City sets cannabis appeals for October

Hollister gives canna-preneurs another chance at doing business in the city

Cannabis
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The pot leaf is a four-leaf clover for cannabis entrepreneurs who want to do business in Hollister.

City policymakers Tuesday voted to hear numerous medical cannabis applicants at a future meeting in October and to direct city staff to begin recruiting for pot-related personnel.

Not all gratification will be delayed, however.

Traditional Roots got the go-ahead to set up a cannabis cultivation and manufacturing facility in the city. The Chualar-based applicant originally had a dispensary application as well, but pulled it from further consideration.

On October 2, Higher Level of Care, Haven, Monterey Bay Alternative Medicine and Layla’s Landing will appeal to the city council for a shot at the city’s last retail pot spot.

The council already approved local cannabis business Purple Cross Rx, known for brands like California Finest, to operate a medical dispensary in city limits. Only two dispensaries are allowed to open in Hollister.

Other cannabis applicants to receive appeal hearings in October include FBT Jordan, Inc. and Playa Breeze, who both want to operate manufacturing and cultivation operations at 817 Industrial Drive. Layla’s Landing would also operate at that address.

The location, a newly renovated warehouse listed by numerous cannabis applicants, has drawn ire from some residents who say the building is too close to where children congregate such as Rovella’s Gym and Crossfit San Benito.

Signaling the city is serious about the business of pot, the council authorized city staff to write job descriptions and organize recruitment for new cannabis-focused personnel.

The council looks to hire a cannabis affairs manager, an additional police officer and sergeant, an IT analyst, an account technician and an additional deputy fire marshal.

“In addition to that, I’d like to be able to have some money set aside for our financial auditors to do forensic auditing that may be required if we run into an issue with a potential sales tax, etc. that may be occurring that’s not being documented appropriately,” City Manager Bill Avera said.

While the initial cost of adding those positions to the city could be around $824,000,

Avera said that’s probably on the high end of the spectrum and the hires would give the city the necessary manpower to effectively manage the fledgling local industry.

“Those costs are offset, at least right now,” Avera explained. “The revenue you’ll be generating just from cultivation alone the council has already approved is about $1.161 million. That doesn’t count any of the manufacturing sales and dispensary sales.”

Mayor Velazquez said the fees and licensing should cover upfront costs, not the taxes received afterwards. He cited San Jose, which has a license fee designed to combat unforeseen costs.

Hollister’s current cannabis fee structure consists of an application fee of $7,492 and an annual fee of $7 per square foot, which only applies to medical cannabis cultivation activities. There is also a five percent sales tax that is charged when cannabis suppliers sell to each other to create other cannabis products like edibles or topicals. There is not a city license fee.

A fee is expected to be charged at the state level once cannabis recreational licenses begin to be issued next year, but it’s uncertain what that will be.

Locals said the mayor’s comparison of Hollister to San Jose is unfair.

“I don’t know what that fee is going to be, but I just heard from every speaker here that yes they’re paying license fees in different communities and perhaps the state’s going to even charge them $50,000,” Velazquez said. “I want to make sure we’re covering all of our costs up front. I’m asking that as we move forward, that we look into making sure we come up with the right annual license fee.”

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