The Winters City Council on Feb. 16 will consider whether to start the process of regulating commercial cannabis in the city.
The council will also be receiving the 2019-2020 Comprehensive Annual Financial Report (CAFR), information regarding unfunded employee-related liabilities, an investment earnings report and the city’s treasurer’s report for December 2020.
Commercial cannabis businesses have long been prohibited by a city ordinance. But the Winters Downtown Business Association and the Winters District Chamber of Commerce sent a letter dated Jan. 14 requesting that the city reevaluate that ordinance. The letter argues that cannabis-based businesses could benefit Winters by increasing city revenue, creating jobs and diversifying local businesses. Additionally, the letter says, having cannabis businesses in town would reduce vehicle emissions from cannabis consumers who live in the city and currently travel to buy it elsewhere.
Before cannabis-based businesses can arrive in town, however, the city needs to develop regulations that would be voted on by the city council in the future. According to the staff report, the city would need to hire a consultant to coordinate development of these regulations, and putting them together would take six months to a year, at a cost of $40,000 to $80,000 based on initial conversations city staff had with planning industry professionals, according to the staff report.
There’s no budget available in the current fiscal year to cover the cost, so funds would need to be included in the next fiscal year budget, which the council will be considering and approving in June. The staff report notes that the city could consider accepting contributions from cannabis industry advocates or businesses to offset these costs.
The estimated cost also doesn’t include environmental review, which is currently waived by the state for cannabis activities until June 30, 2021. Environmental review would add both time and cost to the process.
The staff report notes that revenue gained by the city from cannabis-based businesses would depend on the specific process of exacting revenue. But if a dispensary generated an annual revenue of $250,000 — the low end of dispensary profits in Davis — the costs of developing the regulations would be recovered in the first year of operation, according to the staff report. A more accurate estimation of revenues would be developed as part of finalizing the draft regulations.
City staff is asking the council to consider if there’s an interest in developing regulations for one or more cannabis license types, such as retail, distribution, testing or manufacturing, according to the staff report. If so, city staff would like to know what types are a priority.
Staff also wants to know if the council would prefer to allow cannabis industry contributions to fund development of those regulations, or to direct staff to budget $80,000 for those regulations in next year’s budget. And staff wants to know if the council would like additional community input through online surveys before providing further direction.
