The Turlock City Council will hear a presentation on Tuesday about putting a cannabis tax before city voters.

Currently, the city’s cannabis pilot program – with retailers FF Farms, Firehouse, Natural Healing Center, and Perfect Union – generates revenue for the city through development agreements that have set a public-benefit fee of 5.25 percent of gross receipts – up to $45,000 per month. Plan4Dreams, which deals in cannabis cultivation, manufacturing, and distribution, also pays a public-benefit fee, however, based on square footage of its cultivation canopy and manufacturing space.

To review this program, the council established the Cannabis Ad Hoc Committee that was chaired by Councilmember Cassandra Abram and included Councilmember Kevin Bixel and Planning Commissioners Matthew Davis and Jim Reape.

In April 2024, that committee submitted to the city council a memorandum of

its findings and recommendations. One of these recommendations was to pursue a cannabis business tax.

The full council weighed in on the issue in June of 2024 but decided not to move forward with plans to put it on the November ballot that year.

Now, it’s back before the councilmembers once again.

Las month, city staff consulted with cannabis operators:

• Perfect Union received written communication stating it does not support such a measure nor is it willing to contribute financially;
• Firehouse received written communication stating they support the measure and is willing to contribute financially;
• FF Farms received a verbal communication stating it supports the measure but are only willing to contribute financially if other operators contribute;
• NHC received written communication stating it does not support the measure nor is it willing to contribute financially;
• Plan4Dreams received verbal communication stating it supports the ballot measure but not as written, feeling the maximum square footage rate for cultivation is too high.

Both Perfect Union and NHC expressed concerns with the proposed maximum rate but are

willing to reopen discussions in 2028.

The discussion with Council at this time is only to bring the ballot measure forward and not approve the ballot placement. If approved to move forward, the measure will be brought to council at the next meeting on June 23.

To date, the dispensaries have generated $8 million in public benefit funds, with Firehouse ponying up more than half of that total, $4.1 million, since opening its doors in August 2020. Perfect Union has contributed nearly $2.4 million since opening in September 2020; NHC has paid $1 million since opening in May 2023; FF Farms has paid just over $500,000 since opening last year.

In the meantime, in response to concerns from operators, the city is proposing to amend the monthly minimum payment and move solely to a percentage payment. The city would recommend up to 9 percent of gross receipts but would propose to set the amount at 5.25 percent through May 2027, at which time the city council could set a new public benefit amount within that proposed range.

The city will hear a second reading Tuesday on amending and extending the development agreements will all cannabis operators.