Merced considers changes to strategy for marijuana industry

July 13, 2017

The biggest understatement of the most recent meeting of the Merced City Council came when first-year council member Anthony Levi Martinez said: “We as a city, as a people, were in a different time … It was only a year ago, but [there was] a lot of uncertainty …”
Martinez was presumably talking about last July when a split City Council gave the green light to permit four medical marijuana dispensaries to operate in the city, along with limited indoor plants for patients.
The city — suddenly in new territory — went on to hire a consultant to create a process for awarding the permits.
Since then, California voters went all-in with Prop. 64, making recreational use of marijuana legal for ALL adults 21 and over. In November, local voters also elected three new council members.
Fast forward to just last month, and the state Legislature passed SB94, which integrates the rules for both medicinal cannabis and adult-use cannabis.
Merced Planning Commissioner Bill Baker called this new blend with profitable recreational pot a “game changer."
He’s right, but meanwhile, the Merced City Council is still operating under last year’s ordinance, and the “old” permitting goal that was set for the end of 2017.
The prevailing thought now seems to be that at least some changes need to be made to the city’s strategy to incorporate all the new related activity in this ever-expanding industry. Also, it would be timely and cost effective to update a forward-thinking plan while the city has a paid consultant on hand.
Based on leadership comments at last week's meeting, we know the consultant — Neil Hall of the Fairfield-based SCI Consulting Group — has been tasked with formulating a special permit process for medical marijuana dispensaries that will likely be merit-based with a lottery option for close decisions on who gets to set up shop as soon as next spring.
Expanding the number of dispensaries, adding a recreational retail component to sites, allowing designated areas for consumption, and opening up zoning from commercial office (medical) to general commercial or busy retail zones are new topics under consideration.
While commercial cultivation within city limits was frowned upon, leaders did show some support for distribution and testing centers that would potentially link Merced to a statewide marijuana trucking and shipping network.
Individual perspectives proved interesting.
The oldest member of the council, Michael Belluomini, reminded colleagues that the city’s previous priority was to make sure seriously ill people get the medicine they need. He urged that things like cannabis distribution centers should be dealt with as a separate issue, "as to not bog down" the medical issue.
Martinez, the youngest council member in his early 30s, said it’s time to embrace the new industry as a whole.
“To carve out one sub-section and say let’s do this for now, and get to the others later, kinda seems like we are selling ourselves short,” he said in a booming voice. “Why handcuff this any further? … as far as allowing it to be accessible and giving these businesses a chance … to be a part of Merced, and not be overly regulated, or treated as an afterthought, as something to be put down, because we are worried something bad could happen. I think we are kind of beyond that now, and we are taking a serious look at how we can really make this work for us in a sociable and civilized manner.”
In the audience were interested parties and potential owners of dispensaries in Merced.
People like Susan Bouscaren, who lives just outside the city, and who has been operating a medical marijuana delivery service for sick people throughout the county for the past four years.
It’s called Jacks Greenhouse Association — a co-op that utilizes local product that’s legally grown in small batches by various members.
Bouscaren told the Times she is upbeat about the city process as a whole, and would love to take her small business — with only a few people on staff — to a commercial location inside the city.
“I cater to mostly seniors and disabled people,” she said. “I deliver the buds, cartridges, the oils, the hash, the edibles, and topical creams.”
Marijuana can be used to treat cancer, anorexia, AIDS, chronic pain, arthritis, migraines, glaucoma, insomnia, PMS, post traumatic stress, depression and substance abuse, among other illnesses that require relief.
Bouscaren said many people may not realize that her small business faces high operational costs and a lot of taxes with few deductions.
“My goal this whole time was to do a dispensary — and do it right,” she said. “I went out seeking support form the United Food & Commercial Workers in Sacramento. I knew that checks and balances would be put out by the union. I think it’s very important in a community like ours that we are going to do something that will set a better example … and that people aren’t scared and end up saying that they wished it would never had happened here.”
Like many in the business, Bouscaren would prefer to operate in a retail office space, with the option of selling recreational product while incorporating the widely approved industry model of the Harborside company in Oakland. Harborside features a professional looking exterior, a secure check-in entrance, and a separate, clean and spacious shopping room where customers can comfortably learn about the various marijuana products.
She hopes the council will consider centrally located areas — such as in or near downtown Merced — because of the diversity of people who live and shop there. “It’s important for my customers to feel comfortable in a welcoming neighborhood place,” she said.
Bouscaren said the four approved dispensaries “is a good number to start with” — though there could be a few more. She pointed out that Los Banos and Atwater are also talking about opening dispensaries.
“If we start with too many, we will have some go out of business,” Bouscaren warned. “It will be expensive enough to keep the startups running.”
Distribution centers and cultivation areas — not necessarily big in size — would also benefit Merced, she said.
“They are worried up there in Humboldt and Mendocino,” she said. “They get good quality because of the cool nights, but we also get that coming out of the Sierra Nevada, near the foothills.”
One thing Bouscaren says Merced is not ready for — at least not yet — are social clubs that offer on-site consumption. She says that’s something the city doesn’t have to rush into as they approve the dispensaries. She also points out that law enforcement authorities are still perfecting new tests to fairly and accurately enforce driving under the influence laws. New Workers Comp. testing is also in play.
By the end of the year, Bouscaren said she expects up to 50 entrepreneurs will come out of the woodwork to apply for a dispensary permit.
“The lottery idea scares me because I’m putting everything I’ve worked for in the last four years against people who haven’t done anything before,” she said. “I’m facing spending a huge amount of money in the process … to try and compete.”
Last but not least, Bouscaren said she expects the new medical marijuana businesses will be willing to give back to the community with support of city-sponsored public programs.
It’s important that Merced residents see cannabis “in a positive light,” she said.

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