At a marathon meeting on June 3, the Hollister City Council held a first reading to adopt a new ordinance governing all cannabis businesses within the city, with a focus on recreational, adult-use. A second reading is expected on June 17.
The new ordinance does not contain the term “medical,” so that the two existing dispensaries will be able to sell recreational cannabis to anyone over the age of 21, and to conduct home deliveries within the city.
City Cannabis Affairs Manager Maria Mendez presented the agenda item and recommended it be read by title only and waive the full reading, but Mayor Ignacio Velazquez asked her to go through the changes for the audience.
Mendez said in addition to recreational-use sales, non-storefront deliveries would be allowed for already established, licensed businesses. She said staff added a definition of a nursery and changed the operating hours of dispensaries. They also removed the point system to qualify for a license, added an expiration date of 365 calendar days for future applications, removed the residency requirement for applicants, and allowed employees of companies already permitted to “distribution administratively because they’re just an extension of the business.”
City Manager Bill Avera interjected that the ordinance would limit nurseries to not exceed 40% of the total square footage of a facility. In an attempt to classify what a nursery plant is, Mendez said it was difficult to define the physical characteristics of a plant to determine if it can be considered nursery stock, and at what point it must be moved to grow rooms to eventually be harvested.
The concern over what classifies as nursery stock is due to the lower cost-per-square foot for nurseries. Avera said it didn’t matter when plants actually matured because of the number of cameras in the nurseries that the police department monitors.
“We won’t allow a nursery area to come to flower without having a conversation with them,” Avera said.
Velazquez was concerned about 40% being too large an area allotted to nurseries. He has expressed interest in the past that square footage for nurseries be limited to 25%, which he said made more sense. Avera said 40% was an arbitrary number and the council could reduce it if it wanted to.
Mendez told BenitoLink that the percentage of space for nurseries will be lowered to 25%, as requested by the mayor.
Velazquez was also concerned that distribution would not be limited to the dispensaries under the new ordinance. Avera explained that if a company was licensed to manufacture cannabis products in the city, it could also deliver the product if it obtained a license to do so.
Velazquez hypothesized what would happen if there were suddenly 50 cultivators or manufacturers, wondering if they should all be allowed to deliver. Mendez explained that only those companies already in the city with good standing of one year with no citations would be permitted to deliver within city limits, which the council would have to approve. She said if a company located in another county wanted to deliver product to Hollister they too would have to apply for a license.
Velazquez questioned whether the state would allow the city to restrict deliveries. Mendez told him there is presently a lawsuit against the state over allowing home deliveries, but attorneys who represent Santa Cruz County told her it’s most likely that cities, such as Hollister, with ordinances already in place, will be allowed to continue to control who can deliver into their cities.
While Velazquez remained concerned that there would somehow be a huge influx of deliveries, Avera tried to assure him it isn’t so easy to get a license to deliver.
“They would have to get a delivery license from the state, which I understand is difficult, and then they would have to go through a license distributor,” Avera said. “If somebody here wanted to make a product, they would have to sell it to a distributor. It’s about taxes. It can’t go directly from manufacturing to the doorstep.”
Velazquez seemed satisfied and the council unanimously approved the amended ordinance.
The ordinance will be brought back to the council on June 17 for a second reading and adoption. If approved, the ordinance will go into effect July 3.
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