916.899.5072 KFinn@KFinnertyLaw.com

Public Education is Needed for Communities to Reap the Benefits of their Cannabis Neighbors – Millions of Dollars Will Fund Local Neighborhood Associations and Projects

By Kathleen E. Finnerty, Esq.
KFinn@KFinnertyLaw.com
www.californiacannabislaw.org
916.899.5072

The City of Sacramento is currently processing over 60 applications for cannabis cultivation within its city limits.  Some neighbors have expressed angst over having cultivation facilities located near them.  While some may oppose cannabis-based businesses for personal, political or other reasons, most of the adverse public opinion expressed is based on assumptions, without a true understanding of the complex vetting process and the community benefits the legal commercial cultivation businesses bring.

This article attempts to highlight the impact that cannabis cultivation can bring to the Sacramento areas where it is lawful to cultivate.

THERE ARE THREE TYPES OF “GROWS” PERMITTED IN SACRAMENTO. 

Sacramento made specific efforts to protect the small, craft cultivators so that the industry is not dominated by those with more money than ties to Sacramento.  The three types of grows are listed below with the corresponding sizes and Business Permit Fees:

Permit Type     Size                                  Initial Application Fee       Renewal Fee
Class A             Up to 5,000 square feet    $9,700                                 $8,240
Class B             Up to 10,000 square feet  $20,210                               $17,230

Class C             Up to 22,000 square feet  $28,910                               $24,630

In truth, most cultivation facilities under 5,000 sq. ft. are virtually invisible to outsiders, and the City has made certain of that by its sign limitations, mandated odor control and limiting access to those facilities.

Additionally, each cultivation project must obtain a conditional use permit.  The fees for that permit are summarized below:

From the simplest permit to the most complex, there are varying fees required depending on the level of review required.   For example, the lowest anticipated fee is “Zoning Administrator Conditional Use Permit” (No exterior changes to building and/or site).

Conditional Use Permit                  $13,815.00
Environmental Review                     $113.00*
Planning Technology Fee (8%)       $1,114.24
Public Works Deposit                       $1,000.00
Utilities Deposit                                $304.00
Fire Deposit                                       $294.00
TOTAL                                                 $16,640.24 

The highest anticipated fee is “Zoning Administrator Conditional Use Permit” (Director Level Site Plan/Design Review required)

Conditional Use Permit                          $13,815.00
Site Plan/Design Review                        $10,000.00
Negative Declaration (if required)             $2,500.00
Planning Technology Fee (8%)               $1,914.24
Public Works Deposit                               $1,000.00
Utilities Deposit                                        $304.00
Fire Deposit                                               $294.00
TOTAL                                                         $29,827.24 

A planning and design commission review, with over $5,000 in additional fees, is required for proposed uses within 600 feet of a park, or for a building over 125,000 square feet.

THERE ARE NUMEROUS REGULATORY CONTROLS IN PLACE TO MITIGATE IMPACT ON NEIGHBORS.

Cultivation facilities must obtain two permits from Sacramento.  The first is a Conditional Use Permit (land zoning), and the second is a Business Operations Permit.

The Conditional Use Permit Application for Cannabis is 33-pages long, and requires everything from full size plans for interior and exterior demolition and construction (with instructions for how the plans are to be folded), landscaping plans, to proposed trash and recycling areas.  Virtually nothing is left to the imagination.

All new projects are required to comply with Water Efficient Landscape Requirements contained in City Code Section 15.92.

Visual representation of the night time lighting proposed on all building elevations must be provided to give an indication of the effect of security and decorative lighting.

All cultivation facilities must be fenced, must have specific security measures in place to protect the facility from intrusion, and make certain that only authorized personnel (employee adults over 21 years old) are on the premises.

All “owners” must clear a criminal history/background from the Sacramento Police Department.

No outside generators are permitted to mitigate noise.

Odor control systems are required to mitigate odors.

Proof of insurance is required.

All entrances must be visible from the street

A water efficiency plan must be in place.

The facilities must be designed so that the cannabis plants cannot be seen from the outside.

Cultivation is limited to areas zoned for light and heavy industrial facilities, agriculture, or general and heavy commercial uses.  Extensive set backs are required to mitigate any noise or disruption to neighbors.

CULTIVATION FACILITIES ARE INTENDED TO BE DISCREET AND ENVIRONMENTALLY FRIENDLY.

Only one exterior sign to advertise the business is permitted.  The sign cannot be illuminated and cannot exceed six square feet in area, meaning the signs can be no larger than 2’ x 3’, or 1’ x 6’, and cannot be lighted.

All conditional use permits applications are routed to SMUD for review with reliable and efficient energy solutions as the desired result.

Every application must include a plan to reduce or eliminate, or otherwise control pesticides, fertilizers or other substances in the cultivation to mitigate the risk of accident discharge into the wastewater systems.   Very detailed wastewater management plans are required.

For some areas, e.g. North Sacramento, Swanston and Marysville Blvd., the City has issued specific Design Guidelines that must also be complied with.  Some of these design guidelines require design for transit oriented development and sustainability through high performance design.

THE NEIGHBORHOOD RESPONSIBILITY PLANS WILL BENEFIT NEIGHBORHOODS WITH MILLIONS OF DOLLARS

The purpose of the Neighborhood Responsibility Plan (NRP) is to address the potential adverse impact of marijuana cultivation on the neighborhood surrounding the cultivation site.

Each cultivation facility must enter into a Neighborhood Responsibility Agreement with the City which requires licensed facilities to make monthly payments of 1% of the gross receipts of every marijuana manufacturing (cultivation) business on the property.  Alternatively, they can agree to pay a fee in an amount to be established by a development impact fee study.  After working with dozens of business owners applying for or funding these cultivation facilities, every single grower has reacted favorably to a percentage of their profits being invested in the local communities.  One applicant, who wanted to remain anonymous so long as his application was pending, said “The business of legal cannabis is a great opportunity on so many levels.  We want to use this opportunity to help make the surrounding neighborhoods better because we are there.”

These cultivation facilities will generate a lot of money for the communities in which they are located. A 22,000-square foot cultivation can generate between $3,000,000 and $10,000,000 per year, based on conservative estimates.  That means for each grower, $30,000 to $100,000 per year will be paid to the City on behalf of the appropriate community.

A recent piece by KCRA noted that more than one-third of the applications for potential cultivation sites are within the area stretching along the north side of Highway 160, from roughly Arden Way to Main Avenue, and another half of the applications are in the industrial area centered around Florin-Perkins Road, bounded by Power Inn Road on the West and South Watt Avenue on the East.

An aerial view of these facilities reveals that they are largely in industrial areas, and not residential communities.

LOCAL NEIGHBORHOODS STAND TO RECEIVE MILLIONS OF DOLLARS

With respect to and for Kenneth Hooker, who was mentioned in the KCRA article as a vocal opponent to cultivation facilities in the Hagginwood neighborhood he grew up in, as of this date, no applications have been submitted for his neighborhood as its boundaries are typically defined.

But, if one looks at the North Sacramento neighborhood, 10 applications have been submitted.  If 10 cultivation sites are permitted, those businesses could easily generate revenue of $300,000 – $1,000,000 per year for a neighborhood in dire need of funding for the job training, health, and more opportunities promoting the well-being of its residents.  According to published survey data, the residents of North Sacramento are low income, making it among the lowest income neighborhoods in America. Neighborhood Scout’s research shows that this neighborhood has an income lower than 93.4% of U.S. neighborhoods. With 58.1% of the children here below the federal poverty line, this neighborhood has a higher rate of childhood poverty than 94.7% of U.S. neighborhoods.

Likewise, the Walsh Station neighborhood in Sacramento where there are currently 22 applications pending is a lower-middle income area, making it a below average income neighborhood. Neighborhood Scout’s research shows that this neighborhood has an income lower than 68.0% of U.S. neighborhoods. With 23.8% of the children here below the federal poverty line, this neighborhood has a higher rate of childhood poverty than 63.4% of U.S. neighborhoods.  This neighborhood, located in Council member Eric Guerra’s district, stands to gain $660,000 to $2.2 million annually.

Numerous, high quality after-school programs, senior health programs, drug and alcohol rehabilitation centers and job training facilities could be funded and maintained with such a steady revenue stream.

CANNABIS TAXES ARE BEING USED TO FUND ADDITIONAL POLICE OFFICERS AND FIREFIGHTERS

The City of Sacramento has dedicated a significant portion of its cannabis related revenue to hire new police officers and code enforcement personnel. The city full expects to use the cannabis revenue to hire two fire inspection officers, 16 law enforcement officers, one animal control officer, four code enforcement officers, four building inspectors, a senior deputy attorney, and others.

Sacramento has 30 locally permitted medical marijuana dispensaries, which pay the city $4 million in annual taxes.  The city expects to license more than 260 additional cannabis businesses, including 30 marijuana delivery businesses (on top of deliveries allowed by the 30 dispensaries), 200 commercial marijuana-cultivation businesses,  four cannabis testing labs and five cannabis transportation businesses, and 25 cannabis product manufacturing businesses.

If only 100 cultivation facilities are licensed and pay into the NRP, the City of Sacramento stands to collect $3,000,000 – $10,000,000 per year solely for the communities in which the facilities are located.  If 200 cultivation facilities are licensed and pay into the NRP, the City of Sacramento stands to collect $6,000,000-$20,000,000 per year from cultivators alone, for the benefit of communities in which the facilities are geographically situated.  This development movement can be a great opportunity for these neighborhoods to increase property values, eliminate blight, increase employment rates and funds critical social service programs.

That is the other side of the story.