Stanislaus County and its cities grapple with legalized marijuana

Some cities in Stanislaus County are wary of legalized marijuana and are laying down rules for residents who want to grow it.

Some cities that need the money see dollar signs in legalized pot, while county officials worry about impacts on services such as public safety, environmental resources, code enforcement and the district attorney’s office.

“Everyone has their own value systems,” said county Board of Supervisors Chairman Vito Chiesa, who has held meetings with representatives of the nine cities. “I don’t like it either, but the people voted it in.”

Chiesa hopes to reach a consensus with the cities – and his own board – on regulating marijuana and sharing revenues similar to what’s done with the Measure L transportation tax.

The Adult Use of Marijuana Act, approved by voters in November, legalized recreational pot with rules on where it can be smoked and gives local jurisdictions the ability to regulate and tax the commercial trade.

The cities and county could simply disallow dispensaries and commercial activities, letting users grow it at home and buy it someplace else. But some top officials are moving toward allowing some commercial activities – within limits.

Each city and the county could seek voter consent to tax marijuana sales or seek approval for a countywide taxing authority to assess the taxes and distribute the revenue to the cities and county.

The county won’t have a marijuana tax on the the ballot in November but could shoot for the June 2018 primary ballot.

Local taxes on marijuana sales could range from 7 to 15 percent. In addition, local jurisdictions can assess a square-footage charge on commercial nurseries and production facilities.

Chiesa, who says he doesn’t enjoy taking the lead on marijuana issues, said he could live with 10 dispensaries dotting the county map – less than the 17 known dispensaries today – and says they shouldn’t be clustered in one or two cities. He also is open to some regulated commercial cultivation.

It doesn’t appear that backyard cultivation in residential areas will be allowed in any city or the county unincorporated area, because of the pungent odors. Cities are exploring a permit process for residents wishing to grow the six indoor plants for personal use allowed under the law.

Waterford wasted no time after passage of Proposition 64, putting a permit process on the books in February. City officials say it will help first responders know where pot is grown in neighborhoods and the city hopes to limit the horror stories of indoor cultivation.

Among the concerns for cities are toxic mold spawned by humid growing conditions in homes, fire hazards created by grow lights and electrical overloads, and fertilizers flushed into the sanitary sewer system.

“We don’t see a benefit to having marijuana in our community,” City Manager Tim Ogden said. “It remains in violation of federal law. We want to retain local control to do what is in the best interest of our community.”

In Waterford, renters wanting to grow six plants need permission from their landlords. Those applying for the city permit may not have a felony on their record.

The applications must include plans for ventilation and building modifications and a list of chemicals used in the growing process.

The city will conduct annual inspections of the homes and the ordinance authorizes a random inspection with 24-hour prior notice. The cost of the permit is $361 based on staff time for reviewing applications and inspecting homes.

Ogden said last week that a dozen people had picked up the application forms but no one had returned them.

The Ceres City Council also plans to impose rules on in-home cultivation. Council members and planning commissioners have looked at Waterford’s permit process and one developed by Indian Wells in Southern California.

“The fear is that it could get out of control,” Ceres Mayor Chris Vierra said. “We need to be cognizant of the things that happen. We just need to be able to monitor them.”

The Turlock City Council decided in December to prohibit commercial marijuana activities under Proposition 64, with the ban including sales outlets, commercial cultivation and deliveries inside the city. But it delayed a decision on a permit process for residential grows.

Modesto workshop

Modesto officials do not appear to favor outdoor marijuana plots in residential areas.

At a workshop last week, city staff did not recommend issuing permits for indoor residential grows, but the city could impose other regulations, such as requiring tenants to seek permission from landlords and not allowing residents to grow marijuana if children live in the residence.

Modesto’s City Council still is trying to reach consensus on what its response should be to Proposition 64, including whether it should work with Stanislaus County.

Council members appear to favor allowing some marijuana businesses and raising money through taxing them. But they don’t have a lot of time if Modesto wants to go it alone and put a general tax – which needs a simple majority to pass – on the November ballot.

Council members Tony Madrigal and Kristi Ah You spoke in favor of getting a tax on the November ballot and having the city develop its own regulations. “We just cannot wait,” Madrigal said. “I’m not inclined to wait for some kind of collaboration with the county that is not clear at this point.”

Council members Bill Zoslocki and Doug Ridenour voiced support for working with the county. Another workshop is set for Tuesday.

Another alternative

Putting a tax measure on the ballot is the not the only option for cities looking for revenue from the emerging cannabis industry. On Monday, the Ceres City Council could approve a development agreement for a medical marijuana production facility in Miller Industrial Park south of Service Road.

The 20,000 square-foot facility is proposed for research and making medicinal products for children with seizure disorders and adults with health problems. Under a proposed three-year agreement, JMR Management would pay a total of $2.7 million in service impact fees to the city.

Ceres says it will use the money for general fund services. The state has not issued final licensing guidelines for this type of facility.

In a state-of-the-city address in February, Riverbank Mayor Richard O’Brien predicted that revenue from taxing marijuana won’t cover the costs of responding to problems caused by Proposition 64.

“We will comply with Proposition 64,” O’Brien said Friday. “We are discussing what we are going to allow and how it will be allowed.”

Patterson held a public workshop in March on legalized marijuana. Mayor Deborah Novelli did not return a phone message from The Bee.

Stanislaus County supervisors talked about legalized marijuana at a “retreat” Tuesday in Knights Ferry. County government is responsible for a sprawling territory, where medicinal dispensaries and some cultivators have operated in the shadows.

Supervisor Terry Withrow said none of the supervisors wanted to see Proposition 64 pass, “but this is the law, we are stuck with it.” Stanislaus could aspire to be a “dry” county, letting users have their six plants at home, but not allowing dispensaries, commercial cultivation and manufacturing.

“I don’t want cultivation in our county,” Withrow said. “I think it breeds all kinds of trouble. There is a reason they have a ton of security. We have a problem with walnuts being stolen and you can imagine what will happen with marijuana because of the value. Crime is going to be around this.”

The county expects to have service costs, however, if state-licensed pot shops are allowed in cities, putting the county in the position of permitting and taxing dispensaries to pay for the impact on law enforcement and social services, Withrow said. Critics of legalization have suggested it will feed the drug culture and increase the burden for law enforcement and social programs.

Retail sales will not begin until licensed stores are in business after Jan. 1, 2018.

If local officials are not sure what to do with legalized marijuana, the November election did not deliver a resounding statement from local voters. Proposition 64 was approved in Stanislaus County by a margin of 735 votes out of 172,000 cast, or 50.21 percent in favor and 49.79 percent against.

The Modesto City Council will hold another workshop on legalized marijuana at 2 p.m. Tuesday in the council chambers at Tenth Street Place, at 1010 10th St.

This story was originally published May 6, 2017 at 5:07 PM with the headline "Stanislaus County and its cities grapple with legalized marijuana."