The San Juan Bautista City Council is expected to hold a special meeting in early April to discuss a proposed cannabis ordinance, as well as a potential pot sales tax to go before voters during the 2018 General Election in November.
“What I’m hearing from the ad hoc committee is to potentially pursue a tax on the November ballot and this ordinance would be approved contingent upon that tax passing in November,” Pinnacle Strategy President Victor Gomez said at the council’s March 20 meeting. Since last August, Gomez has consulted the city on cannabis policy on a nine-month, $9,000 contract.
The city has two options as to how to regulate cannabis locally: establish development agreements with individual businesses similar to how the City of Hollister regulates its budding industry, or place a cannabis tax measure on an election ballot like what San Benito County intends to do in June with Measure C.
Councilman Chris Martorana, a member of the ad hoc committee, explained his position.
“One of the concerns we had between the development agreement and the tax was the potential for litigation after the fact,” Martorana said. “We’re concerned because we’re basically saying you have to create a development agreement to do this. We may be creating an opportunity for a legal challenge.”
City Attorney Deborah Mall weighed in.
“I don’t think there’s anything that clearly is on record that says that that is illegal,” Mall said. “At the same time, I agree with you that you could present more room for a challenge because you’re forcing a fee upon somebody rather than having the voters go and approve a tax, which is more clear cut.”
Gomez said that while he wasn’t aware of any legal challenges to development agreements statewide, he could see it coming.
“Those members of the industry certainly aren’t fighting right now because they just want to operate,” Gomez said. “They’ll wait to fight later. I would totally agree that a vote of the people is a solid way to move forward, certainly the best option.”
The city has until the August 10 election filing deadline to decide on whether or not to put the fate of a cannabis tax in the hands of local voters.
In the meantime, council members will hold a special meeting Wednesday, April 4 at 2 p.m. to dig into the details of the draft cannabis ordinance, which could have a first reading as early as April 17.
The proposed ordinance will require that all future cannabis businesses operating in San Juan Bautista have a regulatory permit issued by the city. Applicants will be subject to in-depth background checks, including a fingerprint-based criminal history record check.
The council previously banned all cannabis sales, cultivation, and delivery within city limits on November 21, 2017. The ban is expected to be temporary while the ad hoc committee comprised of Councilman Martorana and Councilman Dan De Vries work on a permanent ordinance. The city previously established a medical cannabis dispensary ban in 2011.
In addition to the state requirement of 600-foot setbacks of cannabis businesses from youth facilities such as schools, the local ordinance also requires all cannabis businesses to have 150-foot setbacks from conforming residential uses. All cultivation must be done in indoor, fully enclosed facilities such as warehouses.
As currently drafted, the proposed ordinance limits the commercial zoning space near the Valero gas station on Monterey Street to testing laboratories.
“That’s the only area outside of the sensitive use area provided by the state, really the only area in commercial that would be allowed,” Gomez said. “Currently, the way the draft ordinance is written, you’d be allowing testing facilities in commercial zones, but that is all. That’s the only license type you’d be able to use in that zone according to how the ordinance is drafted.”
Any cultivation, manufacturing, distribution, or dispensary businesses would be required to operate in industrial zoned areas outside of the downtown.
However, the San Juan Bautista Planning Commission reviewed the draft cannabis ordinance in February and recommended council members consider expanding the ordinance to allow for more permit types to be included in commercial zoning.
Council members are expected to consider the permit expansion at the special cannabis meeting on April 4 at 2 p.m.
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