Marijuana business district, tax gets Grover Beach council’s OK

The Grover Beach City Council approved a pair of marijuana ordinances Monday that will legalize commercial marijuana businesses in a 70-acre section of the city, as well as pushed plans to explore allowing such businesses in other areas.

The ordinances will only apply to medical marijuana for the near future as the state continues to work on its regulatory framework for recreational marijuana. That isn’t expected to be rolled out until 2018.

“We are the leaders in the county with this,” Councilman Jeff Lee said Monday night. “I think there is an opportunity here to move forward with this in a reasonable fashion.”

The ordinances will need to return to the council for a second reading before going into effect.

The two ordinances set up a process for regulating commercial marijuana in Grover Beach: the first restricts where such businesses could be located, while the second sets up the commercial cannabis tax approved by voters in November.

Marijuana district

The land use ordinance applies to an overlay to city code that would allow commercial cannabis uses in a 70-acre industrial area between Farroll Road, Highland Way, South Fourth Street and South 13th Street.

The city currently prohibits all commercial marijuana businesses. The new overlay allows cultivation, nurseries, manufacturing, testing laboratories, transportation, delivery, distribution (including storage) and dispensaries for retail sales in the area.

On Monday, several members of the public expressed worries that concentrating marijuana businesses in just one area would harm the neighborhood and wasn’t conducive to certain types of commercial businesses — which came as a surprise to some of the council members.

“I had no idea people would not want this concentrated in one area,” Councilwoman Mariam Shah said, noting that her children have school and extracurricular activities in that neighborhood. “I thought it would be better to have this all in one area because we can have it camera-ed and controlled and police patrolled.”

Councilwoman Debbie Peterson expressed concern that the overlay would push existing businesses out of the area, amid other worries about parking and traffic in the already bustling neighborhood.

“I’m concerned we aren’t addressing the negative impacts,” she said.

The council eventually decided to push through the land use ordinance, while simultaneously asking city staff to explore how it could expand the overlay to other parts of the city, so the businesses aren’t concentrated in one area.

“I think we try it out and see how it works,” Councilwoman Barbara Nicolls said. “We start small, and leave room for expansion.”

Cannabis tax

The council also approved its cannabis tax Monday night, which could theoretically bring in $2 million in revenue to the city.

Voters overwhelmingly approved the tax, Measure L, in the November election, with 71.4 percent of voters in favor of it.

It levies an annual charge on nurseries of $25 per square foot for their first 5,000 square feet of grow, plus $10 per any additional square foot, while separately taxing all other marijuana businesses based on their annual revenue. The tax rate for those would be 5 percent for medical marijuana-related businesses and 10 percent for recreational marijuana businesses.

Grover Beach is the only city in San Luis Obispo County to have such a tax.

Kaytlyn Leslie: 805-781-7928, @kaytyleslie