Stanislaus County supervisors could approve what officials are calling a conservative strategy for permitting marijuana dispensaries and other commercial cannabis activities.
The Board of Supervisors will consider a proposal Tuesday for allowing no more than seven retail dispensaries in the unincorporated area. The county would permit up to 54 other cannabis operations, including nurseries, manufacturing, testing, distribution and delivery services.
If approved, the rules will apply in county-governed territory. Modesto and the other eight cities in Stanislaus County will have their own rules for commercial cannabis.
The proposed county policy would prohibit outdoor cultivation of marijuana, but allow indoor growing for commercial purposes. A statewide initiative last November legalized marijuana for personal use. Commercial cannabis activities will be legal in California starting Jan. 1 but are subject to local permitting requirements.
Under development agreements, the county would collect a community benefit fee from dispensaries and other cannabis operations, generating an estimated $4 million to $7 million annually. According to a report, the fee revenue collected monthly or every three months would pay for enforcement of cannabis regulations and offset other costs associated with the business.
The proposed fees are expected to generate the same amount of revenue as a voter-approved general tax on marijuana, the report says.
The recommended county fees are 8 percent of gross sales for dispensaries; $5 to $10 per square foot for indoor cultivation; and 2.5 percent of gross sales for testing facilities.
Among other things, the county needs funding for responding to complaints about outdoor cultivation and for shutting down illegal operations, officials said..
If the board gives approval Tuesday, the county will accept initial applications from potential cannabis businesses between Oct. 2 and 20. The county will require a $4,359 non-refundable deposit from applicants.
Board of Supervisors Chairman Vito Chiesa worked for months with county staff and the HdL consulting group in developing the proposals.
Chiesa said the strategy will help establish control over the fast-growing cannabis business within the county’s boundaries. Retail dispensaries have been identified in 14 storefronts in the county-governed area, and there are hundreds of cultivation sites, Chiesa said.
“There are so many it would scare you,” Chiesa said. “We need a strategy to allow us to suppress what is going on.”
Chiesa said the full board could approve the recommendations or has the option of changing the total number of cannabis permits.
The 61 commercial cannabis permits is 35 percent of the interest registered in a California Department of Food and Agriculture survey last year. That survey found an interest level in the county for 172 permits spread across dispensaries, commercial cultivation, nurseries, manufacturing, testing and distribution.
The county proposal would allow one retail dispensary for every 16,000 residents in the unincorporated area. Officials gave some thought to a total ban on commercial cannabis activities, but the county would need to come up with $3.1 million a year for enforcement.
To decide which dispensaries are permitted, the county will use a scoring system based on background investigations, plans for safety, security and parking, and other criteria. The highest-scoring applicants also will go through the county land-use and permit review process.
After permits are issued for seven dispensaries, the county will likely send notices to non-permitted cannabis outlets setting a time limit for closing their doors, Chiesa said.
Chiesa said he expects most of the interest in the 54 other permits will come from indoor cultivation and manufacturing facilities. If the number of applications exceeds the limit, the county also will use a scoring system for approving those permits.
Chiesa talked with city representatives about a coordinated approach for taxing commercial cannabis, but several cities are exploring their own tax proposals. Modesto will have a marijuana tax on the ballot in November.
The Stanislaus County Board of Supervisors will meet at 9 a.m. Tuesday in the basement chambers of Tenth Street Place, at 1010 10th St., Modesto.