 Hi there, we're here at Davis Media Access with another episode of The City Considerers. I'm Autumn LeBae Renaud and I'm your host for this show, which we record once a month to find out what's going on with our city council and what issues they are considering. So today we're talking about cannabis in Davis. After the passage of Prop 64 last November in California, cities were suddenly challenged with a slew, developing a slew of regulations on everything from land use policy to licensing and production. There's been a lot going on. That's a very complicated issue. And here to discuss today is Davis City Council member, Will Arnold. Thanks for joining us. Thank you, Autumn. It's a pleasure to be here. So every time I talk to someone from the council, what I hear is I never realize how complicated this was. And it crosses lines of business, personal use, taxation, I mean just everything. Yeah, we are learning very quickly. It's a steep learning curve and the state regulations are continue to be in flux. So as we learn, there's new information every day. Right. So I know that you were mentioning, Davis has a long time ban on dispensaries, marijuana dispensaries, but in May the council approved 50, the licensing for some production facilities in Davis. Can we talk about that for a minute? Sure. So in 1996, more than 20 years ago, the state of California passed legalization of cannabis for medical use. But still, the city of Davis has a blanket ban on dispensaries. And as you mentioned up until recently, it was a blanket ban on any commercial use of cannabis. And there were some actions taken last year before I was on the council. One was to allow for personal in-home cultivation or growing of cannabis for personal medical use. And then what was put on the ballot last year was a measure in anticipation of the voters in November passing personal use, adult use of cannabis, a measure to pass a tax in Davis. And so the voters of Davis in 2016 actually had two opportunities to vote on cannabis related ballot measures, the one I mentioned in June, which was a tax measure and it passed in the city with more than 78% of the vote. And that's measure C. And that's measure C. And then of course in November, Prop 64, the Adult Use of Marijuana Act passed statewide and passed in the city of Davis with about 68% of the vote. Right, and just to be clear as we move forward, there's medical marijuana and then there's what was approved for recreational use and that's what we're focusing on today is the rulings that have come about primarily related to the passage of Prop 64. Correct. And so since November, the city has taken up a number of issues regarding the legalization of cannabis. We allowed for outdoor growing for personal use. And that was huge for individuals. Few places have done that. Very few places have done that. We just recently passed an ordinance allowing for certain types of businesses, specifically not retail businesses. So these would be production type businesses like manufacturing, distribution, research and development and testing. And the idea is that this may be a very good fit for the city of Davis with our history and propensity for agricultural research. And the idea being that those are sort of out on the Mesa Ranch Curve area, the outside of business. Sure, or down on Second Street. I mean they'll most likely be in industrial type settings and part of the reason why we took that up more quickly than we have the dispensary issue is because of a belief that I share that these will have insignificant community impacts. I mean you won't see it or you'll see it as a warehouse and you won't quite know what's going on there. We're not dealing with a lot of foot traffic. We're not dealing with foot traffic or anything where folks are coming in and buying something. I mean it's just not visible. What's the tenor around all of this in the community? I know there have been some public forums, Davis Media Access recorded one or two of them. What are you hearing from the community? Everything thus far has been overwhelmingly positive. I mentioned the two elections that were held in 2016. Those are about as official as it gets as a poll and both, like I said, passed overwhelmingly. There's also been a number of unofficial polls through different media sources like the City of Davis' website, the social media next door. All of those were taken and were also overwhelmingly in favor of legalization. And then we've had a number of forums at which point the folks who came were able to render their opinion and there were, I wouldn't exactly call them votes but there was opinions were sort of put on a spectrum and it was pretty heavily in favor of the city moving toward decriminalization. So you mentioned when you walked in that there was a meeting just last night. Where are we headed next with all of this? So we took up three distinct issues last night. The first was to create the municipal code governing our policy regarding cannabis because as we mentioned, thus far the City of Davis has had a blanket ban. So other than stating that in our municipal code, there wasn't much nuance there. So we created the code which included such things as licensing and other regulations relating to business uses of cannabis. We also took up the issue of taxation. The measure that the voters passed last year allowed for up to 10% of gross receipts to be taxed. But you can set different rates for different types of businesses and so we set different rates last night. And then critically, the third piece that we took up last night was the very beginning of the discussion at the city council level as to what to do about dispensaries. And that's been the hot issue. And that is the hot issue because that's where the rubber meets the road. That's where most folks are going to see it and those who will are going to interact with it. And that's where most folks, when they think about legalizing commercial use and commercial activities regarding cannabis, that's what they think of is a dispensary. Right, so is there friction? Are there opposing viewpoints there? Those who want it, a dispensary downtown, for example, those who don't. Sure, so we did not receive any public comment last night in opposition to, either in general or specifically, nor have we received any emails or phone calls or anything, at least I haven't, of folks who were opposed. And I don't think we've been doing this in the cover of darkness. No, no, it's pretty well out there. This has been pretty well reported on by you, by other media in town, for months, if not more. And so I don't think anyone's surprised by what's going on. And like I said, the response thus far has been positive. In fact, I must say pretty surprised by that. So based on what you're saying, is it likely we'll see dispensaries green-lighted as we move ahead? So in the meeting last night, staff recommended that we do allow for a small number of brick-and-mortar dispensaries. The number that was recommended by our staff was four. And in the discussion last night, there was not a sense that anyone on the council wanted that number to be zero. And then there's, so to answer your question, I think by a year from now, there will likely be at least one cannabis dispensary in operation in the city of Davis. So now I'm also talking, you're not only a council member, but you're a business owner, mother and baby source downtown with your wife, Nicole. So thinking of this issue through that lens, what kind of financial benefits in terms of taxation? So what impact would Measure C have on generating revenue for the city? So what we decided last night regarding taxation is to tax dispensaries at that full 10%. That is in addition to our eight and a quarter percent sales tax, that is in addition to statewide taxes that are levied specific to cannabis businesses. So the number that's out there for the true tax number for these businesses is somewhere in the neighborhood of one third, 33% is the tax. So the city potentially could, we won't be seeing all of that certainly, much of that is statewide, but we could potentially see a lot in the way of tax revenue from this industry. And I sort of anticipated that answer about how you broke out the taxes because any substance that's been legalized and is therefore regulated has a lot. As we know, cigarettes, alcohol has a lot of taxes. So someone has to be pretty motivated, but there's also probably a pretty substantial profit margin for coming in and being certainly the first dispensary to break that ground in Davis. So I said we didn't have any public comment opposed last night. That's not to say we didn't have any public comment. And there were a number of folks in the audience last night who are either advocates or in the industry. So these are folks that own businesses elsewhere who want to open up shop in Davis. Both folks who do the research development production side as well as people who are interested in opening up dispensaries. Some of these are local folks who don't obviously currently operate a dispensary, but who are intrigued by the opportunity. But also a number of regional dispensary operators from Sacramento and elsewhere who are interested in expanding into Davis. Great. So what comes next at the council level? So this dispensary discussion is going to be on the front burner for a while. There's a number of issues to discuss. We really only kicked it off last night. There was no official decision made last night with regard to dispensaries. And that was not, it was not on the agenda for us to make any decisions. This was just the beginning of a long conversation. But we need to decide certainly how many we think are appropriate in the city, where, and if not specifically where, then under what type of zoning and what type of other considerations regarding geography are made. For example, the state recommends a 600 foot barrier between any school to a dispensary. So that's something that we're obviously taken under consideration. And so there's a map that the city has produced that sort of shows what those borders look like. And so where then our options would be to open up this type of business. And then critically and possibly what would be the most, I'm not sure contentious is the right word, but because there are a great number of interested parties in opening up a dispensary, and because we plan to limit the number, at least at first, that we allow to open, there will be a pretty healthy competition. Almost like an RFP process. Almost like an RFP process. In fact, that was one of the options that was in front of us last night was to do an RFP process. There's also sort of an open period where folks can apply. And of course, we dig much deeper than that as to what are the criteria, what information are we asking from folks, what level of investment do they need to have already made? For example, do they already need to have a location secured, things like that. So these are all issues of continued discussion and we only scratched the surface of them last night. Will you come back and update us in a couple of months and let us know how things are going? Certainly. All right. Our time is actually up, so I'm gonna wrap up. I wanna thank Council Member Will Arnold for coming in and joining us today. We've been chatting about the ever-changing rules and regulations related to cannabis and Davis. And I can only say, I mean, the ship has clearly sailed on this issue. We're seeing state after state begin to legalize. So Davis in true form is kind of out there and developing unique policies. We go along. Thanks for your work on this. It's my pleasure and thank you for having me tonight. My pleasure. So you can find out more about the City Council upcoming agendas and long-range planning at cityofdavis.org. There's a section there for the City Council. You can also watch Council Meetings Live on the Tuesdays when they meet on Comcast Channel 16 here in Davis, which is run by the City of Davis. I'm Audemars Bay-Runeau and thanks for tuning in.