It has been at least a year since Banning gave its approval for three marijuana retail shops to open.
No one has seen one open yet, and frustrations festering within the community metastasized onto social media, where rumors ran rampant that the city was planning to expand the number of marijuana-related retail shops to more than 20.
Irritated, Mayor Daniela Andrade clamped down on such canards at Banning’s May 12 council meeting.
Explaining that the council sought input from its planning commission (which moved its discussions on the item until June), “We wanted input on this. No one suggested we’d have 24 outlets,” equivalent to the number of applications the city received to be entered into a lottery for three slots available within a commercial area along Ramsey Street.
Councilman David Happe was not happy about the lack of progress pertaining to the three initial storefronts.
“There’s no tax revenue, no retailers, no cultivation businesses” operating in Banning, and expressed concerns that one applicant had to cycle through a couple of lease agreements before settling on one that was acceptable.
Community Development Director Adam Rush explained that the process to approve that application occurred between October to December of 2019, and that “staff bent over backwards as much as they legally could” to expedite the application, and that the timing came down to a reasonable real estate transaction in which the applicant did not need to worry about investing in an extraordinary overhaul of the property, fell within the retail cannabis zone, which is currently in the Highway Serving Commercial Zoning District that lies between Livingston Street to the south, Hays Street to the north, and flanked by Sunset Avenue in the west and 8th Street to the east.
Councilman Art Welch pointed out that everyone who applied for a retail marijuana operating permit in Banning fully understood that only three dispensaries would be allowed.
Those who were selected over a year ago took out permits based on their impression that only one per 10,000 residents (Banning had 30,000 or so at the time) would be allowed. They did not plan to set up shop in Banning expecting to compete with more than three, or anticipate that the rules could change to allow one dispensary per every 10,000 people in all of the cities in the Pass area, which would be closer to 100,000 citizens — meaning more competitors.
If the city moved to allow more than three, it would not be standing up to its commitment to those first three applicants, Welch said, adding “We had hiccups because people in this town thought we could charge LA prices.
“I don’t want to go back to them and tell them” that the city suddenly wanted to double the number of dispensaries it allowed, Welch said.
Mayor Pro tem Colleen Wallace suggested “Let the three get started,” and, if they are deemed successful, “maybe” consider allowing a fourth dispensary. “Instead of worrying about 10, let’s get these three open. I don’t want us to be known as the capital of cannabis” retailers.
Mayor Andrade is losing her patience with the three applicants, noting that one of them has already had their permit extended, which she was not in favor of.
“If an applicant is changing locations three times, that is on them” and not the city’s problem, she said. “May 23 will be a year.”
She blamed the applicants for dragging their feet.
The one that is closest to potentially being open put in their application after settling on a third real estate transaction in January; another’s was as recently as April 22, and that was only submitted after the city had shown how frustrated it was that applicants had nothing to show the city.
“They had to have a contract in place” with their buildings’ owners, Andrade pointed out, adding “If they wanted to place their bets on that first” dispensary to see how well it would do, “That’s on them,” she declared. “If they can’t open up” when they claim they will — with a physical address and a contract with the property owner — then “we need to move on” and draw another applicant from the lottery pool, Andrade said.
The city was given the option to consider ending the cap of three dispensaries and allowing for more competition and more opportunities to create jobs, which Councilman Happe favored, as someone who supports free market economies.
He was the only one to vote against keeping the cap at three. The council unanimously voted to reduce taxes on canopy space for marijuana cultivators to $5 per square foot for a cultivator’s first year in business and raising it to $10 in subsequent years to assist business owners straining to reign in start-up costs.
And council unanimously supported allowing for the option to tax marijuana distributors that may operate in Banning, supporting a measure that would go before voters to allow the city to impose a tax up to 10 percent if the city wanted to, though discussion suggested that the city would not likely initially impose a tax right away, mirroring the amount Palm Springs currently levies on marijuana distribution entities there.
Banning presently only has ordinances in place to tax cannabis retailers at 10 percent of a business’s gross receipts, commercial cultivators, manufacturers and testing facilities.