Ron Strider
Well-Known Member
It's really hard to write about California City's headlong plunge into the marijuana business without being a little snickery. Pot is a weird drug.
I don't mean just because it makes people act goofy.
I'm talking more about its public relations.
Most people have had at least a passing experience with pot at the party level and more and more of us may know someone who relies on it to ease the pain of chemotherapy or other health problems.
Near constant references to it in movies and other media have made marijuana both familiar and taboo.
Either way, it's odd to think of pot as an "investment opportunity."
But that's what it's becoming for a lot of cities that have few other revenue options.
Such as Cal City, which passed an ordinance last fall allowing it to permit industrial-sized marijuana cultivation, manufacturing, distribution and transportation.
Earlier this year, it issued 30 permits that will result in 400,000 square feet of cultivation, plus manufacturing, etc.
It will all be placed in several "business parks" on land zoned for industrial use.
The level of interest has been so high (no giggling, please), the city is in the process of opening applications for more than 200 additional permits.
City Manager Tom Weil is probably the last person who thought this is where Cal City would be when he was approached last February by a doctors' group interested in marijuana cultivation in the quiet bedroom community.
"I said, 'Guys, this is Kern County; there's no way,'" Weil recalled.
But the growers weren't dissuaded and came back with more information, particularly "how big the numbers were."
By numbers, Weil means dollars.
And, yes, the anticipated dollars are huge.
So huge, the city rethought its initial dismissal.
After a survey of the citizens showed 75 percent were in favor, the city hired a consultant to help construct an ordinance laying out the parameters of its permits and opened the application process in December.
"This could be a true game-changer for us," Weil said.
The hope is the marijuana industry will bring in enough tax money that Cal City can do away with a special parcel tax it has relied on for decades to fund basic services.
Cal City is a bedroom community without a local industry to bolster its tax rolls. So, on top of regular property taxes, every Cal City parcel must pay a $150 special tax; otherwise, the sprawling desert city wouldn't have enough money to cover things like public safety.
That parcel tax brings in about $7.5 million a year.
Once they issued the initial 30 permits, though, city officials realized even with a combination of annual permit fees, sales taxes on gross receipts and taxes per square foot, it wouldn't hit that $7.5 million.
Which is why Cal City is issuing more permits.
It isn't alone.
Though no other Kern County cities have gone this route, plenty of other desert cities are opening their doors to the marijuana industry.
Adelanto, Desert Hot Springs, Needles and Indian Wells, to name a few.
The potential for a pot glut hasn't been lost on Cal City.
But even with a recent drop from $2,400 a pound to $1,400 a pound, Weil said Cal City expects pot to maintain its profitability.
"And growers are willing to pay taxes, as long as it stays around the same as alcohol, or 28 percent," he said. "Because they know it brings them into the community, part of the everyday business world."
Maybe so, but taxes and permits still won't open a bank's doors to drug money, said John Wooner, city manager for McFarland, which has also been approached by the marijuana industry.
"The problem is, even as the state is moving to make it more legal, the fact is the federal government is against it," he said. "You can't deposit money into a federally insured bank that's drug money.
"I'm not sure how Cal City is going to handle that."
Weil agreed that's an issue, but remained optimistic that where there's money, the state Board of Equalization will find a way to take it in.
He characterized it as a "good problem to have."
Wooner, though, was also wary of other possible issues, including liability.
"Say I have someone who wrecks a piece of city equipment, or hurts someone on the job," he said. "If they test positive for marijuana, they could say they smoked it the night before when they smoked it at lunchtime and there's no way of knowing if that's true.
"It just seems to be getting ahead of our ability to control it."
Kern County Sheriff Donny Youngblood has said much the same thing and has gone on record many times opposing any form of the marijuana trade from medical dispensaries to large-scale cultivation.
Even so, the Kern County Planning Department is in the midst of writing an environmental impact report, or EIR – with a separate fiscal report estimating the costs/benefits – on the possibility of allowing large-scale marijuana operations in the unincorporated parts of Kern.
That document should be out in the next few months, according to Planning Director Lorelei Oviatt.
"State estimates are (the marijuana industry) will generate a billion dollar revenue stream," Oviatt said. "If we don't regulate it, we are opening the possibility of companies obtaining state licenses and none of that revenue would come to the county."
She said the EIR is looking at capping cultivation at 2 million square feet indoors and 150 acres outdoors. It would also include 600,000 square feet available for processing and 40 retail outlets, with no more than two per unincorporated community.
The state gave cities authority to completely ban or regulate the trade as they see fit. (Adults are allowed to grow up to six plants indoors for personal consumption.)
And if a grower is operating inside a city, it must adhere to that municipality's rules or the state won't issue a license.
Though this is a complex issue, things are moving at Gold Rush speed because there will be a set number of state licenses, and local jurisdictions have to decide whether they are "in or out" by January 2018, Oviatt said.
There's no question where Cal City stands.
The city has 3,400 acres of industrial-zoned lands and residents have been calling to get zone changes for even more, Weil said.
"We've already contacted Southern California Edison to make sure we have enough power, and they're rerouting circuits to double our available megawatts."
Everything will be brand-new, state-of-the-art – buildings, fencing, security, everything, he said.
"And it's all being paid for by the developers (growers)."
Whatever your feelings are about marijuana, it seems we are quickly entering a whole new world
News Moderator: Ron Strider 420 MAGAZINE ®
Full Article: LOIS HENRY: California City has high hopes for marijuana industry — and its tax money | Lois Henry | bakersfield.com
Author: Lois Henry
Contact: Contact Us | Site | bakersfield.com
Photo Credit: US Fish and Wildlife Service
Website: bakersfield.com | Kern County news, events, shopping & search
I don't mean just because it makes people act goofy.
I'm talking more about its public relations.
Most people have had at least a passing experience with pot at the party level and more and more of us may know someone who relies on it to ease the pain of chemotherapy or other health problems.
Near constant references to it in movies and other media have made marijuana both familiar and taboo.
Either way, it's odd to think of pot as an "investment opportunity."
But that's what it's becoming for a lot of cities that have few other revenue options.
Such as Cal City, which passed an ordinance last fall allowing it to permit industrial-sized marijuana cultivation, manufacturing, distribution and transportation.
Earlier this year, it issued 30 permits that will result in 400,000 square feet of cultivation, plus manufacturing, etc.
It will all be placed in several "business parks" on land zoned for industrial use.
The level of interest has been so high (no giggling, please), the city is in the process of opening applications for more than 200 additional permits.
City Manager Tom Weil is probably the last person who thought this is where Cal City would be when he was approached last February by a doctors' group interested in marijuana cultivation in the quiet bedroom community.
"I said, 'Guys, this is Kern County; there's no way,'" Weil recalled.
But the growers weren't dissuaded and came back with more information, particularly "how big the numbers were."
By numbers, Weil means dollars.
And, yes, the anticipated dollars are huge.
So huge, the city rethought its initial dismissal.
After a survey of the citizens showed 75 percent were in favor, the city hired a consultant to help construct an ordinance laying out the parameters of its permits and opened the application process in December.
"This could be a true game-changer for us," Weil said.
The hope is the marijuana industry will bring in enough tax money that Cal City can do away with a special parcel tax it has relied on for decades to fund basic services.
Cal City is a bedroom community without a local industry to bolster its tax rolls. So, on top of regular property taxes, every Cal City parcel must pay a $150 special tax; otherwise, the sprawling desert city wouldn't have enough money to cover things like public safety.
That parcel tax brings in about $7.5 million a year.
Once they issued the initial 30 permits, though, city officials realized even with a combination of annual permit fees, sales taxes on gross receipts and taxes per square foot, it wouldn't hit that $7.5 million.
Which is why Cal City is issuing more permits.
It isn't alone.
Though no other Kern County cities have gone this route, plenty of other desert cities are opening their doors to the marijuana industry.
Adelanto, Desert Hot Springs, Needles and Indian Wells, to name a few.
The potential for a pot glut hasn't been lost on Cal City.
But even with a recent drop from $2,400 a pound to $1,400 a pound, Weil said Cal City expects pot to maintain its profitability.
"And growers are willing to pay taxes, as long as it stays around the same as alcohol, or 28 percent," he said. "Because they know it brings them into the community, part of the everyday business world."
Maybe so, but taxes and permits still won't open a bank's doors to drug money, said John Wooner, city manager for McFarland, which has also been approached by the marijuana industry.
"The problem is, even as the state is moving to make it more legal, the fact is the federal government is against it," he said. "You can't deposit money into a federally insured bank that's drug money.
"I'm not sure how Cal City is going to handle that."
Weil agreed that's an issue, but remained optimistic that where there's money, the state Board of Equalization will find a way to take it in.
He characterized it as a "good problem to have."
Wooner, though, was also wary of other possible issues, including liability.
"Say I have someone who wrecks a piece of city equipment, or hurts someone on the job," he said. "If they test positive for marijuana, they could say they smoked it the night before when they smoked it at lunchtime and there's no way of knowing if that's true.
"It just seems to be getting ahead of our ability to control it."
Kern County Sheriff Donny Youngblood has said much the same thing and has gone on record many times opposing any form of the marijuana trade from medical dispensaries to large-scale cultivation.
Even so, the Kern County Planning Department is in the midst of writing an environmental impact report, or EIR – with a separate fiscal report estimating the costs/benefits – on the possibility of allowing large-scale marijuana operations in the unincorporated parts of Kern.
That document should be out in the next few months, according to Planning Director Lorelei Oviatt.
"State estimates are (the marijuana industry) will generate a billion dollar revenue stream," Oviatt said. "If we don't regulate it, we are opening the possibility of companies obtaining state licenses and none of that revenue would come to the county."
She said the EIR is looking at capping cultivation at 2 million square feet indoors and 150 acres outdoors. It would also include 600,000 square feet available for processing and 40 retail outlets, with no more than two per unincorporated community.
The state gave cities authority to completely ban or regulate the trade as they see fit. (Adults are allowed to grow up to six plants indoors for personal consumption.)
And if a grower is operating inside a city, it must adhere to that municipality's rules or the state won't issue a license.
Though this is a complex issue, things are moving at Gold Rush speed because there will be a set number of state licenses, and local jurisdictions have to decide whether they are "in or out" by January 2018, Oviatt said.
There's no question where Cal City stands.
The city has 3,400 acres of industrial-zoned lands and residents have been calling to get zone changes for even more, Weil said.
"We've already contacted Southern California Edison to make sure we have enough power, and they're rerouting circuits to double our available megawatts."
Everything will be brand-new, state-of-the-art – buildings, fencing, security, everything, he said.
"And it's all being paid for by the developers (growers)."
Whatever your feelings are about marijuana, it seems we are quickly entering a whole new world
News Moderator: Ron Strider 420 MAGAZINE ®
Full Article: LOIS HENRY: California City has high hopes for marijuana industry — and its tax money | Lois Henry | bakersfield.com
Author: Lois Henry
Contact: Contact Us | Site | bakersfield.com
Photo Credit: US Fish and Wildlife Service
Website: bakersfield.com | Kern County news, events, shopping & search