In the face of a looming financial crisis and dwindling reserves, City Council faces — both new and established — are suggesting that Turlock revisit its ban on commercial cannabis and look into whether or not the industry can serve as a reliable source of income.
The Turlock City Council made it clear in January 2017 that there would be no marijuana dispensaries in town when they voted to prohibit all commercial activities related to cannabis, including cultivation and cannabis deliveries within the city. In January 2018, the Council also adopted a policy to deny approval to any cannabis-related enterprise within Turlock’s sphere of influence in the county.
The City’s recent budgetary woes caused a resurgence in community and business interests asking the Council to reconsider during a May 2018 meeting, and at their Special Meeting on Feb. 26, the topic was brought up again — this time, by Councilman Gil Esquer, who along with past Councilmember Bill DeHart was appointed to an ad hoc committee meant to evaluate the City’s cannabis policies following the May meeting.
“Last year we had the ad hoc committee for cannabis, and we worked on that for about six months. I think we’re ready to bring it back and figure out what we are going to do as a Council,” Esquer said. “Are we going to proceed looking into this, or are we going to let it drop? I think we need to bring it back on the agenda as soon as possible, get it discussed and make a decision on which way we’re going.”
The suggestion came after the Council received a report on the City’s unaudited 2017-18 budget, an update on how 2018-19 is shaping up and what 2019-20 might look like, which showed that if the City continues in its current deficit spending pattern, the General Fund Reserves will be below $3 million by June 2020, breaking the Turlock Municipal Code.
"I think we need to bring it back on the agenda as soon as possible, get it discussed and make a decision on which way we’re going.”Councilman Gil Esquer
Cities around Turlock, like Ceres and Riverbank, have already established commercial cannabis activities, and Modesto is in the process of implementing a cannabis program after residents passed a marijuana tax of their own in November 2017. Under Stanislaus County’s cannabis program, a recreational marijuana dispensary also operates in Denair.
Thanks to developer agreements with its two marijuana dispensaries and one manufacturing facility, which vary in amounts of up to $100,000 per month, cannabis revenues for the City of Ceres represented 8 percent of the General Fund after one year of operation, following behind property tax (12 percent), motor vehicle taxes (18 percent) and sales tax (30 percent).
With Turlock’s population of almost 73,000 (compared to Ceres’ 48,000), local attorney Mike Warda, representing clients seeking to grow and sell cannabis in Turlock, estimated last year that Turlock could generate $3 million a year in sales tax and another $3 million a year in a special tax that would go directly to the City.
This could help Turlock’s financial troubles, which are due in part to lower-than-anticipated sales tax revenues. Esquer, along with Councilmembers Nicole Larson and Andrew Nosrati, cited commercial cannabis sales as a potential source of revenue that should be looked into further by City staff. Esquer and Mayor Amy Bublak are the only current councilmembers who have voted on Turlock’s cannabis policies, as Larson, Nosrati and newly-appointed Councilwoman Becky Arellano took seats at the dais in 2019.
“I think that we really need to move quickly on cannabis, at least have a true discussion on it,” Larson said, proposing City staff reach out to neighboring city managers with just a few questions so that the Council can better understand if cannabis would be a good fit for Turlock or not, including information on how the dispensaries operate, the industry’s impact on the community and public safety and whether or not federal grants have been hard to come by as a result of each city’s cannabis dealings.
“I think those are the three main questions we can really get a move on, and I think we can see a decision sooner rather than later,” she said.
Nosrati suggested placing a deadline on such information so that the item can be brought before the Council as soon as possible, recommending the topic be revisited in about a month. Such plans, however, likely won’t even begin to take shape until later this month, when the City hires a new full-time attorney.
“Just as a cautionary thing, you know we’re in between having an attorney,” Bublak told Nosrati. “Once we hire somebody, I think we can move forward on that but I don’t want our City Manager to be in a position to be telling us legal advice.”
City Manager Bob Lawton said that in the meantime, he didn’t see a problem with reaching out to his colleagues in neighboring cities with the questions that Larson suggested.
“I think it’s possible to have that level of conversation, but it won’t be enough,” he said. “It will give you the opportunity to think, ‘Do we wish to pursue this further?’ That’s really the threshold we want to get over.”
As a result of the discussion, a future City Council meeting will likely see an agenda item calling for a motion to further explore a potential cannabis policy decision through the collection of information.
“We’ve all had time to think about it and the data is all there for us to compile,” Nosrati said. “We’re dragging our feet and it’s time to move.”