Woodlake City Council issues regulatory permits to cannabis companies Green Bean Pharm and CCW LLC

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By Paul Myers @PaulM_SGN

WOODLAKE – This month’s final election results showed that 308 Woodlake voters were in favor of a commercial cannabis tax, and now the City is ready to use it. As recently as Monday the Woodlake City Council voted 3-1, with Greg Gonzales absent and Frances Ortiz as the lone dissenting vote, to issue regulatory permits to Green Bean Pharm and a company titled CCW LLC.

According to a staff report the City received dozens of inquiries and requests to operate a dispensary within the city limits. By the end they were left with the two qualified and applicants. Both applicants went through the several phased process including: submitting a business plan summary and budget, site location and development proposal, management team, summary of security plan and lastly a face-to-face interview with a committee to demonstrate their commitment to the City, knowledge of the state law and willingness to meet all City requirements.

According to the same report Green Bean Pharm plans to hire 13-16 retail employees and plans to operate seven days a week. The report notes as well that Green Bean Pharm has operated a medicinal marijuana business in Tulare County since 2013, but their location in Woodlake will be at 515 W. Naranjo Boulevard.

CCW LLC currently owns an established medical cannabis dispensary in Santa Cruz County. They estimate it will take five to six employees to run their dispensary seven days a week. CCW LLC have identified a location at 132 N. Valencia Boulevard. Community services director Jason Waters said that they have already began their site plan review process and will start their Conditional Use Permit (CUP) process through the planning commission soon. Green Bean Pharm has already submitted a site plan review for their location.

The Woodlake staff report shows that the next steps for the dispensaries could take several months. Aside from gathering a CUP they still have to show a Certificate of Occupancy, a Woodlake Business License and get a license from the State of California.

But those are just the two dispensaries. The planning commission is still working its way through two cannabis manufacturing companies applying for CUPs in the industrial zoned portion of town.  Their planning commission public hearing is today, Wednesday, Nov. 29 at 6:00 p.m.

One applicant, Green Smart Farmer is looking to gather a CUP for 915 Ropes Ave. There they can cultivate, manufacture and distribute, but they cannot commercially sell cannabis as a dispensary. The name of the second manufacturing company was not available as of press time but they plan on locating to 351 S Acacia Street.

Waters said that a CUP is for businesses that fall slightly outside what is generally considered the purpose of the zone. Other business that would require a CUP for the industrial zone would be a cement plan, brewery, agriculture chemical storage, meat processing etc. He said that the zone is not a catchall and issuing a CUP gives the City the capability to ensure that particular precautions are in place. For instance after researching places where cannabis was made legal he realized that one of the chief complaints from residents was an odor. As a result the City requires that cannabis cultivation be indoors instead of open air, in addition to a whole host of security measures.

“We’re doing our due diligence and we’re being as careful as we can,” Waters said.

Waters went on to say that in a time and place where cities are standing firm on a wait and see approach, Woodlake is continuing on and embracing the full complement of commercial cannabis. He said that they found marijuana consumption did not rise in places where it was more readily available, and that access to marijuana has been available long before Prop 64.

“Not having dispensaries was not going to reduce access…so why not generate revenue and mitigate negative impacts or use the money for good things in the city,” Waters said.

And there are a bevy of new taxes coming down the pike for commercial cannabis businesses. According to the California Department of Tax and Fee Administration, starting on Jan. 1, 2018 those taxes will include:

  • Cultivation Tax – Cultivators are responsible for paying the cultivation tax on all harvested cannabis entering the commercial market to the distributor (or to the manufacturer if that is where the first transfer or sale of unprocessed cannabis takes place). Manufacturers who collect the cultivation tax are required to pay the tax to the distributor. The distributor reports and pays the cultivation tax to the California Department of Tax and Fee Administration (CDTFA). The current cultivation tax rates are $9.25 per dry-weight ounce of cannabis flowers, and $2.75 per dry-weight ounce of cannabis leaves.
  • Excise Tax – Both cannabis and cannabis products are subject to an excise tax. Retailers are responsible for collecting the cannabis excise tax at the time of the retail sale and for paying the tax to the distributor, who reports and pays the cannabis excise tax to the CDTFA. The current excise tax rate is 15 percent of the “average market price” when purchased at retail. The average market price is the wholesale cost of the cannabis or cannabis products sold or transferred to the retailer, plus a mark-up predetermined by the CDTFA. In some cases, the average market price is the cannabis retailer’s gross receipts from the retail sale. The current mark-up rate is 60 percent. The CDTFA is required to determine the mark-up rate every six months. The rate will be posted on our web site at www.cdtfa.ca.gov.
  • Sales and Use Tax – Sales and use tax applies to retail sales of cannabis and cannabis products after the excise tax has been added. Sales and use tax does not apply to sales of medicinal cannabis and cannabis products where a purchaser provides his/her Medical Marijuana Identification Card issued by the California Department of Public Health and a valid government identification card. Current sales and use tax rates can be found on our web site.
  • Cannabis Tax Permits/Seller’s Permits – Cannabis retailers, cultivators, manufacturers, and distributors making sales must register with the CDTFA for a seller’s permit. Distributors must register with the CDTFA for a cannabis tax permit to report and pay the cultivation tax and cannabis excise tax. A microbusiness licensee is licensed to act as a distributor, among other things, and must comply with all the same requirements as a distributor. If you make sales for resale, you must obtain a valid resale certificate.

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