The Turlock City Council approved development agreements with its first three cannabis pilot program participants on Tuesday, furthering the process to bring recreational marijuana use to the city as dispensaries eye locations around town.
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 three development agreements: one with a dispensary, one with a cultivation, manufacturing and distribution site and another with a distribution location. The approvals were only for the amount of money the City will receive from each candidate as a result of their operations — not for the business’ locations.
“While there’s a location in there, the central purpose of this agreement is the amount that’s been negotiated,” City Attorney Doug White said, explaining that the approval of proposed locations will come later in the process when candidates apply for conditional use permits.
These candidates are the first three participants in the City’s cannabis pilot program to go before the City Council after completing the Request for Qualifications process; another three dispensaries have yet to present, and an additional six cultivation, manufacturing and distribution locations will be decided upon as well.
The approved development agreement between the City and Cal State Ventures2 for a distribution operation at 501 West F Street will see the business pay a public benefit of 2.5 percent of gross receipts from its revenue, paid on a monthly basis for the next five years.
An additional development agreement between the City and Fuego Azul, Inc., for a cultivation, manufacturing and distribution site located at 495 S. Golden State Blvd. was also approved. For cultivation, a public benefit amount based on the square footage will see $10 per square foot paid monthly for five years. An additional public benefit amount of the same value will also be paid for the business’ manufacturing operation, and for distribution, Fuego Azul, Inc., must also pay 2.5 percent of its gross receipts to the City on a monthly basis.
Fuego Azul, Inc., is owned by The Premier Group, who also saw their development agreement for a dispensary (Firehouse) located at 1601 W. Main St. approved on Tuesday. The Premier Group also operates dispensaries in Riverbank, Ceres and Modesto, which generate $500,000, $1.2 million and $1.2 million each year, respectively.
In Turlock, Firehouse will pay the City $25,000 or 5.25 percent of its gross receipts on a monthly basis during its first year of operation. The minimum amount of $25,000 will increase by $10,000 annually, meaning that in the fifth year of the development agreement, Firehouse will pay the City $45,000 or 5.25 percent of its gross receipts.
Although all three development agreements were approved, residents took to the public comment period for Firehouse’s development agreement to express their disdain for its proposed location. The building, which formerly housed the Waffle Shop near Highway 99, is just down the street from Osborn Two-Way Immersion Academy.
“I’m frustrated that this is being put on the west side,” TUSD trustee Mary Jackson said. “I think you would never do this by Pitman High School.”
Locations for the proposed commercial cannabis businesses will not be approved until each applicant’s conditional use permit goes before the Council, White explained. Within the coming weeks, neighborhoods, nearby businesses or schools and any parties of concern — like the Turlock Unified School District — will be notified of the public hearings for each proposed location, giving community members the chance to voice their opinions to Councilmembers.
“If it’s the Council’s desire to approve this measure tonight, nothing opens up tomorrow,” White assured the meeting’s audience.
Following the approval of the development agreements’ first readings, White announced the second readings will take place during the Sept. 10 City Council meeting. Additional candidates will go before the Planning Commission on Sept. 5, and will go before the Council for a first reading on Sept. 10. By the first week of October, conditional use permit applications should be well underway, White said.
Though the three remaining dispensaries invited to apply to operate in Turlock (MedMen, Perfect Union and Evergreen Market) have yet to go before the Planning Commission or City Council with their development agreements, each has secured a location out of which they would like to operate.
Perfect Union is hoping to put their dispensary at 2500 N. Golden State Blvd., where G & L Irrigation and Farm Supply currently sits, between the Assyrian American Civic Club and Garton Tractor, the company told the Planning Commission on Aug. 22.
County Supervisor Kristin Olsen presented to the Planning Commission during that same Aug. 22 meeting as Evergreen Market’s Community Engagement Advisor, informing commissioners that the company has secured property at 693 N. Golden State Blvd. in the Turlock Town Center and hopes to open its Turlock dispensary there.
According to MedMen senior communications specialist Dani LaSalvia, the national-recognized brand has acquired the land at 475 S. Golden State Blvd and will construct its dispensary from the ground up, if approved.