The Coalinga City Council voted 4-1 on Thursday to immediately allow commercial marijuana cultivation within city limits.
Councilman Ron Lander cast the lone no vote. The ordinances required a four-fifths majority to pass.
The council also approved the sale of the city’s dormant prison, Claremont Custody Center, to Ocean Grown Extracts for $4.1 million. Ocean Grown will transform the prison into a medical cannabis oil extraction plant.
This sale will immediately bring Coalinga’s general fund into the black. City Manager Marissa Trejo said Coalinga was $3.3 million to $3.8 million in debt.
The City Council unanimously approved medical marijuana cultivation, deliveries and dispensaries in January. The council backtracked slightly after an outcry from church groups, community members, the Coalinga-Huron Joint Unified School District and Fresno County Sheriff Margaret Mims. After several months of special meetings and workshops designed to educate residents about the medical cannabis industry, it moved forward once more.
In March, the council began negotiating with medical cannabis oil manufacturer Ocean Grown Extracts for a deal that would sell an empty prison, the Claremont Custody Center, to the grower and allow it to operate in Coalinga. The deal as first proposed would pay the city around $2 million per year in rent and fees.
Later that month, the council voted 4-1 to create the ordinances necessary to cultivate marijuana within the city. City Attorney David Wolfe said it would take at least several months to draw up the new laws.
A possible ordinance allowing medical marijuana dispensaries – businesses that actually sell cannabis to patients – or deliveries to patients within Coalinga could be discussed later. Both remain illegal as of Thursday.
On June 23, Wolfe asked the council to approve urgency ordinances to legalize cultivation immediately. It will take time to retrofit Claremont into a cannabis oil manufacturing plant, he said. The ordinances would also allow Ocean Grown to begin hiring for the 100 jobs it pledged to fill with local applicants.
Wolfe also expressed concern over Ocean Grown possibly lagging behind other established cultivators, who are already beefing up their operations in advance of a November ballot measure that would legalize recreational marijuana use in California.
On Thursday, Ocean Grown was all smiles. Co-owner Casey Dalton said she hopes the business will be up and running within six months.
“We’re thrilled to be able to offer 100 jobs and make safe medicine available for patients,” she said. “We appreciate Coalinga taking a chance not only on us, but on the industry.”
Dalton said Ocean Grown received more than 200 applications from local residents during a recent job fair for its proposed cultivation operation.
Fellow Ocean Grown owner Kelly Dalton, Casey’s brother, said the silent approval from the crowd showed that the community understands that medical cannabis is a medicine.
“The truth of the plant is our best evidence,” he said.
The language of the new ordinances lays out strict requirements for Ocean Grown and any other companies interested in cultivating marijuana in Coalinga.
The owner must assume liability for the operation, meaning it would be solely responsible if the facility has any legal entanglements with individuals, law enforcement agencies or the U.S. government. Marijuana remains illegal under federal law.
All employees and private contractors must pass a background check and receive a permit from the city in order to work at a cultivation site. The owner must keep all of this on file with the Coalinga Police Department.
The facility must be gated, locked and closed to the public. It must have 24-hour video surveillance, and the Police Department must have full access to video feeds.
Cultivation operations cannot post signage. They must also take odor control steps to keep any cannabis smell from escaping.
Electronic tracking devices must be fixed to all cannabis plants.
The operations must be in full compliance with all building and fire safety codes. All requirements must be checked off by the police chief, fire chief and city planner at least 60 days before opening.
Permits can be revoked if a business owner is not compliant. That owner can appeal any punishment with the City Council.
The ordinances also establish a property tax that will pay the city $25 per square foot for the first 3,000 square feet and $10 per square foot for any space after that for each medical marijuana cultivation. Claremont is about 77,000 square feet, but the city kept a portion of the prison grounds.
The new laws also note one potential snag for medical marijuana cultivators: The U.S. Bureau of Reclamation wrote the city a letter saying it will report Coalinga should any water be directed to the facility.
Wolfe said the city believes it is a lawful use of water, but it will deny Ocean Grown or any other cultivator city water should the federal government threaten to shut off the supply. He said the city would work with Ocean Grown to find a new water supply should this happen, but its new laws do not require the city to provide cultivators with water.
Huron could follow suit
According to the Huron City Council’s monthly agenda, the council heard a medical marijuana presentation July 6. Lake Tahoe defense attorney Jacqueline Mittelstadt and Dr. Douglas Kerr explained why patients use medical cannabis.
Huron City Manager Jack Castro said the city has made no decision to move forward. It is still compiling information.
Huron is about 20 miles east of Coalinga in Fresno County.