input on such operations. Previously, City 
Council members Allen Warren and Eric Guerra complained that 
industrial areas in their northern- and eastern-Sacramento districts, 
respectively, would receive the bulk of the grow rooms. The planning 
commission recommended allowing the facilities closer to 
neighborhoods to more evenly space them throughout the city.

But that notion didn't sit well with Kathy Anuszczykof the Hagginwood 
Community Association in North Sacramento. She urged the city to keep 
such facilities far from homes and also called for a cap on the 
number of cultivation sites in the city.

"We're the neighborhoods. We're going to live with this," Anuszcyzk 
told the committee. "City Hall is not going to be next to this. My 
neighborhood will be."

Brad Wasson, Sacramento's revenue manager, said the city anticipates 
another $2 million in revenue from a 4 percent business tax from 
commercial marijuana cultivation facilities expected to be licensed 
in Sacramento by next year. But the revenue figures could be bigger, 
depending on how many growing facilities  and what scale  the city 
ultimately approves.

Wasson said the city is looking to persuade traditionally reclusive 
marijuana producers to operate transparent, licensed cultivation 
businesses. The city is seeking detailed security plans, including 
video surveillance, criminal background checks on employees, 
odor-control systems, efficient energy- and water-use requirements, 
and strict rules on shipping marijuana and handling cash.

"I would like to try to figure out how much medical marijuana 
Sacramento people need, and we will be able to support that with grow 
sites," Wasson said. "It's hard to get real information about what we 
need. They're still very nervous about their grow sites. For years, 
they've been busted for growing marijuana. There is a little trust 
issue you've got to get to."

Wasson said 180 individuals already cultivating within city limits 
have registered with officials in hopes of getting operating permits. 
He said many are in residential zones, where no commercial growing is 
allowed, and would have to move under the proposed rules. A total of 
600 potential applicants have contacted the city about commercial 
cultivation, he said.

City staff members, who said they are seeking to allow at least 
enough cultivation to supply local dispensaries, haven't recommended 
a cap on total marijuana production but have floated the idea as an 
option for the City Council. Under plans discussed by the law and 
legislation committee, the city could approve commercial growing 
permits for up to 22,000 square feet of indoor cultivation space to 
applicants who meet the city's criteria.

"I think we can have a model ordinance, be a model city on 
cultivation, manufacturing and dispensing marijuana in a manner that 
offers a balance between the industry and community needs and creates 
a revenue stream for the city at the same time," said City Council 
member Jay Schenirer. "The fact is it's legal and it's here, so let's 
do it right."

Schenirer championed Measure Y, a June ballot initiative that would 
have imposed a special 5 percent city tax on marijuana cultivation 
revenue and directed revenue to a special fund dedicated to programs 
and services for children. It fell just short of the required 
two-thirds vote for passage.

Schenirer said he will push a less-formal proposal before the City 
Council later this year to direct standard business taxes from 
cultivation  which don't require voter approval  for youth programs.

Wasson said the city expects to follow the cultivation ordinance with 
other regulations for marijuana delivery services - with drivers 
working only for local dispensaries - and cannabis product 
manufacturing, including permits for producers of marijuana foods and 

Lanette Davies, whose Canna Care dispensary in North Sacramento is 
seeking a permit for a cultivation facility, said she expects 
considerable debate on the city's plans before a final proposal 
reaches the council.

"I think you'll see a lot of changes  I'm not sure what," she said. 
"I'm pleased with it so far. Sacramento is taking a leadership 
position in showing the rest of California how well we can do things."
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MAP posted-by: Jay Bergstrom