Cal City may allow more pot permits
Study examines potential of luring customers
CALIFORNIA CITY — City officials will study the possibility of increasing the number of marijuana dispensary permits allowed within the city, after the possibility of such a move was brought before the City Council on Tuesday.
The issue was presented as a question of eliminating the limits on dispensaries from the municipal code, an item requested by Mayor Jeanie O’Laughlin.
“We have (existing marijuana) businesses in town that want to add dispensaries, mainly (storefront retail),” she said.
Additionally, locations situated near Highway 14 and Highway 58 within the city limits could capture traffic on those freeways.
“There are no dispensaries located close off the freeway from here all the way into LA and up to Mammoth. That could be a potential huge tax revenue source,” she said. “I think we are leaving a lot of money on the table by not having dispensaries close to the freeway.”
The municipal code currently states that a maximum of two retail storefront operations and 10 delivery operations may be permitted.
When the city originally adopted ordinances allowing for commercial medical marijuana operations within the city in 2016, it limited the number of permits for all types of operations, including cultivation, manufacturing and distribution. The number of dispensaries at that time was limited to two, based on one per every 13,000 residents.
The limits on permits for cultivation, manufacturing and distribution were lifted in 2017, and the code was revamped in 2018 to encompass not only medical but also recreational use, in line with changes to state law. The maximum number of dispensaries was also changed to allow for two retail storefront operations and two delivery-only operations.
The number of delivery-only operations permitted was increased from two to 10 in 2019.
According to City Manager Anna Linn, the city has two retail
storefront dispensaries and four delivery businesses in operation.
California City is counting on the commercial marijuana industry to provide a more robust tax base, in order to pay for services that are now supported through a special parcel tax.
“I have a real challenge with this,” Councilmember Karen Macedonio said, citing the gradual loosening of restrictions on the industry. “Our residents were very clear about (limiting) the number of dispensaries.”
She emphasized that the matter needs to be more widely discussed in the community, involving town hall meetings and the Planning Commission.
That concern regarding incrementalism was also voiced by former Councilmember Ron Smith. Allowing ever more dispensaries would eat away at the restrictions keeping outlets away from residences, schools, churches and parks, he said.
The discussion turned from the potential for removing the limits completely to increasing them.
Existing marijuana businesses came out on both sides of the issue.
David Kim, president of Royal Apothecary, one of the two storefront dispensaries in the city, called the proposal to eliminate the limits “alarming,” and said adding a great deal more dispensaries would increase pressures on the businesses already facing a challenging economy and competition from the black market.
“Why slice up a very, very small pie as it is?” he said. “It’s only going to hurt the businesses that are existing.”
On the other side of the argument, James Bryant of Traditional Cannabis Co. said there is a need for more outlets to serve the large customer base outside of Cal City. His company is already investing in the city.
However, Bryant agreed that unlimited permits would oversaturate the market and also have harmful effects.
Local real estate agent Josh Meister called for opening up the dispensary permits.
“Nobody can dictate what’s oversaturated in this market for cannabis. The potential for the dispensaries … is literally unlimited,” he said, given the vast population of Southern California that may be served. “Let’s open it up and welcome free enterprise.”
The lack of opportunity for public input on a controversial topic was also a concern by some from the community and the Council, who agreed to postpone a decision.
“This here was simply a discussion and consideration, not a decision,” Councilmember Jim Creighton said.
The Council came to a consensus that more information was needed regarding the potential market for retail marijuana dispensaries and the potential revenue benefits and drawbacks to increasing them. They directed staff to study the issue.
Additional public hearings would also be part any process to change the existing code.
Councilmember Kelly Kulikoff also questioned O’Laughlin’s ties to the commercial marijuana industry and whether she had a conflict of interest in the matter.
O’Laughlin, who was elected in November, previously served as the city’s finance director from mid-2016 until her resignation at the end of 2017. She later joined the efforts of some of the commercial marijuana firms seeking to locate in Cal City as a consultant.
She stated Tuesday that she had not worked with the industry since July 2020, months prior to her election.
“I do not work in the cannabis industry and I have not for almost a year now,” she said.