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City moves forward on canna-business, sales tax

City moves forward on canna-business, sales tax

By Paul Myers


woodlake – Cities around the Valley have been debating for months what to do on pot and sales tax revenue. For Woodlake, their debate is over and now they’ll leave two things up to the voters, a sales tax increase of 1% and a tax on marijuana sales starting Jan. 1, 2018.

Public hearings have spanned four regularly scheduled meetings starting June 12 and ending at last week’s meeting July 24. Most meetings have seemed to let the 1% sales tax measure go under the radar as staff has impressed on residents the need for additional revenue to close general fund deficits. As well, City staff has been transparent with residents saying that the City will spend additional sales tax revenue on parks and recreation, public safety, facilities, streets and roads and lighting and landscaping. And for several meetings they have impressed on residents the need to sure up public safety in terms of bringing on more officers and establishing funding for fleet repairs. But since the citizens advisory committee (CAC) was appointed and have been meeting in March, it was not entirely clear what percentage the Council would ask citizens to vote on until their July 24 meeting when the Council voted unanimously to place the 1% increase on the Nov. 7 ballot.

And while residents at the July 24 meeting appeared less concerned with a sales tax increase, it was apparent that they were very concerned over marijuana cultivation and sales in the city.

“At first I was on the fence, but the more I thought about it, that’s where my drug use started…and I was one of the lucky ones to get out of it…and I go to the store and see my friends who haven’t,” said Juan Lopez who spoke to the council last week. “What are we telling our kids…what kind of example will you be when we tell our kids that you voted for drugs?”

Another member in the community said that she feels fear over allowing legal marijuana in the city limits.

“I’m afraid of what may come,” said Mariana Rodriguez.

Frances Garcia spoke to the council in regards to the resources cannabis businesses would use.

“We are already in a drought and we are already having restrictions on water…I don’t think we can have that right now,” said Garcia.

Despite the community’s concerns over the message children will get from the City’s endorsement of pot, and where marijuana leads in terms of drug use, the Council voted 4-1 to place the tax on the ballot, with Greg Gonzalez as the lone dissenting vote. If passed the tax ordinance would impose a $25 per square foot tax on cannabis businesses or 10% of gross receipts, to maintain essential public safety and general City services.

And while voters have a choice whether or not to tax cannabis businesses in their City, they may still have those businesses in the city regardless depending on what the Council intends to do with a new ordinance. At the July 24 meeting the Woodlake City Council waived the first and second reading of Ordinance 610, and held a public hearing on the item before moving forward with a 5-0 vote. The Council will make their official motion on the ordinance during their Aug. 14 meeting.

Ordinance 610 repeals medical marijuana and mobile marijuana dispensaries, while setting up new guidelines for conditional uses for cannabis businesses. The ordinance also allows for commercial cultivation and sales with an up to 10% sales tax added on to the City’s already existing sales tax. And the guidelines in the ordinance are rather restrictive.

In the new ordinance cannabis businesses have to keep a current register of employees, have no signage on their premises, prohibits cannabis and alcohol consumption, odor from the building must be controlled, be in doors, buildings must be fitted with burglar alarms, perimeter lighting, camera systems have to be approved by the chief of police with a minimum of 5 mega pixel resolution, windows must have hardened bullet resistant windows and businesses must electronically track and trace systems for cannabis products. Among other requirements.

For the City, putting in security measures is a way to quell resident’s fear over marijuana and illegal activity that may come to the city. But enacting the ordinance as a whole allows for cannabis businesses to open shop and makes Woodlake eligible for public safety grants they would otherwise be missing out on.

Residents who spoke during the public comment portion of the ordinance item said that the City is conveying a message that it is okay to do drugs as long as there is money to be made from it. Several residents as well said that the City is gambling by passing the ordinance as voters can still vote down the tax in November. However, staff said they will lose the tax revenue coming from cannabis businesses they will still be gathering sales tax as they would from any other business in the city. And cities are encouraged to have rules in place that fit what they want before Jan. 1, 2018 when businesses can set up shop under State law.

Woodlake community development director Jason Waters also said in an interview with the Sun-Gazette that there are several hoops businesses have to jump through before they can open in Woodlake if the Council passes the ordinance. The least of which is applying through the city for vetting purposes and qualifying for a business license. But still residents are left with the choice to gather additional revenue from cannabis businesses by voting for the tax or foregoing revenue by voting it down, but as a whole residents do not have the option to keep cannabis businesses out of town.

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