Voters will decide future of cannabis-related businesses in Hemet
■ By Taj Shorter / City Reporter
This November, Hemet residents will be able to vote on whether or not the city will have a stake in local commercial cannabis businesses. During a special meeting held by Hemet City Council on Aug. 7, a decision was reached on potentially regulating cannabis revenue from non-retail operations. City Council passed motions to adopt two different resolutions – one placing cannabis on the ballot and the other enabling a temporary cannabis prohibition.
The council’s actions were in response to a citizen-sponsored initiative.
The first motion was on Resolution No. 18-068, which is the resolution needed to put cannabis on the ballot to allow non-retail cannabis businesses in manufacturing zones. If it were not adopted, the city would be liable to be sued and accrue a mountain of fees, which would ultimately be a “more costly” way of placing it on the ballot. 18-068 is a city-sponsored initiative referred to as the “tax and regulate” measure. The resolution sets parameters based on a FM3 survey and would allow maximum flexibility for city council to regulate businesses. This resolution was approved by a 3 to 1 vote. Karlee Meyer was not present to cast a vote.
The second adopted resolution was 18-070, which involved the regulation of non-retail commercial cannabis operations but deferred it for two years with a temporary cannabis prohibition. The deliberation was between that and 18-069, which allowed for immediate regulation. It established a one-year time frame after it’s passed for the city council to adopt an ordinance permitting cannabis businesses in the city consistent with the criteria in the initiative. This measure, a potentially automatic tax initiative, was rejected.
According to the adopted 18-070 measure, if passed by voters, it will initiate a cannabis prohibition until December 2020. After that, it will enact a 15 percent tax on gross revenues of dispensaries and other cannabis businesses, such as testing labs and distributors. Additionally, a 25 percent gross receipt tax on manufacturers will be established. As for cultivators, it would be $30 per square foot of cultivation space. 18-070 was adopted by a unanimous vote.
Mayor Michael Perciful expressed his overall opposition to cannabis regulation:
“There is still that conflict between state and federal law,” said Perciful. “My concern is that, you know, is there potential liability to the city if we move forward and allow this illegal activity under federal law?”
Other council members expressed their concern as well, especially regarding the time frame for regulation. “We’ve got to have time to put together a structure that will be acceptable to the citizens and beneficial to the city and workable for staff,” said Councilwoman Linda Krupa. “I am not prepared to lose staff over a cannabis issue.” Presumably Krupa was referring to the job the city would undertake in regulating and enforcing the measures.
City Council Cannabis Votes
Shall the ordinance proposed by residents of the City be adopted allowing non-retail cannabis businesses in manufacturing zones without a city-issued discretionary approval, requiring cannabis businesses to be at least 1000 feet apart, giving certain cannabis business operators priority over others in establishing their businesses in the City, and taxing cannabis businesses at the rate of $10 per square foot of space used in connection with commercial cannabis activity. APPROVED
To help fund general municipal services, including police protection / crime suppression services, fire prevention, suppression services, emergency medical services, park, recreation, and library facilities and services, shall the City sponsored ordinance be approved allowing medicinal cannabis dispensaries, cannabis cultivation, manufacturing, distribution and testing subject to local regulation including criminal background checks, annual licenses, conditional use permits, and separation from sensitive uses, and taxing cannabis businesses, expected to generate at least $3,500,000 annually. REJECTED
Shall the City-sponsored ordinance be approved prohibiting cannabis businesses in the City through December 31 , 2O2O and establishing a tax on cannabis businesses that will apply to illegally operating businesses and, if subsequent legislative action is taken by the City Council after December 31, 2020 to permit cannabis businesses in the City, will apply to legally established cannabis businesses, estimated to generate approximately $3,500,000 annually if cannabis businesses are legalized. APPROVED