News Update: Needles, CA: Slim majority vote by the Needles City Council approves preparing an ordinance on establishing a numerical limitation on the number of cannabis dispensaries.

By: Zachary Lopez (ZachNews):

Source: City of Needles (Information and Agenda Packet):

Needles, California: Members of the Needles City Council slim majority voted to approve the preparing of an ordinance on establishing a numerical limitation on the number of cannabis dispensaries.

Live Broadcast By ZachNews (Skip to 19:36 for Agenda Item #10):

The vote occurred during the regular meeting of the Needles City Council and Needles Public Utility Authority that was held on Tuesday, October 26th, 2021, which you can watch at ZachNews on Facebook.

Documents from the City of Needles, on October 12, Councilor Evans requested that the City Council consider a limitation on the number of cannabis dispensaries in the City. The matter is agendized to determine if the City Council wants to consider an action on the matter at a subsequent meeting. “Please add an item to the October 12th agenda for council to DIS/ACT on setting a limit of 10 to retail/dispensary CUP’s with a stipulation of after January 1, 2022 any retail CUP that expires or if a dispensary closes, that limit/cap moves to the number of the remaining active CUP’s not to go below six. I believe with too many retail/dispensaries open the supply for cannabis retail will be much higher than the demand which in my opinion is not economically sound. I do not believe this will affect the amount of excise tax the City of Needles will collect from retail cannabis.

*** History of Dispensaries: ***

  • 6 dispensaries opened without permits in 2010. The Council immediately established a ban on them.
  • In 2012 the voters passed the Marijuana Tax. The existing dispensaries were granted immunity from the ban if they paid the Marijuana Tax while the City was developing an ordinance regulating them.
  • In 2014 the Sheriff’s Office raided all 6 as unpermitted which led to 2 permanently closing.
  • In 2015 the City developed the original Medical Marijuana regulations (Ordinance 12-A). That initial ordinance did not include any provisions to permit a new dispensary beyond the four that pre-existed the ordinance: THC, H Street, Herbarium, and BudFarmacy.
  • In December 2019 Councilor Tom Darcy requested that the Council amend the ordinance to allow one new dispensary on the west end of town; the Council denied the request.
  • May 26, 2020, the Council amended the ordinance to allow new dispensaries upon application. No limit as to the number of new dispensaries was set, instead their stated intent at the time was to rely on the marketplace to determine a dispensary’s viability. The process chosen to allow a dispensary is through a Conditional Use Permit which is discretionary as opposed to an outright use. The Conditional Use Permit process allows the Council to deny any application if they fail to meet all of the requirements for a Conditional Use Permit, such as neighborhood compatibility or adverse impact to nearby property values. Likewise, if an application does meet all of the criteria there is a presumption that they should get the permit.
  • Since 2020 10 total dispensaries have been permitted; including the original 4. Of those 10, 5 are operating as of today. Two are in permitting review.

The revenue chart since the change to allow additional dispensaries is attached. Of note is that while there are seasonal and monthly changes, the revenue trend is generally flat meaning that the additional dispensaries are not increasing the overall revenue.

What will change the overall revenue is an increase in customers such as population growth. Population estimates from the Census Bureau are that in 2019 there was 4976 people. Population in 2021 is estimated at 4974. These are estimates. The actual official population for 2020 will be released by the Census Bureau once the census data is released.

The California Department of Finance is responsible for determining official population for cities and counties for purposes of state-shared revenue distribution (gas tax, CDBG, etc.). They report the following:

*** COUNTY/CITY: 4/1/2010 — 1 /1 /2011 — 1/1/2012 — 1/1/2013 — 1/1/2014 — 1/1/2015 — 1/1/2016: ***

Needles:                             4,844 —- 4,879 —- 4,945 —- 5,107 —- 5,134 —- 5,175 —- 5,271

As for the fiscal impact, the City of Needles said in the documents that unknown if more dispensaries will increase overall dispensary revenue or merely redistribute it amongst the dispensaries.

The recommended action to members of the Needles City Council is to provide direction on whether the Council wants agendize this matter for action at a subsequent meeting to establish a limitation on dispensaries, and, if so, direct staff to develop the methodology to do so.

*** Agenda Packet for Agenda Item #10 (Unless otherwise noted, all downloadable agenda packets that are posted here are in a PDF file format so please make sure to have a PDF file reader or viewer): ***

cc-10-102621-dispensaries

Before the reading and discussions began on Agenda Item #10, Needles City Council Member Zachery Longacres recused himself from the agenda item because he “signed up for a new job this last week. I work for Mojave Cannabis as their brand ambassador. So I will be recusing myself on 10 (Agenda Item 10).”

In summary, discussion and debate from members of the Needles City Council as well as public input ranged from the topics of should the city council limit the number of cannabis businesses from coming into the community, to how much should a limit should be; as well as discussing on properties holding on to their properties for cannabis businesses and how that affects non-cannabis businesses.

After discussion and debate members of the Needles City Council as well as public input, the motion to prepare an ordinance on establishing a numerical limitation on the number of cannabis dispensaries.

Members of the Needles City Council then voted on the motion, voting 3-2 approving; with Needles City Council Member Campbell and Needles Vice City Mayor Paget voted “No” on this agenda item well the rest of the Needles City Council voted “Yes”  on this agenda item.

The ordinance will be brought back to the Needles City Council after the ordinance has been prepared, and the Needles City Council will then discuss and take action; this could happen at their next first meeting in November 2021.

For more information, please contact Dale Jones, City Clerk at the City of Needles at: 1 (760) 326-2113.

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