Sonoma's city council picks 2 to present dispensary plans in August
And then there were two. The City of Sonoma's cannabis sweepstakes winnowed itself down from the ten applicants to the two blessed with the council's approval to continue to Phase 2 of the application process: Locate a suitable storefront and secure a zoning verification in 45 days' time.
Spoiler alert: The locals won the night.
The council's job was to decide which if any of the final four applicants deserved to advance. “We're now down to four very qualified proposers, and we're very fortunate as a community to have that flexibility,” said Public Works Director David Storer, who has headed the process.
Coastal Sonoma, Justice Grown, Lighthouse Sonoma and SPARC were still in the running – and the councilmembers had their questions ready.
Though many assumed that two would be picked, there really was no such assurance: They could advance all four, or none at all, or any number they chose, according to Storer.
The second permit on the table, to allow a delivery-only service if retail was not available, essentially evaporated during the council's first round of questions. The first to appear was Coastal Sonoma, a Santa Barbara-based business, coincidentally the only one of the remaining applicants to check the box expressing interest in a non-store front retail business.
So they got the loaded question, from Amy Harrington: “If you were delivery-only, what would your vision be about that?”
The answer came from Coastal's CEO, Julian Michalowski. “From a financial perspective, we would not move forward with a delivery-only permit,” he stated emphatically, citing labor and operational costs. He said enthusiastically that Coastal would do retail and delivery. “That allows us to make the numbers work,” citing increased delivery sales during the covid emergency.
A minute later, Harrington reiterated, “Just to clarify for the staff, with this statement we have no applicants who want delivery only.”
Shifting in his seat, Storer replied, “Yes, that would appear to be the case.”
For the most part Harrington tried to pin down all of the applicants on how long it would take them become operational; David Cook asked how long it would take them to become profitable and how many visits that would take; Rachel Hundley wanted to know how many of their dispensaries were actually open and what the role of the locals would be if the company was based elsewhere.
Mayor Logan Harvey, steering the Zoom meeting like a boss, focused his questions on community benefits, and Coastal found their most generous promise turn into quicksand.
Included in the Community Benefits section of their application was a vow that they would provide “$1 million (in) financial investments to Sonoma and the entire Sonoma Valley community over the course of 5 years.”
Though the offer was clearly well-intentioned, it was a bit broadly worded for Harvey, and Hundley, and Harrington, who questioned why they had made such a promise instead of a percentage of annual net, as was more usual and comparable to the other applicants. “So a million dollars sounds great, but I want to make sure if you're selected, that comes to fruition,” said Harrington.
If Coastal got all the tough questions, they also got the most time – nearly an hour of the council's meeting was spent reviewing their application. The next applicant was the Matanzas Alliance, representing Justice Grown, as home-grown a cannabis network as you can find in Sonoma County.
From Peace in Medicine cofounders Barry Wood and former Sebastopol Mayor Robert Jacobs to Sonoma's own former Mayor Ken Brown and Jewel Mathieson, who co-founded Sonoma Patient group in 2004, their local cred was strong. And, in contrast to their predecessor whose first dispensary opened only in September 2019, they've been doing business with both medicinal and recreational cannabis for over a decade.
Outside backers came from a legal rights advocacy group, Loevy & Loevy, and even though they're based in Chicago their efforts to overturn wrongful convictions struck a chord with the council, as the meeting fell in the middle of nation-wide demonstrations over the death of Charles Floyd.
But it was Mathison who spoke with the passion of a true believer rather than the cunning of a sharp operator, embracing the medical value of cannabis and cheering the legal efforts of the investors. “I'm so excited to be part of this cleaning up of the mess we made with the drug war,” she said.
Lighthouse Sonoma was next, like Coastal primarily an outside company with a local representative, Melanie King. Their other dispensaries are in the Palm Springs area, but their investors are looking at a more nationwide footing. Still, King promised to hire “100 percent Sonoma Valley-based employees,” and the group upped their wage guarantee to $17 an hour, more with tips.
Lighthouse also seemed prepared to grapple with the possible passage of the petition, and the current feeling of the city council that maybe a second dispensary wouldn't be such a bad idea.
“This is not going to be a one-horse town forever, we have to be nimble,” said King.
Erich Pearson and several SPARC colleagues were next, all of them from the North Bay. SPARC has five current dispensaries, two in Sonoma County, but unlike the other applicants they have no other dispensaries in proposal, just Sonoma.
“We didn't set out three years ago with venture capital money, spreading across the country trying to roll up opportunities and applications,” said Pearson “We're focused on where we are, northern California, and building a real business.”
Finance VP Kelly Rogoff said that she was a very conservative business manager, but pointed out that though they don't give large grants, they brought $9 million to the Sonoma county economy last year. “What we contribute to the community is actually everything from our business,” she said.
When SPARC's time ended, council discussion was brief. Nearly every one named more than one candidate as worth moving on, and Cook thought that all should.
“Any of these four applicants would be appropriate in Sonoma, and really be a good partner for the city,” said Mayor Harvey. “But I think we do need to whittle it down as we move into the location selection.”
So when a motion was called for, Harrington moved for Justice Grown and SPARC to be approved, which passed unanimously.
The two will be back before the council in 45 days to present their chosen location and further details on their opening plans, and perhaps as soon as the end of the year, Sonoma will have at least one retail cannabis dispensary.