Oakdale maps its commercial cannabis future. How and when residents can offer input.

A public hearing for an ordinance that would pave the way for marijuana businesses in Oakdale will be held during the city’s next council meeting on Monday.

The ordinance would repeal the city’s ban on cannabis businesses and add language for the regulation of commercial operations and personal indoor grows.

All types of marijuana businesses would be confined to Oakdale’s limited industrial and light industrial districts on the south side of town.

The area is south of J Street on either side of South Yosemite Avenue, roughly to Kaufman Road on the west, Post and Warnerville roads on the east, and the city’s southern boundary north of Patterson Road.

Within those districts a smaller area – east of south Yosemite and ending on the south border at High Tech Parkway – has been designated for dispensaries, a place you can buy marijuana. The localized area is intended to keep dispensaries off of Yosemite Avenue and further from the TL Davis Sports Complex, where kids play soccer and baseball, said City Manager Bryan Whitemyer.

He said that way, unless you are going to patronize the dispensaries, you won’t even know they are there.

The Adult Use of Marijuana Act, approved by voters statewide in November 2016, allows for state-licensed businesses to start selling recreational marijuana Jan. 1.

In May, Oakdale began accepting proposals from marijuana businesses to learn how many, and what types, of businesses were interested in setting up shop in the city.

Fourteen people submitted proposals, half of whom were interested in opening dispensaries, Whitemyer said.

The proposed ordinance sets a maximum of two dispensaries but doesn’t limit other marijuana businesses like manufacturing, cultivation and laboratory testing.

For personal use, the proposed ordinance allows for a maximum of six plants per parcel that must be grown indoors. An inspection is required to obtain a permit each year.

Neighbor Riverbank passed a similar ordinance in August but does not limit the number of dispensaries that can operate and gives them more opportunities for storefronts, within all commercial zones.

Originally, Riverbank’s ordinance was going to allow for one dispensary for every 16,000 residents, but the council “removed the ratio altogether and decided to let the market decide, like any other business, how many are appropriate,” said City Manager Sean Scully. “We did not want to create some sort of artificial monopoly.”

When Oakdale’s proposed ordinance was presented to the City Council last month, Mayor Pro Tem Tom Dunlop expressed concern about the home growing portion.

“I for one think the home grows are the biggest risk to our children,” he said. “I want to make sure people who grow marijuana in their home know ... that if your marijuana ... ends up at the high school or junior high or elementary school you are going to held accountable.”

He said he wants stricter regulations for home grows and higher administrative citations for violators, which city staff had set at $250 for the first citation, $500 for the second and $1,000 for any subsequent fines.

The council voted 4-1, with councilwoman Cherilyn Bairos dissenting, to move forward with staff’s recommendation to allow commercial cannabis within the city and instructed staff to add additional, but legally defensible, regulations and fines for home growing operations.

The council also instructed staff to study what other cities are charging marijuana businesses.

Ceres was the first city in Stanislaus County to approve development agreements with two marijuana businesses.

An indoor cultivation and manufacturing company agreed to pay Ceres $2.7 million in fees over three years. A medical marijuana dispensary approved by the Ceres City Council last week is expected to make an initial fee payment of $80,000 and between $40,000 and $100,000 a month depending on sales.

Riverbank followed a similar model as Ceres and Oakdale is proposing the same, requiring a development agreement and conditional use permit for all cannabis businesses.

Scully said one dispensary business has submitted an application in Riverbank and other dispensaries and commercial manufacturing businesses have shown interest. He expects the dispensiary that already has applied will go before the council before the end of the year.

Assuming the ordinance passes, Oakdale’s Whitemyer said the city will first consider the 14 businesses that submitted proposals in May before accepting any new applications.

Oakdale staff estimates an ordinance allowing commercial marijuana business will cost the city about $870,000 a year for enforcement and administrative costs, which will be funded by the revenue derived from the development agreement with any approved marijuana business, Whitemyer said.

If the council had decided to ban commercial marijuana business, city staff estimates it would cost $550,000 to enforce with no additional revenue to support that enforcement.

Oakdale’s public hearing and first reading of the ordinance will be Monday at 7 p.m. in the council chambers at 277 N. Second Ave. If the ordinance is approved, a second reading will be done at the Nov. 20 council meeting and the ordinance would take effect 30 days after that.

This story was originally published November 2, 2017 at 6:43 PM with the headline "Oakdale maps its commercial cannabis future. How and when residents can offer input.."