RivCo Supervisors Establish Provisional Steps For Licensing Cannabis Businesses

Jan 30, 2019

Photo of the private cannabis consulting company Highroad Consulting Group's billboard promoting the cannabis business in Riverside County.
Credit highroadcg.com

   RIVERSIDE (CNS) - Overcoming reservations, Riverside County
supervisors yesterday (Tuesday) tentatively adopted specific processes by which marijuana
growers and sellers can obtain permits to do business in unincorporated
communities, though components of the regulatory framework still need to be
refined.
   ``We've been at this a long time,'' Board of Supervisors Chairman
Kevin Jeffries said before the 4-1 vote. ``We clearly have work to do, because
there are a number of concerns. It's not the Christmas tree that everybody
wanted.''
   Supervisor Jeff Hewitt cast the sole dissenting vote against policy
``B-9'' and revamped Ordinance No. 671, both of which lay down rules and
guidelines, as well as establish a fee schedule, connected with ``commercial
cannabis activities'' in unincorporated areas. The policy and ordinance will be
brought back to the board for adjustments and formal implementation next
Tuesday.
   Hewitt expressed displeasure with public benefit scoring associated
with the regulatory scheme, under which prospective cannabis growers and
retailers who commit to making infrastructure and other improvements to places
where they intend to set up shop receive credits on their permit applications,
potentially moving them to the head of the line in vetting by county officials.
   Hewitt characterized the action as a type of ``pay to play'' that
builds unfairness into the process.
   ``I like to think Riverside County should be a place where the little
guys have a chance to compete and not have an R.J. Reynolds or a Philip Morris
controlling everything,'' the supervisor said.
   The comments elicited a sharp retort from Jeffries, who along with
Supervisor Chuck Washington, spearheaded efforts to formulate the comprehensive
marijuana regulatory scheme two years ago.
   ``The goal is to have successful business owners re-investing back
into the community,'' the chairman said. ``I'm surprised you find that to be a
bad thing.''
   Jeffries insisted that without a public benefit aspect to the
permitting process, the entire regulatory framework would be undermined.
   ``If we wait for perfection, we're not going to have anything,'' he said.
   Supervisor Karen Spiegel said she was unenthusiastic about normalizing
cannabis transactions, but ``it's going to happen, so let's have some
control.''
   Supervisor Manuel Perez complained the regulations omitted ``social
equity'' elements that should be part of the permitting process. He pointed to
the need for ``loans, grants, technical assistance'' and other facilities to
ensure micro and small business operators in economically disadvantaged
communities have an opportunity to engage in cannabis trade.
   He also sided with speakers who addressed the board over a 90-minute
span, denouncing the regulatory structure as overly burdensome.
   Longtime marijuana legalization activist Larry Swerdlow told the board
``safe, reliable, legal access'' to cannabis should be the county's
objective, instead of making prospective growers and sellers jump through
hoops.
   Several Anza Valley residents condemned the regulatory scheme as
antagonistic to the free enterprise system.
   ``New things are opening up in Anza because of cannabis,'' a woman
identified only as Jasmine said. ``We want to thrive and be a part of this, not
keep it in the black market.''
   Washington said he was comfortable with a ``small number of licenses''
being awarded initially because the county needs time to see whether the
regulatory scheme will be viable.
   ``We heard today from people who are supportive of legalized
marijuana,'' the supervisor said. ``But I hear from just as many people in my
district who are opposed to this. It's not our goal to make everyone happy.''
   The public benefit scoring and social equity complaints will be
addressed again at the board's Feb. 5 meeting, as well as changing the timeline
for applicants to submit their requests for development agreements and
conditional use permits. As of now, requests would have to be filed by April 12
for vetting this year.
   The county intends to approve 50 conditional use permits and
development agreements for cultivators, and 19 permits for retailers.
   Operations will only be permitted in designated locations identified
by the board when it conceptually approved commerce in cannabis on Oct. 23.
   Executive Office staff estimated that first- and second-year costs to
the county for processing permits, carrying out on-site inspections and law
enforcement details will total about $3.15 million.
   To recoup expenses, ``public benefit fees'' will be charged, based on
the size of each operation.
   In the case of an indoor cultivator using between 2,500 and 5,000
square feet, the fee would run $4.50 per square foot. A dispensary operator
using 2,500 square feet or less would owe the county $16 per square foot. A
manufacturer of cannabis products with over 3,000 square feet dedicated to the
business would be required to pay $4.50 per square foot.
   The fees will be collected annually, separate and distinct from sales
tax receipts.
   Conditional use permits will each have a 10-year life span and cost
$6,000 up front.
   No development agreements are pending before the board, but templates
submitted for the meeting indicated that each applicant would be held to
standards regarding what they can do with a property -- and the county's
exemption from any liability arising from what transpires there.
   A provision in each agreement would also underscore that the federal
government still recognizes marijuana as a Schedule I drug under the Controlled
Substances Act, and if there are moves by the feds to stop commercial cannabis
activities, an agreement would be ``deemed terminated.''
   All entities seeking to begin operations in the county would need to
procure permits from the California Department of Food & Agriculture's
CalCannabis Licensing, Compliance & Enforcement Division, as required under the
Medicinal & Adult-Use Cannabis Regulation & Safety Act.
   The cities of Banning, Desert Hot Springs, Jurupa Valley, Moreno
Valley, Palm Desert and Perris all now have processes in place for permitting
commercial cannabis operations.

CNS-01-29-2019 14:34