The City of Manteca plans to benefit from marijuana dispensaries by taking a cut of the profits.
Broad details — although unlikely a hard fast percentage or dollar amount — will be discussed during a City Council workshop from 6:45 to 8:15 p.m. tonight at the Civic Center, 1001 W. Center St. The meeting will be livestreamed via the city’s website and carried live on Comcast Channel 97.
Community Benefit Agreements (CBA) would be required of all storefront marijuana dispensaries allowed in Manteca. They would “memorialize” the marijuana business’ commitment to turn over a certain amount of their profits each year to the city.
The city would then use the CBA take “to fund services, positions, and for other purposes that benefit the community.”
That essentially means anything the city wants to use the funds on.
Eliminates need for voter
approval for local pot tax
Such an approach effectively eliminates the need for voter approval in order to put a tax in place as required under California law. Jurisdictions that have gone the traditional taxing route needed to secure a two thirds approval. Typically to get support they had to develop specific spending targets such as for youth and senior programs and in some cases even to fund drug addiction programs.
By not seeking an additional local tax and going with CBAs it basically assures marijuana dispensaries will be a reality in Manteca in 2022 if the council gives its final approval in December.
The CBA receipts would be on top of the 8.25 percent sales tax rate per dollar spent that includes 1% that goes to the city’s general fund and half cent that goes to public service expenditures. The 8.25 percent sales tax includes the half cent Measure K countywide roads and transit tax. The rest goes to the State of California.
The sales tax and CBA assessment would be on top of a 15 percent state cannabis tax on the gross receipts of any retail sale. There is also a state cultivation tax of $9.25 per ounce for marijuana flowers and $2.75 for marijuana leaves.
The CBA came up as the preferred way to benefit the Manteca community in exchange for allowing retail storefront cannabis sales after municipal leaders researched what other cities have done.
One such city was Port Hueneme in Ventura County.
Manteca was supplied with a presentation by that city’s police department on the fiscal and environmental impacts of medicinal and adult use cannabis in Port Hueneme.
Port Hueneme — a coastal city in Southern California slightly larger than Ripon with a population of 21,544 — has 7 retail marijuana storefronts, 6 delivery operations, a cultivation operation, and 2 microbusinesses.
Those storefront operations front – are on or just off of — a 5,280-foot stretch of Channel Boulevard and another two within a block earning the area the nickname of “The Green Mile”.
How Port Hueneme
Port Hueneme has a $10,000 application deposit, $445 owner background check, $4,411 conditional use permit fee. $2,365 annual business license based on $2.5 million in annual gross receipts, $201 certificate of occupancy, and $10,000 for an annual audit and review.
Port Hueneme mandates:
*There are no after-hour gatherings such as social functions or events before opening or after close of business. Exceptions include sanctioned employee meetings, inventory, or pre-approved tours and inspections.
*Regular employees are required to wear uniforms that are distinguishable from the public. This allows officers to readily identify employees during any type of critical incident or inspection.
*No employee shall be under the influence of alcohol while on the premises. No employees shall be under the influence of marijuana as to cause noticeable impairment. Such impairment will be evaluated by a law enforcement drug recognition expert.
*Security guards shall be in uniform and readily identifiable. No security guard shall be operating in an “undercover” capacity without prior notification to law enforcement. All security personnel shall be in possession of a state mandated guard card and relevant endorsements.
*Employees and customers in the business shall take off all sunglasses, hat wear, hoodies, or any type of identification intrusion while in the business. Exceptions include religious headwear and patients undergoing special treatments which require a head dress.
*A high definition video security system will be remotely accessible by the Chief of Police or his designee at all times. At no time shall the business be open if the security system is down regardless of the presence of armed security guards.
*If a persistent odor exists which extends beyond the boundaries of the business, the store has 24 hours to remedy the violation. After 24 hours, the location will be closed until the problem is fixed.
*All first floor glass windows and doors need to be fortified with “bullet proof/break resistant glass” or shuttered with roll down doors during non-business hours, Bollards, planters or steel posts shall be placed in front of entry doors to prevent vehicle “smash and grabs”.
*”No loitering or soliciting” signs delineating state penal codes and city ordinances will be clearly displayed in and around premises including parking lots.
*Power outages will result in temporary closure of the business until all systems including security cameras and alarm systems are back on-line.
*All personnel will be “live-scanned” and undergo a thorough background investigation by the police department. Employees will not be authorized to work until an approval letter and badge has been issued by the police department.
*All personnel must complete a “Responsible Cannabis Server” certification course within six months of employment.
The Port Hueneme Police Department recommends cities:
*Place a cap on the number of cannabis businesses they plan to allow to open.
*Assign an individual to take ownership of the cannabis process.
*Make sure the police department is a key stakeholder and actively involved.
Disqualifications for ownership and workers include a violent or serious felony conviction or convictions involving drug trafficking, fraud, deceit, or embezzlement.
There are 251 dispensary employees in Port Hueneme involved in strictly storefront operations. They had an average pay of $18 an hour and $38,000 a year.
The storefronts had 2,200 customers per day in July 2020 or 66,000 customers per month.
Of those customers 35 percent were between the ages of 21 and 30, 25 percent between the ages of 31 and 40, 14 percent between the ages of 41 and 50, 12 percent between the ages of 51 and 60, and 14 percent over 60. Only 10 percent were Port Hueneme residents.
The city in 2020 received $2.5 million in cannabis taxes while the businesses made $500,000 in community contributions.
Since 2018 there has been a 26 percent drop in crime and no homicides along with a 1 percent decrease in property crimes within “The Green Mile”.
There are no automatic renewable of permits and undercover minor decoy operations are conducted.
To contact Dennis Wyatt, email firstname.lastname@example.org