Central California

Even deep-red California is looking to profit off pot

The lure of big bucks from legal marijuana tax revenues is enticing yet another central San Joaquin Valley town.

Woodlake, a city of around 7,500 people in northeastern Tulare County, is talking about whether to allow cannabis cultivation and recreational marijuana dispensaries within its small borders. It’s not the first local city to consider pot, but Woodlake’s approach bucks the precedent set by its ultra-conservative neighbors. A community struggling to survive on a $2 million annual budget could double its bank account in mere months, but critics say doing so could hurt those most in need of its protection.

The discussion began shortly after California’s passage in November of Proposition 64, which legalized recreational marijuana use for anyone over 21. At the next Woodlake City Council meeting, Mayor Rudy Mendoza remembered, people began to ask the city to consider allowing marijuana. That continued at every meeting until the council ultimately directed staff to look into it.

The council formed a citizens advisory committee that includes representatives from the city, the Woodlake Police Department, the Woodlake Unified School District and the public. The committee will collect the results of a Facebook survey circulated last month that asked Woodlake residents to weigh in on pot, including how the city should spend the money generated from taxing marijuana. It also is seeking information from other cities further along in the pot ordinance process.

Mendoza, a Republican with aspirations for higher office who works as a staffer for Rep. Devin Nunes, R-Tulare, refused to share his opinion on Proposition 64 and the cannabis industry, saying he did not wish to influence his constituents before the city shares its findings at the Monday meeting.

“The state already made it legal,” he said. “It’s already out there. We are doing our due diligence, just as we would for any industry wishing to do business in the community.”

That reaction is not new. Most Valley council members have walked a fine line on pot, with nearby communities like Clovis, Hanford and Fresno have either banned recreational businesses outright or moved to delay or restrict them

Medical marijuana has typically been used to ease cities into the idea of allowing pot. Helping patients is a much more palatable concept than selling drugs. But both can make an awful lot of money for government treasuries.

Woodlake, however, isn’t taking that route. Its mayor and city administrator did not once mention medical marijuana in interviews. The city’s survey makes no mention of medical marijuana. Instead, it mentions allowing commercial cultivation and recreational dispensaries. Plans for the latter have not been finalized in any Valley city, meaning the small town has a chance to cash in on recreational pot before anyone else.

When you look at what’s happening in Coalinga, just 80 miles to the west, it’s easy to understand why Woodlake appears to be approaching the issue on purely financial terms.

Coalinga made waves in July by legalizing commercial marijuana cultivation and accepting a $4.1 million offer from a Southern California grower to purchase a vacant prison and set up shop on the outskirts of town. This wiped out a considerable budget deficit, estimated at $3.3 to $3.8 million.

Since then, the city’s been hard at work selling an entire industrial park to marijuana-related businesses. City Manager Marissa Trejo said five of the 10 lots have already been sold, and the remaining five are expected to close escrow by the end of July.

The five plots sold by Coalinga were listed for just under $1 million combined, Trejo said. They sold for $2.09 million. The city’s total general fund is a bit more than $7 million.

The money generated from these sales will be divided among taxing agencies within Coalinga. This means the Coalinga-Huron Unified School District, West Hills Community College District, Coalinga-Huron Recreation and Parks District — all of which were heavily opposed to the city allowing cannabis cultivation — will get thousands of dollars.

And that’s just the beginning. Coalinga residents also voted to allow a medical marijuana dispensary and approve a sales tax on pot, both of which are still being implemented.

Trejo also noted that, once operational, the new businesses in the industrial park will employ 500 people. That’s a pretty big deal to a city of 14,000 that recently lost a major employer in Kmart Corporation.

Woodlake is not Coalinga. It’s half the size, in a different county and not next to major highways. But if the city could pull in even a fraction of what Coalinga or Hanford stands to make, it would be a big help.

Mendoza, the Woodlake mayor, stressed that the government is not in debt, but he said that holding the line on a strict $2 million general fund while maintaining high levels of public service can be difficult.

“Every year it gets incredibly difficult to provide essential services — public safety, code enforcement, (Americans with Disabilities Act) compliance — to the community,” he said. “We’re very fortunate to have been able to balance our budget so far.”

Pot could help with that. So could a sales tax, which is also being discussed. One or both could go on a November ballot this year. Around 100 Facebook surveys have been collected so far. Preliminary results show that people would like money from either measure to pay for additional police and fire personnel as well as parks.

The rush is necessary, because Proposition 64 requires cities to have their rules in place by Jan. 1. If Woodlake wants to implement a pot tax, it has to do so by then.

Drew Sorensen, superintendent of the Woodlake Unified School District, is conflicted about the marijuana discussion. He understands the financial incentives and the changing times, but he also cautioned that marijuana use by students has already increased in Woodlake since Proposition 64 passed.

“Every city is considering this,” Sorensen said. “It’s a way to put legal dollars into the city’s coffers. But there are pros and cons, just like anything. Would that money conquer the increased usage (by children)? From a school standpoint, it wouldn’t.”

Sorensen said he believes students and parents could be educated on the legal use of marijuana.

“It’s no different than the bad use of social media,’ he said. “People do bad things with things that can be good for us all the time. I believe in prevention rather than suppression.”

But Sorensen cautioned Woodlake residents to take their time in considering all the consequences before moving forward.

“I would feel horrible if we did this only for money,” he said. “If it’s at the expense of students getting hooked and doing badly in school — I don’t care how many dollars there are.”

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