Redding’s Rocky Road to Retail Pot Sales

Nothing comes easy, or quick, on Redding’s hazy path to recreational pot sales.

The latest setback, of sorts, came last week when City Manager Barry Tippin postponed announcing the first applicants accepted for tentative approval to begin operating retail marijuana shops.

The city had hoped to release the names on Thursday. In a press release, Tippin said the selection process has been delayed for up to a month. He cited the complexity of Redding’s retail pot ordinance, the number of proposals (18) and their complexity. Many of the proposals were in excess of 200 pages each.

“We received many quality proposals, and City staff and I are diligently reviewing and discussing the merits of each with the intent of selecting the proposals that best reflect what the City is looking for in this new retail venture,” Tippin said. “We apologize to the applicants who are eagerly awaiting the conclusion of this process in order to begin with their businesses.”

The Shasta County Board of Supervisors in November voted to prohibit all commercial cannabis activity in the unincorporated areas of the county. The recreational use of marijuana became legal in November 2016 when California voters approved Prop 64, but commercial sales, cultivation and manufacturing remain subject to local government control.

It’s not cheap

Under terms of the city’s retail pot ordinance, the number of retail dispensaries is limited to 10. Persons interested in opening a dispensary had to pay a $5,000 application fee. Those selected by the city’s seven-member committee will then need approval from the Development Services Department.

Once clear of those two hurdles, the aspiring marijuana merchants will have to pay the city a $27,900 fee (and an annual renewal fee of $2,550). A state license, at a cool $36,000, also will be required.

The Redding City Council on Tuesday is expected to approve a retail and cannabis cultivation/manufacturing tax measure for the Nov. 6 general election. The general tax measure, which would need a simple majority to pass, would impose a tax up to 10 percent on pot sales and a tax of up to $25 per square foot of area dedicated to cultivation, processing, manufacture, testing, storage or delivery of cannabis products.  The city is recommending the tax start at 5 percent for retail and $3 a square foot for cultivation, processing and manufacture.

The city tax is expected to add about $750,000 a year to the general fund and could be spent on police and fire services.

That tax would be on top of the 15 percent excise tax California already has in place. The state also taxes cultivators at a rate of $9.25 per ounce of bud and $2.75 per ounce of leaves.

Shasta Lake issues

The city of Shasta Lake’s ambitious efforts to court the cannabis industry—including the rezoning of the Shasta Gateway Industrial Park to make it pot-friendly—recently earned a stinging rebuke from the Shasta County Grand Jury.

“In its rush to become the first Shasta County city to permit recreational cannabis businesses, the City of Shasta Lake ineffectively planned for the increase of cannabis businesses in the City. This resulted in multiple unexpected changes in planning and permitting procedures based upon infrastructure demands, which was exacerbated when the City chose to zone the Shasta Gateway Industrial Park for cannabis-related businesses,” says the Grand Jury report titled “Green Rush … Up in Smoke?”

Shasta Lake voters last year approved Measure A, a new cannabis tax that continues the 6 percent tax on sales at the city’s three marijuana collectives while reaching out to tax the commercial grows and processing plants proposed for the Shasta Gateway Industrial Park.

The measure’s proceeds—estimated to be from $400,000 to $700,000 annually within five years—will be earmarked for expanded law enforcement and code enforcement, City Manager John Duckett said.

Not so fast, said the Grand Jury, which recommended all development should stop in the industrial park until the city builds a secondary access road. In addition, the city should beef up code enforcement staffing and create “safe and effective methods of collecting and transporting the cash it collects.”

The city has yet to formally reply to the Grand Jury’s recommendations.

Last year, Duckett said he’s well aware that not everybody is in favor of the cannabis industry, and that’s why the city is restricting all commercial aspects to the industrial park and keeping all operations indoors to minimize visual and odor issues. The Measure A tax, he said, is a way to ensure the community benefits from the cannabis industry.

Jon Lewis

Jon Lewis is a freelance writer living in Redding. He has more than 30 years experience writing for newspapers and magazines. Contact him at jonpaullewis@gmail.com.

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