Greetings, lovely readers. I am the Independent’s new cannabis writer, and I will be writing a monthly piece on all things cannabis-related in the Coachella Valley.
Who am I, and how am I qualified to write about such a huge topic?
I am currently the vice president of the Coachella Valley Cannabis Alliance Network, a membership organization made up of people and companies supporting and doing business in the cannabis supply chain. Our mission statement: “Connecting Communities Through Cannabis Education and Advocacy.” Sometimes I simply say we are the chamber of commerce for weed.
In addition, I host a weekly radio show/podcast on the iHub Network called The Buzz. The show provides a wide variety of information to listeners about cannabis products, cannabis policy and the business of cannabis. (You can listen on your computer here or on your Apple device here.)
Finally, I work part-time as the cannabis liaison for the city of Coachella. In that role, I help ensure that the cannabis businesses operating in the city are in compliance with all rules and regulations—and that they continue to thrive.
Let’s begin with a look at how the Coachella Valley has (partially) embraced the new cannabis industry. Out of the nine cities that make up the valley, five permit some or all of the activity allowed and regulated by state law. Those cities: Desert Hot Springs, Palm Springs, Cathedral City, Coachella and Palm Desert. The other four cities remain in what we call “a ban”—that is, their city councils are not yet interested in allowing cannabis businesses to operate inside their borders.
Why the city-to-city differences? Proposition 64—which allows recreational, adult-use of cannabis—was approved by California voters in 2016. It allows for “local control,” which means that each municipality can choose whether or not to allow cannabis businesses in their area, and can regulate personal use. Allowing local control was an important part of gaining support for Prop 64—but the consequence is that today, about 65 percent of California’s municipalities still do not allow cannabis businesses.
Desert Hot Springs was one of the earliest cities in the state to allow every part of the supply chain into the city with open arms. In October 2014, the city passed an ordinance to create regulations and allow medical cannabis growers, manufacturers and co-ops to set up shop. The business of cannabis—and the taxes paid to the city as a result of those businesses—have helped Desert Hot Springs go from near bankruptcy to a becoming a place of growth and opportunity. In fact, DHS was the first city to allow cannabis hotels and cannabis entertainment facilities, in a quest to prepare for a wave of “canna-tourism.”
Palm Springs was also a fairly early adopter of medical cannabis businesses, and has been open to allowing retail stores along Palm Canyon Drive. The city has also embraced the idea that people need a legal place to consume what they may have purchased, and has allowed cannabis lounges to be built alongside retail. On-site consumption and canna-tourism are two reasons the Coachella Valley stands out as a leader in the industry.
However, things aren’t perfect. More and more Southern California cities, some within a short drive, have started to allow cannabis businesses—presumably because their elected officials saw that the sky didn’t fall in the cities that first allowed it, and because consistent tax money is being collected from these new businesses that help fund public safety, community programs, education and infrastructure. Of course, as more cities license businesses, that means more competition—and to stay competitive, cities need to attract businesses with lower taxation, easier permitting processes and better marketing opportunities.
The cannabis industry has to pay all of the regular taxes that other businesses pay, like sales and use taxes. In addition, cannabis businesses are subject to special taxes created solely for the industry. For example, Cathedral City charges a 10 percent gross-receipts tax on retail stores (in other words, 10 cents for every dollar spent), and $15 per square foot on cultivation facilities. Palm Springs charges the same 10 percent gross-receipts tax on retail, but has different rates for cultivation depending upon the zone in the city where the cannabis is grown. Desert Hot Springs just lowered its cultivation tax from $25.50 per square foot for the first 3,000 feet to $10.20 per square foot for all facilities. You get the idea: More SoCal cities coming online means the cities here in the valley must begin to look at how they compare, and must remain attractive to new businesses.
There are so many interesting people, places and things to talk about in the brave new world of cannabis in the Coachella Valley. I hope to bring you some of those in the coming months, and I look forward to hearing from you.
Jocelyn Kane can be reached at email@example.com.