The Hollister City Council approved local medical cannabis business Purple Cross Rx to move forward in the dispensary permit process after a testy face-off between council members and Hollister Mayor Ignacio Velazquez.
After hearing presentations from six medical cannabis dispensary applicants, Velazquez said he had lingering concerns over the city’s medical cannabis ordinance that requires a 150-foot setback from residences.
The initial setback was 600 feet, but was changed during the months long deliberation process.
“I quite frankly don’t think we’re ready,” Velazquez said to a packed council chamber. “I think we have more work to do here. I think we need to step back and revise our ordinance so we get it right the first time. It won’t be perfect, but I see problems coming here that we need to address. We owe it to the public to get it right.”
When the council approved the citywide medical cannabis ordinance in December, the dispensary limit was capped at two facilities.
Velazquez said he couldn’t support either one of the staff-recommended dispensary applicants, Higher Level of Care, which operates a medical cannabis dispensary in Castroville, and Layla’s Landing.
The mayor did not like the Layla’s Landing proposed site at 817 Industrial Drive, a recently renovated warehouse that was listed by a number of cannabis business applicants that failed to move forward on Monday.
When the item was discussed at previous meetings, concerned members of the public said the building was too close to where children congregate, including Rovella’s Gym and Crossfit San Benito.
And while Higher Level of Care said their proposed site was 1,000 linear feet from sensitive areas, a term regularly used by the council to refer to residences, churches or schools, the item did not move forward for lack of a motion.
Velazquez’s actions upset Councilwoman Mickie Luna and Councilman Ray Friend and they were quick to speak out.
“I think that people have waited long enough,” Luna said. “We have studied long enough. We have actually gone out to other communities. We visited sites and I feel like we need to move on. We need to make a decision tonight and it’s unfortunate that we only have three people here that can vote.”
Vice Mayor Karson Klauer and Councilman Jim Gillio recused themselves from the dispensary vote due to conflicts of interest, leaving Velazquez, Luna and Friend as the only representatives able to vote.
A dispensary resolution required a unanimous 3-0 in order to pass.
Additionally, City Attorney Soren Diaz recused himself due to ties with local law firm L+G LLP, which represents some of the cannabis applicants.
Friend said it would be stupid for the council not to make a decision on the dispensary applicants.
“I don’t understand why you’re not ready to move,” Friend said to Velazquez. “I think you need to explain to the voters of the city why we’re going to spend all this money and not make a move.”
Velazquez said it was simple.
“We did have a good ordinance in place and it changed from 600 feet to 150 feet away from a residence,” Velazquez said. “That wasn’t alright with me then, it’s not alright with me now. I think it’s a mistake and we can do this right.”
After some back and forth discussion on the dais and with City Manager Bill Avera, Velazquez encouraged Luna to bring the ordinance back to council for an amendment. Friend was not in agreement.
“You’ve made a joke of this,” Friend told Velazquez. “You look like an idiot sitting up here.”
Luna also had enough.
“I will not bring this ordinance back,” Luna said. “If you want to turn everyone down tonight, then it’s your vote against us and everybody here. I’m not going to bring it back.”
In June, the city council failed to decide on two potential medical cannabis dispensaries due to a lack of votes, which led to the public hearing for cannabis applicants at Monday’s special meeting.
Later in the meeting, Velazquez intimated he would agree with the other two council members and support Purple Cross Rx for a medical cannabis dispensary permit. Friend made the motion and the vote passed unanimously.
Scott McPhail, owner of Purple Cross Rx, said he and his wife Kim were humbled and grateful for the opportunity to operate in Hollister.
“We want to say thank you to the Hollister City Council for voting unanimously to allow Purple Cross Rx dispensary to re-open in Hollister and we are thankful to our many supporters in San Benito County who spoke at public meetings and wrote letters on our behalf,” McPhail said in an email.
“We look forward to working with the city and our community to provide safe access to the highest quality Prop. 215 medical cannabis products. We are committed to providing funds and resources to give back to our community and support many of the nonprofits that serve the poor, the hungry, the homeless and at-risk youth in San Benito County.”
The city council also issued 11 permits for cultivation, manufacturing, distribution and lab testing of medical cannabis within city limits. Successful applicants include California Finest, a manufacturing firm owned by McPhail.
“These permits will enable Purple Cross Rx to invest in a new business, create jobs, patronize local construction trades, support local commerce and raise tax revenue in the City of Hollister,” McPhail said.
Other approved applicants include Hollister Holistics, LLXP Corporation, Pacific Organic Wellness, Agripharma Nursery and Agripharma Extraction, Lucid Analytics, High Class Distribution, JAM USA LLC and YHL Inc.
A number of successful applicants consisted of the same individuals, but under a different name.
As Hollister Holistics, Higher Level of Care received two permits for cultivation and manufacturing at two addresses: 1802 Shelton Drive and 1650 Lana Way behind the Shelton property.
The applicant stated there would be approximately 60,000 square feet of cultivation at the Shelton Drive address.
Lucid Analytics are the same applicants behind High Class Distribution, JAM USA LLC and YHL Inc.
“Clearly you guys are going to be the busiest people in San Benito County,” Velazquez said when the group returned to the podium for a third time.
While 11 permits were issued, the council chose not to issue permits to three applicants: Playa Breeze, FBT Jordan and Traditional Roots. Playa Breeze and FBT Jordan both applied for operations at 817 Industrial Drive.
Representing the applicants at the controversial address, attorney Todd Winter of Costa Mesa-based law firm Winter LLP told the city council that his clients purchased the building based on the current ordinance and the fact there wasn’t a cap on manufacturing and cultivation permits.
“I’m severely disappointed at what I’m seeing happening here at city council,” Winter said. “The purchase of this multi-million dollar building was based solely on your ordinance and the ability to do business in Hollister. The failure of the city council to approve these uses in Hollister at this location could prove to be severe consequences to the city.”
Ultimately, the council did not approve any dispensary, cultivation, manufacturing or distribution use at 817 Industrial Drive.
City Manager Avera explained that several more permit applications will be considered in the future.
“We have several more applications that have come in that are contemplating new development on vacant land and subdivisions of land,” Avera said by phone Tuesday. “That’s the next wave, which is coming hopefully in about a month. It’s more planning oriented, it’s not as simple as going into an existing building.”