Sonoma City Council pushes forward on pot dispensaries

Sonoma city officials forged ahead with plans to license two cannabis dispensaries within the town limits, as City Council members on Monday mapped out a timeline and process for fielding proposals from potential pot-shop operators.

If all goes to plan, city officials hope to certify two cannabis dispensaries by August of 2020.

The council voted last spring to allow one store-front dispensary and one delivery-only dispensary and, at the time, imagined reviewing business applications by the end of summer. But following a string of planned PG&E power outages, among other interruptions, city officials have found themselves playing catchup on their commercial cannabis timeline.

Adding urgency to the matter is the approaching November 2020 election when a signature-qualified cannabis measure will appear on the ballot.

If passed by voters, the measure -- dubbed the Citizens for Local Access initiative -- would allow an unlimited number of dispensaries to operate in the city without use permits, according to commercial cannabis consultants HdL Company, which studied the initiative in 2018. City officials -- leery of the loose regulations on the initiative -- worry it may stand a better chance of passing if the city hasn’t made proper headway in establishing dispensaries under its own ordinance.

Mayor Amy Harrington at the meeting spoke to the need for the council to act with alacrity.

“The urgency here is that we do have a competing ordinance to allow unlimited marijuana dispensaries with no regulation whatsoever in the city of Sonoma -- and that is qualified for the ballot and that might pass,” said Harrington. “I think that would be terrible for this town. So we do have an obligation … to figure out something sensible so people aren’t left with the only choice of unlimited marijuana dispensaries.”

Other pressures around the 2020 election include the fact that two city council seats will be up for election – one held by pro-dispensary Harrington. If the seats are won by two cannabis skeptics, it could jeopardize the current council’s slim 3-2 pro-dispensary majority.

Councilmember David Cook, whose seat is up in 2020, but isn’t seeking re-election to instead run for county supervisor, said Sonoma is “too small” for a dispensary and that unincorporated county areas are more suitable for cannabis sales.

“I don’t see why this council doesn’t leave this process for a later date,” said Cook.

But Councilmember Logan Harvey agreed with Harrington that “we have a ticking clock” to certify a dispensary before the 2020 election. “At a certain point we kind of have to pass something,” said Harvey.

At the Monday meeting, HdL Company spokesperson David McPherson laid out a potential timeline for fielding dispensary applicants, as well as possible criteria city officials may consider when making final selections of the operators. Under the timeline, the city would call for dispensary proposals from Jan. 3 to Feb. 21 and in March officials would begin ranking the proposals on a point system. After a “proposal review committee” interviewed the most promising applicants, the City Council would name five finalists in May.

At that point, the finalists would have 45 days to secure a conditional lease at a site that conforms to the city’s regulations – and buffer zones around youth serving facilities – which limits the storefront dispensary to commercial zones, but allows the delivery business in multi-use zones.

Following site tours and further applicant consideration through the summer, the Council would make its final selections and award conditional approvals by the end of August.

San Francisco resident Erich Pearson, CEO of Sparc, which operates a 3-acre cannabis farm in Glen Ellen, cautioned against requiring a lease prior to being selected as an operator.

“Requiring an applicant to have a location will likely result in an out-of-state operator who can afford to pay unreasonable rent, the result of a bidding war over a few available properties,” said Pearson. “This will not result in the city of Sonoma getting an operator with local ties and values.”

Pearson told the council that, according to his informal research, he’s identified only one or two sites available to rent that would conform to the city’s storefront dispensary regulations – and that when he contacted them, “one was already in conversations with a multi-state operator to go into an option and tie up that property.”

But McPherson said that, based on his experience, licensing a dispensary before it has secured a property can result in long delays as the operator seeks an acceptable location. “The property is critical,” said McPherson.

Councilmember Harvey suggested weighting local-ties to applicants early in the review process. “Can we have a local preference, or an operator that’s operating in Sonoma County,” asked Harvey.

But McPherson cautioned against making local-ness an early-stage factor.

“You could do that, but then you might get the opposite where you don’t get five solid applicants,” said McPherson. Instead, he said any “local factor” could be considered after the finalists have been determined.

“Let’s say you have five really good (finalists) and the local guy is wonderful and that’s what separates them,” said McPherson. “You can weigh that significantly in your final selection.”

When submitting proposals, McPherson said applicants should present detailed descriptions of how their dispensary would operate – including product types, sales expectations and average amount of cannabis stored on site – as well as demonstrate proof of state licensing, a security plan, startup funds, an odor-control plan and insurance coverage.

Additionally, the city is requesting applicants demonstrate how their dispensary would provide “community benefits,” such as “employment for residents of the community, community contributions and/or economic incentives to the city.” According to the city staff report, any community benefits agreed upon with the operator will be incorporated into its terms and conditions approved by the city.

The city is also requiring an $11,000 deposit with each application to cover staff time and consultant fees.

In a preliminary decision, the council voted 3-2, with councilmembers David Cook and Madolyn Agrimonti against, to move forward with the consultant recommendations.

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