A second round of development agreements with participants in the cannabis pilot program were approved by the Turlock City Council on Tuesday, furthering the process for two out-of-town dispensaries that hope to set up shop on Golden State Boulevard.

Development agreements, used in conjunction with conditional use permits, allow for the regulation of cannabis businesses by determining the standards and conditions that will govern development of the property. In terms of cannabis, development agreements between local jurisdictions and commercial cannabis properties typically include a “public benefit” amount, designed and intended to offset or mitigate any potential impacts of the project on the community.

On Tuesday the Council approved two development agreements: one with Evergreen Market, a company based out of Washington and another with Perfect Union, which currently operates four stores in both Sacramento and Marysville.  

“I know the decision to welcome cannabis into your community isn’t one any of you take lightly,” Evergreen Market co-founder Eric Gaston told the Council, mentioning that prior to his current role, he previously served as a prosecutor. “The decision to sell cannabis is not one I took lightly.”

Thanks to its current five dispensaries in the state of Washington, Evergreen reported more than $20 million in annual revenue and forecasts $40 million in 2020. In Turlock, the company expects to generate just over $4 million in revenue during the dispensary’s first year, with annual growth of 10 percent. Evergreen hopes to place its first California dispensary at 693 N. Golden State Blvd. in Turlock.

Under the approved development agreement, Evergreen will pay to the City a public benefit amount of no less than $25,000 per month or 5.25 percent of its gross receipts from its operations on a monthly basis. The minimum public benefit amount will increase by $5,000 annually throughout the five-year development agreement.

In addition, one percent of in-house sales, as well as a requested one percent donation from brands the dispensary works with, will be reinvested into local nonprofits that help with the City’s homelessness issue.

Councilmember Becky Arellano asked Gaston if the company would have a dedicated executive in the area to ensure everything at Evergreen runs according to plan. Gaston said that not only has Evergreen been in contact with Stanislaus County programs to ensure local hires, but that they will be training strong candidates to manage the store after executives get the location up and running.

“That was our concern coming into this process, that we’d be cast as carpet baggers from Washington,” Gaston said. “We’re committed to having a successful business, and you can’t have a successful business if we’re not involved as owners.”

The Council also approved a development agreement with Perfect Union, which hopes to open its fourth California store at 2500 N. Golden State Blvd. The dispensary estimates it will generate just under $3 million in revenue during its first year of operation, which would provide an annual public benefit to the City of over $853,000 under the approved development agreement.

The five-year agreement will see Perfect Union pay to the City a public benefit amount of no less than $25,000 per month or 5.25 percent of its gross monthly receipts, and the minimum payment will increase by $5,000 annually.

Both dispensaries mentioned to the City Council that they hope to host job fairs in order to attract a local workforce, and Perfect Union is committed to ensuring at least 80 percent of its hires live in Turlock.

Also during Tuesday’s meeting, the Council approved the second readings of two development agreements they approved at the previous meeting: a cultivation, manufacturing and distribution site, Fuego Azul, Inc., at 495 S. Golden State Blvd., and a dispensary, Firehouse, at 1601 W. Main St.

Although the approval of the second readings did not finalize the locations for each candidate, several members of the Osborn Two-Way Immersion Academy community spoke against the proposed dispensary, citing its proximity to the elementary school. All cannabis operations are required to be at least 600 feet away from any school, but fear of students walking home past the dispensary as well as nearby bus stops had community members up in arms.

“I’m not against a dispensary, I just don’t want it near a school,” Turlock Unified School District Trustee Mary Jackson said. “It should be 2,000 or 3,000 feet away.”

At TUSD’s Sept. 3 Board of Trustees meeting, Superintendent Dana Salles Trevethan said that she and Assistant Superintendent of Business Services Barney Gordon would be speaking up about concerns they have over the location when the dispensary goes before the Planning Commission for a Conditional Use Permit at the end of October.

“Chief Amirfar will keep us abreast of any new developments and reminders of when those meetings are and where they’re held, so Barney and I will be representing TUSD and, of course, any other folks that care to speak,” Trevethan said.