The Hollister City Council focused on cannabis operations once again as elected officials on Monday enacted an urgency ordinance that prohibits recreational cannabis business operations within city limits for a period of time.
City leaders also approved a manufacturing permit for a medical cannabis business on Industrial Drive and denied the appeal of a dispensary applicant who failed to receive a permit from the council in September.
Urgency ordinance
The city council unanimously approved an urgency ordinance that prohibits cultivation, processing, manufacturing, distribution, testing and sale of non-medical cannabis in the City of Hollister.
The urgency ordinance is valid for 45 days.
“Staff will be coming back to you either with findings to continue this particular ordinance or the real goal here is to provide you with enough information for you to adopt a permanent ordinance relating to the adult use of cannabis,” City Manager Bill Avera told the council.
The city council approved a medical cannabis ordinance in December 2016. Since then, the city has approved two medical dispensaries within city limits, as well as a multitude of cultivation, manufacturing and distribution businesses.
Residents and local cannabis businesses turned out at the Monday night meeting to voice their opinions on the urgency ordinance.
“I’m really here tonight just to ask you to reconsider this topic in the near future, at least on the non-dispensary segments of the industry,” said Sal Palma of Hollister Holistics, a local cannabis business that holds multiple use permits for cultivation and manufacturing. “Based on the state’s final regulation there’s really little to no incentive for consumers over the age of 21 to continue to, on an annual basis, pay for a doctor’s recommendation for medical cannabis. That being the case, the medical market will likely be less than five percent of the overall cannabis market.”
Palma said the result would be limited tax dollars to the city and jobs in the community.
“I ask that you bring this back and reconsider in the near future,” he said.
John Kolodinski of High Class Distribution and YHL, Inc. echoed comments about the financial impact on local cannabis operations.
“If we’re restricted as a producer to only work in the medical market, that would affect our ability to generate revenue,” Kolodinski said. “We hope you consider the implications of restricting our operation.”
The urgency ordinance had support from numerous residents, including Steve Becerra.
“They came to you before and said they wanted to provide medicine for people and tonight we’re seeing a different shirt,” Becerra said. “Tonight we’re seeing what it’s really about in the future: recreational marijuana.”
Cannabis comes to Industrial Drive
Medical cannabis business Euphoric Life, Inc. received a permit to operate a manufacturing facility at 807 Industrial Drive, but relinquished a cultivation permit at the same location after public outcry over the location.
The business will manufacture transdermal, adhesive pain patches that utilize cannabidiol, or CBD, a cannabis compound with health benefits that doesn’t get the user high as is the case with tetrahydrocannabinol, or THC.
Additionally, the location was owned and recently sold by a trust where a member of Vice Mayor Karson Klauer’s family is a beneficiary.
Klauer recused himself from the item.
Residents came to speak out against the proposed location for Euphoric Life at Monday night’s meeting.
“I just want to reiterate again that we still have children, we still have families and we still have been there in that facility for 25 years,” said Lisa Rovella of Rovella’s Gym. “So we’ve built our business, we’ve gone through all of the things we needed to go through to keep our business and to accommodate the healthy lifestyle. We have to fight again to remain a healthy choice in our community.”
In August, the city council denied three cannabis permit applications from Layla’s Landing, who intended to operate at 817 Industrial Drive mere feet away from Euphoric Life’s location. The permit denial came after members of the public raised concern over the site’s proximity to places where youth gather, such as Crossfit San Benito and Rovella’s Gym.
Resident Sue Whitehead said she was “strongly” opposed to the 807 Industrial Drive address.
“We already turned down an application for the building next door,” Whitehead said. “There are too many children.”
Euphoric Life Owner Dr. Ahmad Rafii, a doctor of chiropractic medicine for over 25 years, said he attended the August city council meeting where the initial uproar over 817 Industrial Drive occurred. After some questions from the council, Rafii said he would be willing to defer a cultivation permit and just stick with a manufacturing permit.
Pinnacle Strategy President Victor Gomez, speaking as a representative for Euphoric Life, argued in favor of allowing cannabis manufacturing facilities on Industrial Drive.
“When it comes to manufacturing, the question about location is over,” Gomez said. “The city council adopted an ordinance that included Industrial Drive. The argument whether this is a good location for cannabis or not is really irrelevant, because the council already adopted and said Industrial Drive is going to be cannabis-friendly. Even with the investments that have been made, my client is willing to defer the cultivation component, but we believe that the manufacturing component is 100 percent consistent with the industrial zoning use and also the cannabis zoning use as well.”
The medical cannabis business ended up receiving a manufacturing permit with a 3-1 vote. Mayor Velazquez was the sole dissenter.
Haven denied dispensary permit
Local cannabis business hopeful Haven Dispensary failed to receive a dispensary permit from the Hollister City Council after an appeal hearing at Monday night’s meeting.
“I’m here tonight for Haven’s final appeal for a medical cannabis dispensary permit in the City of Hollister,” Executive Director Taylor Rodrigues said, who’s been appealing the initial permit denial since September. “Mr. Mayor, many times over the last two years while working through the cannabis ordinance and regulations, you’ve said we need to take our time and do it right. The information I have to share with the council should show that while we took our time, unfortunately things were not done right.”
Rodrigues said that Monterey Bay Alternative Medicine, the recipient of the city’s second and final cannabis dispensary spot, was awarded a permit based on an incomplete application. He said there were numerous errors in the application.
“In a competitive application process that myself and others paid over $7,000 to participate in, considering an application with so many missing pieces is unacceptable, especially when the law expressly prohibits it,” Rodrigues said.
In the end, the decision appeared to come down to location. The proposed Haven Dispensary site is located at 191 San Felipe Road near the McDonald’s Restaurant. Residents drew issue with the fact that youth gather in the area.
Councilman Ray Friend agreed with residents that the location wasn’t right.
“That would be my reason for denying approval,” Friend said.
Friend made a motion to deny the appeal, which carried 3-0.
Vice Mayor Klauer and Councilman Jim Gillio recused themselves from the public hearing due to potential or perceived conflicts of interest relating to the first round of cannabis applicants, of which Haven was part of.
Additionally, Hollister City Attorney Soren Diaz recused himself because of his relation to JRG Attorneys at Law, formerly L+G. Despite being an independent contractor with JRG, the law firm has represented cannabis applicants in the city. Diaz has repeatedly stated that he hasn’t represented cannabis applicants.
