Pot industry weighs in on Arvin’s cannabis operation requirements

The City of Arvin wanted to get feedback from the cannabis industry regarding its ordinance allowing commercial cultivation and they certainly got it.

Members of the industry packed City Hall for a workshop on Wednesday in which city staff provided information on the requirements the city has drafted to govern the cultivation of marijuana in the city. Attendees expressed several concerns regarding size requirements, fees, hours of operation and more.

“We realize that many of you are anxious to get started, but what we’re trying to do is give the industry an opportunity to provide their input before we move forward,” City Manager Alfonso Noyola told the group. “We want to do this in a very responsible way that protects the health, welfare and safety of our community.”

The first draft of the city’s ordinance was approved last fall and allows only indoor commercial cannabis cultivation, manufacturing, testing and distribution. No retail sales are allowed in the city, but the ordinance does allow businesses to sell the product elsewhere.

While the city may have been expecting moderate to large growers to make up the majority of operations, many people who attended the meeting said they are more interested in micro-businesses, such as a greenhouse.

When city staff mentioned that there is a 5,000-square-foot minimum requirement, several attendees said they wouldn’t be able to meet the criteria and made suggestions to cut the requirement in half to 2,500 square feet.

“The small mom-and-pops, the small people in the room are trying to enter this community and stay in this business are concerned about being pushed out by minimums,” one person said.

When asked by city staff how many people were interested in micro-licenses, about half of the roughly 30-member audience raised their hands.

“That gives us a better idea of what the market demand is as well as what the potential is,” City Attorney Shannon Chaffin said.

During the workshop, the city outlined what fees would be charged, such as a $4,000 initial permit processing fee and a $26,125 fee for issuance of the permit. The businesses would also have to pay the second fee each year they renew their permit.

The city said there are currently no plans to tax the businesses or their products. In place of that, the city has proposed a developer agreement that would charge businesses $15 per square foot of building space and 10 percent of their gross receipts when it comes to both testing and manufacturing, on top of the permitting fees.

The city said the money would go toward community benefits such as new parks, community pool restoration, after-school programs, a sports complex and more.

Bakersfield resident Gabriel Godinez said the city should opt to scale the cost per square foot to make it easier on businesses, such as charging $5 per square foot for the first year or two and then increasing it each year as the businesses become more established and revenue comes in.

“You’re looking at substantial capital expenditures just to get a facility off the ground, and then you’re adding this fee on top of that,” he said. “If you would consider scaling it, I think it would help get things going more quickly.”

People also expressed concerns regarding the gross receipts requirements, saying they don’t take into account the fact that operation costs could go up, making 10 percent of gross more like 20 or 30 percent of a business’ overall net gain.

Some attendees also were concerned about the restrictions on the hours of operation. The existing ordinance sets the hours as 8 a.m. to 7 p.m. Monday through Sunday. However, people said that cultivation and monitoring is needed 24 hours a day and it would be inefficient to stop it at night.

Robert Franco, a Bakersfield man who is interested in operating a cannabis business in Arvin, said he felt the workshop was productive and a good start to getting necessary changes made to the ordinance.

“The city doesn’t know how the industry works or what is necessary, but by doing the workshop, hopefully they understand a little bit more,” he said. “It seemed like they were going for a one-size-fits-all approach — which would be easier — but that’s not going to work. This industry is too complex for that. However, I see positive change coming.”

City staff said they will take the feedback from the industry and make changes to the ordinance. A revised ordinance would then go up in front of the Planning Commission, which would then have to recommend it to the City Council.

The city will be able to begin accepting applications 30 days after approval, Noyola said. If it doesn’t take very long to make changes to the ordinance, the city could start accepting applications as soon as this summer.

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