The process of introducing commercial cannabis activities in unincorporated San Benito County is moving forward, if a bit slowly. But progress is progress, and on Sept. 25 the San Benito County Board of Supervisors heard a presentation from Hdl Companies that laid out potential updates in policy along with an estimated final reading of legislation that will formally introduce commercial cannabis to the county on Nov. 20.
David McPherson, a consultant for Hdl Companies, said that on Oct. 17 changes to the plan will be submitted to the San Benito County Planning Commission. The program will continue to undergo revisions on Nov. 6, and come back for an expected final reading on Nov. 20.
“We’re not reinventing the wheel,” McPherson said. “The rates provided are realistic, and consistent with surrounding counties.”
Measure C, while not setting the exact tax rate, established a range for commercial cannabis taxes. The tax per square foot for cultivators will be between $3 and $17, and gross receipt taxes on cultivators will be 2 percent to 4 percent on distributors, 2.5 percent to 4 percent on manufacturers, and 2.5 percent to 5 percent on micro businesses.
The City of Hollister currently charges $7 per square foot and has a 5 percent tax on gross receipts in manufacturing and retail.
Anyone hoping for countywide dispensaries will be disappointed. Cannabis retail business—whether a dispensary, retail delivery (cannabis delivery for personal use), or retail as part of a micro business (a cannabis operation that involves cultivation, manufacturing and retail)—will remain prohibited.
The county’s cannabis industry will remain cultivation (growing), manufacturing (edibles), distribution or laboratory testing. On July 1, the state mandated that all cannabis sold legally must undergo testing for purity and potency.
Cannabis business applicants will also need to adhere to restrictions regarding location. All cannabis businesses must be more than 300 feet away from property boundary lines and 1,000 feet from any school, school bus stop, school evacuation site, church, park childcare center or youth-oriented facility.
Cannabis operations must be more than 400 feet away from any off-parcel residence if the business is located on a parcel that is 10 acres or less. Any cannabis business proposed for a plot of 10 acres or less must go through a hearing.
Each cannabis business must adhere to its classification permit, so cultivation businesses must engage only in cultivation. Cultivation business permits may not be issued in residential buildings,and the permits will lay out specific business practices.
Applicants may appeal these provisions with a written request to the county administrative officer. If the application is denied, the applicant may submit a written appeal to the clerk of the Board of Supervisors, which will be reviewed by the county supervisors.
San Benito County commercial cannabis permits are limited to indoor or mixed-light commercial cultivation (greenhouses). Other permit types will include manufacturing, micro businesses and testing labs. All permit holders need to get a cannabis business permit from the county and a valid California seller’s permit.
The San Benito County Administrative Office will oversee the Cannabis Business Regulatory Program. Their duties include creating application forms, conducting inspections, approving or denying applications, issuing, inspecting or revoking permits. The County Administrative Office will also communicate with the public about the number of permits accepted on the county’s website.
The proposed plan lays out various reasons why an application may be denied, including non-payment of fees, non-compliance with regulations regarding health, safety and morals, or if the applicant does not meet the minimum age requirement of 21.
The draft plans include a section that allows law enforcement to enter cannabis business facilities “from time to time unannounced,” during business hours for “making reasonable inspections to observe and enforce compliance.”