cannabiz biz

At its Sept. 3 meeting, the Sebastopol City Council declined to consider amending the cannabis section of the city’s zoning ordinance, effectively putting an end to a Hollywood-based cannabis company’s effort to break into the Sebastopol cannabis market.

Element 7, which calls itself “California’s fastest growing cannabis retail company,” had asked the city to consider amending its zoning ordinance to allow another cannabis dispensary in town and to allow cannabis manufacture and distribution within a commercial zone.

Element 7 had its eye on the former AmeriGas site at 845 Gravenstein Hwy. North. According to the city’s staff report, the company was interested in operating a variety of cannabis businesses from that location, including “a storefront retail cannabis dispensary; cannabis delivery; cannabis manufacturing; and cannabis distribution.”

Sebastopol’s Comprehensive Cannabis Ordinance, adopted in March 2018, sets a cap of two retail storefront dispensaries (these have already been granted to Sebastopol’s two pre-existing licensed medical dispensaries) and a cap of three delivery licenses, one of which is still available. Manufacturing, distribution and indoor cultivation are allowed with no specific cap on numbers, but only in areas zoned for manufacturing.

In the public hearing portion of the discussion, two employees from Sparc, one of the existing dispensaries, got up to speak against raising the cap on dispensaries.

Craig Litwin, a former city council member now CEO of the 421 Group, a cannabis consulting firm, also spoke. Though he didn’t take a position on Element 7, he urged the city to take another look at its ordinance, with an eye to increasing the number of delivery services and legalizing in-store consumption, thus paving the way for cannabis tasting rooms.

Sebastopol has always been ahead of the curve,” Litwin said. “When I was on the council, I co-authored our dispensary ordinance. We’re still ahead right now in that multiple members of this council have talked about not wanting to put in a special tax so we can stay competitive. I think that’s very important because we are overtaxed as an industry, and the black market is thriving. This is a very difficult time to do things the right way.”

“We’ve fallen behind on the curve in that we don’t allow for onsite consumption in ways that cities like Cloverdale do … One of the biggest things that we could do for our town is to tackle onsite consumption in tasting lounges where people can responsibly enjoy the pleasure of cannabis and learn about it — and that sales tax stays here in the city.”

In the end, the council voted unanimously not to revisit the cannabis ordinance — not for Element 7 and not as a favor to Litwin, though the council did promise to include the cannabis ordinance as a part of their annual city services review.

The council also directed staff to look for some kind of mechanism that would allow the council to consider applications based on their merits, rather than “first come, first serve,” which is how the ordinance is currently written.

“It seems like what we’re doing now — having two dispensaries — is working pretty well,” said Councilmember Una Glass, who said she didn’t want to see “a corporate race to the bottom,” where the company with the deepest pockets would win out, crushing smaller, local companies.

Councilmember Patrick Slayter agreed.

“This council and the council before us and the council before that have all had discussions about formula businesses (also known as chains) and what type of businesses are preferred in the city of Sebastopol. And time and time again, our councils have said we prefer local,” he said.

But local or not, no one on the council was inclined to budge on the numbers cap.

“I look to our history and cities of similar size — Cloverdale and Cotati — and I’m thinking that for communities of this size, two dispensaries are just fine,” Councilmember Sarah Gurney said. “Two is working, so I don’t see a need for three.”

“I feel like we got it just right,” said Mayor Neysa Hinton.

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