Government / Politics

Cannabis economic impact discussed at city business meeting

During a quarterly meeting with businesses, the Hollister city manager revealed the economics of the cannabis industry for the area, noting a "cannabis campus" is planned

Hollister city staff hosted a quarterly “coffee talk” meeting Thursday, Aug. 17, to discuss opportunities with the business community. The main topic of interest, though, turned out to be cannabis.

Maria Mendez, associate planner in the Planning Department, led off the meeting with a recap of what took place at the Aug. 14 city council meeting, at which 11 licenses were granted for cannabis manufacturing, distribution and testing facilities within city limits. There were also two dispensary licenses up for consideration, but only one was granted — to Purple Cross Rx, which still has some administrative hurdles to go through before it can actually begin operations.

When asked for some specific benefits to the city from the influx of cannabis-related industries, City Manager Bill Avera  said that beyond the 11 permits that were approved, there are 80 more applications outstanding. He explained that property sizes are important because people are not only trying to get licenses from the city, but state licenses, as well, which dictate the sizes of lots.

“You’re going to see large-scale developments on those sites,” he said, and then shared with the group something that has been in the works for some time, but was not public knowledge. “It’s about 14 acres across from Dassel’s that are divided into four parcels, and each one of those will have a facility on it of about 70,000 square feet that are predominantly greenhouses that are actually physical buildings (not hoop houses).”

Avera said each building may have multiple licenses or permits because of state law that only allows buildings of 20,000 square feet. As the state changes its rules, he explained, the city is playing catch-up to adopt new rules.

Another massive cannabis-related project that is being talked about, but no official application has been submitted yet, involves the 220 acres on San Felipe Road near the airport where Swank Farms had operated for 40 years and was purchased by John Wynn, the owner of Ridgemark Golf & Country Club.

“There’s going to be a very large facility there,” Avera said. “We approved a site architectural of a 100,000-square-foot (smart-) glass manufacturing business two or three months ago. The next 100 acres (it’s closer to 200 acres) will be a huge cannabis campus that won’t be open to the public.”

Bryan Swanson, director of the Planning Department, explained to BenitoLink that a cannabis campus will be comprised of several large buildings where space will be leased to other companies that will obtain their cannabis permits through Wynn’s company, who, in turn, obtains them from the city. He also said Wynn has mentioned to the city, but had not as of yet, submitted plans, that he may also build a hotel on the site.

Richard Ferreira asked Avera what the anticipated economic impact would be for the city and county. Avera told the audience there will be two revenue components. The first is a 5 percent tax on gross sales, which he said is an unknown until there are actual sales taking place. Second, is a fee of $7 per square foot of cultivation area. He gave the example of a 20,000-square-foot cultivation area that would pay $140,000 annually to the city. He said the total space being proposed by all the applicants would have generated an estimated $1.26 million annually. That number, he explained, would be somewhat less because only 11 of the applicants received approval.

“It’s only going to get bigger from this point forward,” Avera said, "depending on the consistency of crop yields over time."

Ferreira said the public should be better informed about the potential revenues for the city. Avera said he preferred to be cautious about revealing details before projects are actually producing revenues.

“We’ve learned it’s hard to get excited until we actually see them come to fruition,” Avera said. “We’ve been careful about talking about the money. I don’t want cannabis to be a revenue-generating problem-solver. There are a lot of problems that come with it. It’s a new industry for us and we’re still working through it just like everybody else. I think the community should be more concerned about us doing it correctly and not whether we’re going to get rich off of it.”

Raymond Creech, with the California Economic Development Department, asked about the city’s policy  on existing cannabis operations. Avera said he does not believe there are any illegal grows within city limits, but hinted that when he stands on the hill where the West Hills Water Treatment facility is located looking out over the city, he has seen possible growing operations, which he said probably don't belong there.

Avera was also asked if there were any limitations on the number of permits. He said the ordinance only allows two permits to be handed out for dispensaries; otherwise, there are no limits on other types of facilities. He was also quizzed on city resources that would have to be implemented to accommodate the cannabis industry. He said the city has been working during the past five months on infrastructure requirements, mostly involving water. The second consideration for the city will be staffing. He said he plans to bring a plan to the city council on Sept. 5.

“It’s going to include a cannabis team that will include somebody from almost every department,” he said, “plus an addition person who would act as a forensic auditor in the Finance Department, and maybe a few additional police officers and code enforcement.”

Avera said he wants the council to work on a policy to determine how the revenues would be divided. He said the community should benefit, as well as parks and roads. He said money also needs to go into reserves, just in case a few years from now some of the companies fall to the wayside. Councilman Jim Gillio, who was in the audience, asked Avera to explain the percentage breakdown of revenues. Avera said his idea is a 60/30/10 split. Ten percent going into reserves; 30 percent for staffing; and 60 percent for roads and parks and educational programs.

Other Topics

Local businesswoman Marci Huston took the opportunity to let Swanson and other city officials know how dissatisfied she was over what she described as a lack of customer service skills. Huston has a contentious history with the city and county over her former Garden Mart business on San Benito Street because of what she deemed the homeless population's constant harassment of her and her employees. Ultimately, she felt forced to shutter her business there. Now, however, she is planning to open a new business, The Flower Shoppe, on Seventh Street. Once again, she said she feels the city is hindering her more than helping.

While Huston said the Planning Department was helpful, she had serious issues with the Building Department. She went over a long litany of complaints of what, in her view, was substandard service, including the city’s code requiring her to install a handicapped parking space on her property, which includes a historical home. Ultimately, she said she was able to work through all the issues, but wondered why finding the answers should have been up to her rather than the staff being more diligent in providing them by taking a few minutes at the beginning of her project to explain what was required of her.

“I can assure you that when it comes time for me to have my inspection, I’m going to have the inspector on speed dial,” she said. “I’m not going to wait and wait for somebody to think that I’m important.”

Supervisor Mark Medina spoke up on behalf of Huston. He said government should be all about customer service and efficiency. He told her that the government needs to hear complaints so it does a better job. Hollister City Councilman Jim Gillio commented that setbacks are a reality with businesses and government. He told Huston he was sorry to hear about her problems in working with the city.

Juli Vieira, CEO/president of the San Benito County Chamber of Commerce, related that she had met with an association of chamber executives in Sacramento. She said she told them about Hollister Police Chief David Westrick’s Facebook page and how the CEOs had said they wished they had a police chief who was as engaged with their communities. She recommended the city should have an employee who concentrates on public relations to work on a city Facebook page.

“Put your successes out there,” she suggested. “PR can be good or bad. Right now, we have a lot of it on Facebook negative, depending on what side of the 400 Block you’re on. People don’t know what’s going on behind the scenes.”

Kathina Szeto, owner of San Benito Bene and founder of the San Benito County Olive Festival, took a few moments to remind everyone that this year’s festival would be taking place Oct. 14, at Brigantino Park. One new feature will be a walking geological tour of the park conducted by Jim Ostdick, who walked across the United States in 2016.

“It’s a foodies and family opportunity and there’s a lot of agricultural-themed activities,” Szeto said. “We’ll be showcasing our amazing wineries and craft beer breweries.”

John Chadwell

John Chadwell is a freelance photojournalist with additional experience as a copywriter, ghostwriter, scriptwriter, and novelist. He is a former U.S. Navy Combat Photojournalist and is an award-winning writer, having worked for magazine, newspapers, radio and television. He has a BA in Journalism and Mass Communications from Chapman University and graduate studies at USC Cinema School. John worked as a scriptwriting consultant, and his own script, "God's Club," was produced and released in 2016. He has also written eight novels, ranging from science fiction to true crime, which are sold on Amazon. To contact John Chadwell, send an email to: [email protected]