Merced ‘dream’ spot for pot retail

By JONATHAN WHITAKER
April 20, 2017

A consultant tasked with setting up how medical marijuana dispensary permits will be issued in Merced pointed out this week that the city is in a “dream” location to profit from cannabis outlets and related industries — especially in the short term.
“There is no dispensary that is [currently] legal between Sacramento and near Bakersfield,” Neil Hall of SCI Consulting Group told the Merced City Council during a presentation on Monday night. “So you are going to see probably a bit more revenue than we would normally project simply because you are right on the 99 corridor … Now Coalinga recently approved a dispensary so if you are going down I-5 that might be the stop. But for Highway 99, you are poised to be in a premium location. This is going to be kinda of a dream for a consultant to come in and do implementation mainly because your revenues are probably going to be really high to start with.”
The City Council paved the way for four medical marijuana dispensaries and indoor cultivation last summer. But in November, California voters approved Proposition 64, which legalized recreational marijuana use.
When considering revenue numbers of “recreational” use, and the city’s population and location, Hall said Merced could make anywhere from 800,000 to $1.6 million a year in marijuana taxes. He added, however, that fees and taxes could change significantly as other cities and counties enact regulations that allow cannabis.
Prop. 64 — or the Adult Use Of Marijuana Act (AUMA) — allows for a state excise tax of 15 percent on medical and recreational product. Local tax estimates fluctuate greatly, from 5 percent to 20 percent, but Hall recommended that Merced start with a relatively low tax rate to help fledgling dispensaries, and fight competition from the black market.
“You want these people to be in place as long as possible as long as they’re following the law,” he said, adding that dispensaries will be facing various permit fees.
Most of the money to be made from cannabis is in retail, cultivation and manufacturing, with support activities that include testing, distribution and transportation. There are a wide variety of products for consumption, including smoking paraphernalia, vaping tools, drinks, edibles and topical creams.

Pathway To Licences
The following is a projected timeline put together by a SCI Consulting for the City Hall development of a process for the Merced’s issuance of medical marijuana licenses to 4 businesses. Experts are suggesting dozens of firms will be vying for the licenses.

April / May: Possible Field Trip to Harborside — testing lab and nursery.
April 25: Initial outreach materials, FAQs to the City.
May 9: Stakeholder/community meeting
June 1: Draft CUP plan, review regulatory fees, ordinance.
July 10: Stakeholder/public meeting
Aug. 7: Set dates for public hearings
Aug. 15: Application plan for city review
Aug. 21: 1st reading - public meeting
Sept. 5: 2nd reading - public meeting
Sept. 6: Application plan approved by city
Oct. 1: Open pre-registration
Oct. 15: Applications are available.
Dec. 18: Issuance of all four licenses.

HUD funding
The Merced City Council on Monday night adopted a $5.4 million budget of mostly federal funds that make up the Department of Housing and Urban Development 2017 Annual Action Plan.
The overall goal is to use funding to provide decent housing, suitable living environments, and expand economic opportunities in the community.
Local projects funded in the approved plan include The Gateway Terrace II housing project, expected to support veterans, among others, ($1.9 million); the Homeowner Rehabilitation Program ($200,000); and two capital improvement projects: 10 ADA ramps along G Street, from Childs to 13th, and sidewalks and bike lanes along Motel Drive ($239,000).
Community Block Grant Funding for local community service projects made up only $50,000 of the draft HUD proposal from staff, but the bids were competitive as always.
In a compromise between city leaders and staff members (who promised they can modify some building estimates on the HUD capital improvements), $20,000 was added to the community service section for a total of $70,000.
Funding was approved for the following service projects: Valley Crisis Center, “Employment Readiness”; Healthy House, “One Stop Homeless Project” case management; Kiwanis Club of Greater Merced, “Kiddieland Safety and Security”; Merced Rescue Mission, “Warming Center”; and Symple Equation, “Youth I Can” project.

A Tribute To Marci
Finally, city leaders recognized the late Marci Stenberg — a longtime Merced Sun-Star photographer known for her love of children — by naming the splash pad at Stephen Leonard Park in her honor.
The distinction was made after a Selection Committee held a public hearing on the proposed name.
Stenberg was the overwhelming favorite for the honor.
The effort began with current and former Sun-Star employees, and members of the local ABC30 news team.
In a statement, former Sun-Star reporter/editor Victor Patton wrote: “The thousands of pictures she took through the years serve as a testament to the beauty of our city and the goodness of its citizens. I and several members of this community filed this application because Marci loved photographing the children of this community whenever she had a chance — from Veterans Day programs at elementary schools to holiday theatrical performances by our local high schools. … It would be fitting to name this splash pad after Marci so that her name and contributions will be remembered by Merced’s children and families for many years to come.”


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