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Last updateTue, 18 Sep 2018 1pm

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.

Published in Cannabis in the CV

House of Lucidity Opens in Cathedral City

The House of Lucidity, Cathedral City’s newest dispensary, officially opened with a ribbon-cutting—complements of the Greater Coachella Valley Chamber of Commerce—on May 1.

The 10,000 square foot facility is located at 36399 Cathedral Canyon Drive. In addition to the gorgeous dispensary—which features black-and-white photos of celebrities including Frank Sinatra—House of Lucidity also has a cultivation facility and an extraction lab.

House of Lucidity is open from 4 to 9 p.m. daily. For more information, call www.houseoflucidity.com.


City of Coachella to Host Cannabis Summit

The city of Coachella is bringing in a lot of big names for its SoCal Cannabis Summit, taking place at the Fantasy Springs Resort Casino on Monday and Tuesday, June 24 and 25.

The summit will begin with a cultivation and dispensary bus tour, followed by a reception on Monday. On Tuesday, the summit will feature speakers including Riverside County District Attorney Michael Hestrin, California Bureau of Cannabis Control Chief Lori Ajax, California Treasurer Fiona Ma, and many other political leaders and marijuana experts. An exhibit hall will also be open to the public with free admission on Tuesday.

Tickets for the bus tour are $50, while summit tickets are $75. For tickets or more information, visit coachellacannabissummit.com.


Marijuana Revenues Disappoint Gov. Newsom

Revenues from marijuana growth and sales are bringing millions of dollars into state coffers—but not nearly as much as the state anticipated.

According to a May 23 news release, the cannabis industry—via the state’s cannabis excise tax, cultivation tax and sales tax—paid $116.6 million to the state in the first three months of 2019, according to first-quarter tax returns, due April 30, which had been submitted so far. That’s up slightly from the $111.9 million paid during last quarter of 2018.

Earlier in May, Gov. Gavin Newsom had to scale back cannabis-tax revenue projections significantly—cutting $223 million from the amount expected to be collected by June 2020.

According to the Associated Press, the reasons for the disappointing sales included the thriving illegal market, as well as the state’s struggles with licensing and regulation.

Newsom also blamed some states and counties for not welcoming legal cannabis into their communities.

“We knew (some counties and cities) would be stubborn in providing access and providing retail locations and that would take even longer than some other states, and that’s exactly what’s happening,” he said, according to the Associated Press.

Published in Cannabis in the CV

No, Jefferson. Let it go …

Our evil elf of a U.S attorney general is whining about pot again, this time in a letter asking Congress not to renew the Rohrabacher-Farr amendment.

The Rohrabacher-Farr amendment, which became law in December of 2014, prohibits the Department of Justice from spending any federal funds to interfere with state medical cannabis laws. It must be renewed each year—and Sessions is requesting it not be renewed this time around.

“I believe it would be unwise for Congress to restrict the discretion of the department to fund particular prosecutions, particularly in the midst of an historic drug epidemic and potentially long-term uptick in violent crime. The department must be in a position to use all laws available to combat the transnational drug organizations and dangerous drug traffickers who threaten American lives,” Sessions wrote in the letter, first made public by Tom Angell of MassRoots.com.

This comes at a time when an overwhelming majority of Americans (including 65 percent of police officers!) are in favor of some form of legalization, and more and more states are starting to legalize marijuana for recreational use.

One of the law’s namesakes expressed annoyance with Sessions’ letter.

“Mr. Sessions stands athwart an overwhelming majority of Americans and even, sadly, against veterans and other suffering Americans who we now know conclusively are helped dramatically by medical marijuana.” said Rep. Dana Rohrabacher, a Republican who represents parts of Orange County, in a statement to the Washington Post.

Opioids are at the center of the worst drug epidemic facing Americans today—while marijuana is decidedly not. However, to Sessions, there is virtually no difference between opioids and marijuana, considering he recently described pot as just “slightly less awful” than heroin. Of course, the American Journal of Public Health published a study in September 2016 citing evidence that opioid use is lower in states with legal medical marijuana, but what do they know with their “statistics?” Pesky facts …

The DOJ actually challenged the amendment under President Obama, but it was upheld by the 9th U.S. Circuit Court of Appeals. This ruling leaves it up to Congress to decide whether to remove Rohrabacher-Farr from the yearly appropriations bill—but the amendment has received strong bipartisan support ever since it became law. Conventional wisdom dictates that Congress would be reluctant to go against the clear will of the people, but how often does conventional wisdom come into play in Washington, D.C., these days?

California is having none of this nonsense, and is making moves to become the first sanctuary state for cannabis. In anticipation of a legal showdown with Sessions’ DOJ, the State Assembly passed AB 1578 on June 1; the bill would prohibit state and local law enforcement from helping the feds enforce federal prohibitions against those adhering to California state law. The bill by Assemblyman Reggie Jones-Sawyer, a Los Angeles Democrat, passed in a close 41-33 vote.

The measure faces stiff opposition by law enforcement and Republicans, for reasons ranging from interference in federal and local interagency cooperation regarding other crimes, to claims that it violates federal law.

“The hubris of California Democrats believing they can flout federal law on immigration and drug policy is beyond words,” said Assemblyman Travis Allen (R-Huntington Beach) during the floor debate.

Jones-Sawyer’s retort: “AB 1578 ensures that our limited local and state resources are not spent on federal marijuana enforcement against individuals and entities that are in compliance with our laws.”

Rep. Rob Bonta (D-Alameda), a co-author of the bill, said: “People who are compliant with California law and operate within the legal cannabis market should not have to fear that a state or local agency will participate in efforts to punish or incarcerate them for activity that the state and its voters have deemed legal,” according to a Los Angeles Times report.

The Tenth Amendment Center, a constitutional-law and states’ rights advocacy group, claims there is solid legal standing for the measure. “Provisions withdrawing state and local enforcement of federal law in AB 1578 rest on a well-established legal principle known as the anti-commandeering doctrine. Simply put, the federal government cannot force states to help implement or enforce any federal act or program,” founder Michael Boldin said in a post on the group’s website.

Jones-Sawyer said the bill could be edited to make it clear that cooperation in moving against illegal operations according to state law could continue. A Newsweek report estimated that 1,400 dispensaries are operating illegally in Los Angeles alone, and Jones-Sawyer would like those businesses shuttered, while protecting those adhering to local and state law.

The bill faces an uncertain future as it moves to the State Senate.


MEANWHILE, HERE IN THE VALLEY…

The City Council of Cathedral City recently passed a moratorium on new dispensaries south of Interstate 10.

The city of 53,000 has 10 licensed dispensaries operating, with another opening soon—that’s around 4,800 residents per dispensary. By comparison, Palm Springs has six dispensaries servicing 44,552 residents (or 7,452 residents per dispensary). The move is designed to help ensure the continued success of existing dispensaries in what is a comparatively saturated market.

Cathedral City dispensaries may also see fewer customers in the future, as Palm Desert and Coachella are slowly moving toward allowing retail cannabis businesses.

The measure passed 3-2, with Greg Pettis and Shelley Kaplan opposing.

Published in Cannabis in the CV