Last month, I examined the economic boom expected in the city of Desert Hot Springs as a result of its decision to embrace the cannabis industry. It was the first Southern California city to allow legal cultivation—and economic opportunities from the cannabis industry are helping turning the city around.
As for the other eight Coachella Valley cities … almost half of them so far have yet to welcome any sort of marijuana businesses.
The five that have opened the door in some way to the cannabis industry understand that it can help create a diversified economy that is less dependent on tourism and the resulting service-oriented businesses. Anyone who owns a business in the Coachella Valley knows that summers can be tough—but the new cannabis industry offers more year-round business and increased professional opportunities.
Dirk Voss, a lead cannabis consultant for Urban Management Strategies, is a former chairman of the Desert Hot Springs Planning Commission. He was directly involved in the approval processes for many of the cannabis businesses in the city and has watched the industry evolve throughout the valley. Voss said the cannabis industry can offer cities a “multiplier effect,” because the year-round economic stability of cannabis bolsters other business sectors, including entertainment, recreation, housing and more.
Because Coachella Valley cities have each embraced—or eschewed—cannabis in different ways, Voss predicts each city will eventually have its own cannabis “flavor” or “culture.” For example, Palm Springs has approved lounges, which makes sense for the city and its downtown tourist culture. The city is positioning itself to become a cannabis tourist destination based on its distinct assets, much like Desert Hot Springs has by promoting health and its mineral spas.
In contrast, Cathedral City has positioned itself for large-scale cultivation. The city has utilized vacant land and existing yet unoccupied shopping centers for such facilities, helping revitalize portions of Date Palm Drive, Highway 111 and Perez Road. Because Cathedral City had a lot of vacant buildings—with existing utilities and infrastructure—new marijuana businesses were able to save money by locating there. In other words, city leaders found a great way to utilize the city’s specific assets to accommodate the cannabis industry.
The city of Coachella has taken a different approach, mandating that projects have a five-acre minimum and be part of a master-plan development with specific cannabis zoning. Voss said these mandates have presented challenges to some interested cannabis businesses, “especially since power has been an issue. However, the city is evolving and expanding its plan to get the best economic development possible. The city has some catching up to do, but it is also in line to have a culture of major cultivation opportunities in the city.”
Palm Desert, meanwhile, has taken a slow, methodical approach to introducing cannabis businesses to the city—limiting the number of licenses to allow for slow growth. While this means the city may not see the economic windfall that, say, Palm Springs and Desert Hot Springs will, it also means the cannabis industry can be carefully incorporated into the city culture, thus avoiding over-saturation and allowing for manageable growth while the cannabis industry evolves.
At this point, cannabis businesses are not allowed in the cities of Indio, La Quinta, Indian Wells and Rancho Mirage—and this isn’t necessarily a bad thing. Because surrounding or nearby cities have embraced cannabis, residents and visitors can still enjoy the benefits of the cannabis industry without dealing with the hassles and costs of regulating it in their cities.
Because the cannabis industry is so new, it’s also somewhat unstable—meaning there may be growing pains for the cities that have embraced marijuana. Voss cautions some organizations will be bought out; some will close; and others will try to sell their licenses while the industry adjusts. It is crucial, according to Voss, that each city “design their ordinances and codes around their ability to adapt in an industry that is constantly changing.”
There is no doubt that marijuana can help the Coachella Valley evolve from a seasonal tourist-driven economy into an area with a stronger year-round economy.
“Each city will eventually find its fit, which will only lead to an overall economic boom within the entire Coachella Valley,” Voss said. “The industry is naturally designing its own characteristics for each city based on the needs, wants and use of cannabis by its residents.”
Robin Goins is a business consultant for DR.G Consulting and works extensively in the cannabis industry in the Coachella Valley. For more information, visit www.drrobingoins.com.