Sonoma’s foggy foray into legalized marijuana continued this week following a City Council-led workshop to hash over the repercussions of last November’s passage of Proposition 64.
The Council met in a special open session Monday to solicit feedback from city cannabis consultants and hear public comment – a first step in revising Sonoma’s marijuana regulations as the state prepares to lift prohibitions upon the buying and selling of recreational pot in 2018.
As the city staff report on the workshop described it, “the City Council is currently gathering information to help decide which types of cannabis-related businesses, if any, should be allowed in Sonoma and, if allowed, where they would go and how they would operate.”
California voters approved legalizing medical cannabis in 1996, while last year’s passage of Prop. 64 brought recreational usage into the legal fold. However, in 2015 the City of Sonoma reaffirmed its prohibition medical marijuana dispensaries and delivery services, and then in 2016 passed moratoria restricting the indoor cultivation of non-medical marijuana, and prohibiting the outdoor cultivation of non-medical marijuana.
But now the city finds itself wading into bong waters of a deeper nature, as state legalization brings questions about retail sales, licensing, permitting, taxation, youth access and law enforcement, among others.
While the council workshop was intended as merely an information session, with no set decisions called for, City Attorney Jeff Walters recommended they “freeze the status quo in place until the council decides what it ultimately wants to do.”
Consultants from Muni Services cannabis consultants presented several questions for the Council to consider, such as: What kind of commercial cannabis businesses are wanted in the community? And what level of fees and taxes are appropriate?
According to Muni Services, a typical dispensary averages revenues of about $900,000 per square foot of retail space; cultivation and manufacturing businesses average annual revenues between $2 million and $15 million. Based on that, the Muni consultants said a local tax rate of 5 percent on cannabis sales would generate about $45,000 to $135,000 in annual revenue for the city.
Muni cannabis advisor Larry Bergkamp stressed that since banks are typically more wary of adhering to federal legal guidelines the vast majority of city cannabis revenues would come in cash.
“If you do impose commercial cannabis operations and impose taxes or fees on those the city will begin to receive large amounts of cash,” said Bergkamp. “Big pillow cases of large amounts of cash in small denominations.”
And cash transactions bring along a whole host of additional considerations, said Bergkamp – from city staff handling bills tainted with residue and odors to enlisting armored car services to transfer the funds.
Sonoma Police Chief Bret Sackett echoed those concerns, saying “cash businesses… are high risks for theft or other robberies.” Sackett said that additional challenges for law enforcement include the inability to accurately gauge cannabis intoxication levels and mitigating youth access to marijuana in the event the drug becomes even more prolific in the Valley.
Several community members added their two cents to the proceedings – the vast majority of them calling for, at the very least, an end to the city’s prohibition on medical marijuana.
Sonoma resident Cecelia Ponicsan said she’d support a dispensary operated out of Sonoma Valley Hospital, but cautioned against wine-tasting rooms being licensed to dispense.