With the ban on commercial cannabis now lifted in Del Norte County, supervisors on Tuesday adopted more cannabis ordinances and set the tax rate for retail cannabis growing at 6 percent and manufacturing at 3 percent of gross receipts.
County Counsel Joel Campbell-Blair noted supervisors had discussed the ordinance at length and approval would complete the board’s promise to have retail, manufacturing and some level of cultivation” ordinances established by December.
According to staff reports, the permit process applies to all commercial cannabis activity and is designed to ensure that “all necessary information the County might like to know about a proposed operation is submitted to the county as part of the operation plan.” Required information will include plans for water use, waste discharge and hours of operation.
Permit applications will be submitted to the county planning commission for approval, and mirror state requirements.
Applicants will need to show they comply with all requirements, that their business will not impact the environment, that any related nuisances will be abated, and that adequate security will be in place. Applicants will also need to show no impact on surrounding sensitive land uses, including churches, schools, parks, public buildings or healthcare facilities.
When it comes to cultivation, the ordinance contains measures to essentially hide it from public view, so “that the use of the property for cannabis cultivation will not be readily apparent to a casual observer from a public space.”
Permits will be granted for a year and will require a public hearing for renewal.
“The regulation for the use permit and application are silent as to zoning,” said staff reports. “Like the retail and manufacturing regulations, the cultivation regulation of cannabis, when such activity can be conducted with a use permit. It is in the sections for the zones themselves that dictate whether cannabis cultivation is a permitted use with a use permit.”
Keep it hidden
Working group member Robert Derego said the ordinance was crafted based on the group’s estimation of what the board would enact, and in such a way that it would “make cannabis unseen in our community.”
“This ordinance is very much crafted so you don’t see it, (and) you don’t smell it,” he said. “Maybe a tiny bit of industry will be happening but you won’t know about it.”
He said environmental protection was also “heavily considered” in creating the ordinance, along with securing the county’s ability to tax and generate revenue for county operations. Derego called enacting of the ordinance “a small beginning,” saying the county now has an opportunity to create jobs in the industry. He predicted that any manufacturing activity would occur in existing buildings along Elk Valley Road, as they are among few in the county that would meet setback and other requirements.
Derego has managed Del Norte Patients Together for years and announced he plans to leave the working group soon so that he may apply for a retail permit himself.
Supervisor Roger Gitlin disagreed with Derego’s comments, keeping his own comments short before registering his vote against the ordinances.
“I’m just amazed by ‘we’ll keep it undercover, we’ll hide it, we’ll keep it away from everybody...’” Gitlin said. “Mr. Derego, it’s there. For those of you who support it, I wish you the best of luck.”
Gitlin said he’s highly skeptical the ordinances will be good for the county.
Supervisor Lori Cowan offered the motion to establish regulations for cultivation inside and outside the Coastal Zones, direct the clerk of the board to publish a summary of the ordinance in the local paper of record. The board approved the ordinances 4-1 to a smattering of applause.
Chair Chris Howard thanked members of the cannabis working group for their time and dedication, namely Jesse Davis, who has been the group’s spokesman for most of the process.
Since it was created, the supervisors’ Cannabis Working Group has been meeting to craft ordinances related to commercial cannabis in the county, which have been brought to supervisors for discussion and changes.
Taxation, to be exact
Supervisors approved tax rates for retail cultivation and manufacturing of cannabis, but could not change the tax rate for indoor and outdoor growing
Campbell-Blair noted the November election where voters approved a tax ordinance by a 62 percent margin. However, the vote only approved a range for the tax implementation, leaving supervisors to set the exact amount.
“What you have is a resolution with some blank spots in it,” he said.
Under public comment, resident Paula Dean suggested supervisors follow the lead of the tobacco industry and tax cannabis at the maximum rate.
Derego again encouraged job creation through manufacturing and export of cannabis edibles.
“There’s about a half billion dollars in edible consumption just within an hour of Sacramento,” Derego said, adding edibles have an expiration date and need to be continually manufactured. “I was hoping you could take the reins and set it at a minimum, and maybe make that an incentive as a job creator.”
Derego said while cultivation could employ seasonal workers, edibles would create year-round jobs producing a fresh product.
“I don’t want to attract more people here than live here but these aren’t the jobs that are going to do that,” Derego said. “I want to see jobs that provide some selection for the workforce.”
Derego said such jobs would allow the free market to work in favor of the poor community.
“Let’s see what we can export out of Del Norte again and let’s see what kind of job opportunities we can create,” he said.
Cowan said while she felt the tax should be as high as possible, she did not want to tax someone out of business.
Asked how the tax would be imposed or changed, Campbell-Blair said the ordinance was written to be intentionally silent on the issue of how often the rate could be changed.
“We’re creating an industry from scratch here and I don’t know how it’s going to go, so I don’t see any legal impediment to changing it,” he said, adding that it could be changed as the board sees fit.
He explained the limit for retail cannabis was 6 percent, and the limit for manufacturing was 3 percent. Asked by Gitlin about taxes on cultivation, Campbell-Blair explained the number was fixed at $1 per square foot for outdoor and $3 per square foot for indoor cultivation.
Supervisor Gerry Hemmingsen offered a motion the taxes be set at 5 and 2 percent, respectively. The motion failed for lack of a second.
“The voters approved it,” Hemmingsen said. “The board doesn’t get to change it.”
Gitlin offered a motion, seconded by Cowan. to set the taxes at the maximum rates of 6 and 3 percent, respectively.
The motion passed 4-1 with Howard voting no.
Supervisors took no action on a presentation and general discussion regarding potential regulation of cannabis nurseries and outdoor growing in the county. Discussions revolved around nuisance issues of light pollution, odors, pollen, the use of greenhouses and agricultural lands uses.
However, direction was given to County staff to continue researching issues about outdoor cultivation.