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A tax on illegal pot shops? Riverbank still would want its cut, puts it to voters

Flavors, on Patterson Road, is Riverbank's first commercial marijuana dispensary. Pictured June 12, 2018.
Flavors, on Patterson Road, is Riverbank's first commercial marijuana dispensary. Pictured June 12, 2018. gstapley@modbee.com

Voters in Riverbank will decide in November whether to impose a marijuana tax that's unlikely to ever be used.

It's illegal to open a cannabis dispensary here without a permit from City Hall, and without a special deal spelling out how much of a dispensary's income the city can take. So far, one such business is open, and a second hopes to soon.

Just in case a rogue pot shop sets up illegally, city leaders want voters to approve a cannabis tax guaranteeing that the city gets its cut of the profit. The City Council this week unanimously agreed to put the matter before voters on the November ballot.

If approved by a majority of voters, the tax also could apply if state or federal agencies suddenly declare that Riverbank's permits and so-called developer agreements are no good, officials say.

Flavors, at busy Patterson and Oakdale roads, opened a few weeks ago. Another commercial dispensary is waiting for the city to approve building permits for renovating the former downtown Riverbank Hotel at 6609 Third St. to accommodate Riverbank Cannabis Collective.

Recent petitions aimed at revoking the two permits and their respective deals with City Hall failed because marijuana opponents did not submit enough valid signatures of Riverbank voters.

Needing 992 signatures to force the City Council to reconsider, or to force a citywide referendum, opponents of Flavors gathered 1,155, but only 839 were deemed valid. The invalid signatures might have come from people who aren't registered to vote, or who don't live in Riverbank. Petitioners also collected 1,137 signatures opposing Riverbank Cannabis Collective, but only 832 were deemed valid.

On Tuesday, Councilwoman Leanne Jones Cruz balked at city staff's recommendation that the council ask voters for a cannabis tax of up to 15 percent of sales.

"I have some issues with creating taxes just to create taxes," Jones Cruz said, reasoning that consumers would bear the brunt. But she agreed to put the matter before voters when the other council members lowered the maximum potential tax from 15 percent to 10 percent.

City Manager Sean Scully acknowledged it's unlikely the tax would ever be used, and said if a rogue operator were discovered, the city would shut it down.

Also Tuesday, the council:

Put Mayor Richard O'Brien and vice mayor Darlene Barber-Martinez on a committee to come up with appropriate ballot language for the cannabis tax.

Created a new account to hold cannabis revenue, including money already received from Flavors. Councilman Cal Campbell cast the only dissenting vote because new priorities do not direct spending the money only on police.

Created a part-time job to enforce some cannabis regulations, including state limits on indoor grows for personal use. The employee also would help enforce a ban on abandoned vehicles.

Garth Stapley: 209-578-2390

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