Someday soon, more businesses could grow marijuana in the city of Sacramento than there are Starbucks and McDonald’s restaurants combined.
More than 100 businesses are seeking special permits from the city to run indoor marijuana growing operations. From North Sacramento to South Land Park, and from downtown to the warehouse district near Power Inn Road, the flood of applications touches many corners of the city.
For now, the applications technically cover marijuana for medicinal purposes, and some companies are already growing pot for that purpose under previously approved guidelines. However, commercial production and the sale of recreational pot will be allowed in California beginning Jan. 1, 2018, and city officials expect many of the new businesses will seek to enter that business.
More applications are expected before the end of the year. The city could begin issuing permits for new indoor growing businesses within a few months.
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Reactions to the so-called “green rush” are mixed.
Some residents are trying to block applications for new businesses close to their homes, concerned that the facilities will attract crime and emit strong odors. In the city’s industrial corners, one major business group isn’t objecting to the industry, but has reservations about “the unknowns.”
Joe Devlin, the city’s chief of cannabis policy and enforcement, pointed to Sacramento’s network of 30 medical marijuana dispensaries as “a guiding path,” saying those businesses have largely operated for years without serious issues. But he also acknowledged “there are a lot of unknowns and there are often fears associated with unknowns.”
“We are building measures to ensure that all parts of the cannabis industry will be good neighbors,” he said.
The city is hiring two code enforcement officers who will inspect the cultivation industry. Applicants must provide detailed security plans that could include cameras and guards. Many operations will forgo building signs to avoid attracting unwanted attention. Businesses also have to prove they have the technology in place to limit odors from spreading outdoors.
“I expect that not every location that is proposing (a business) is going to be an appropriate location,” Devlin said.
A city zoning administrator will decide whether the proposed cultivation businesses are in permitted areas. Devlin’s office will then approve or deny business permits based on whether applicants can meet security and technology requirements to be “good operators,” he said.
Growers and dispensaries are looking to expand or open businesses around the state. At the same time, cities across California are creating new permitting systems to take advantage of marijuana tax revenue. In Sacramento, the city anticipates the industry could eventually generate as much as $15 million a year in new tax revenue.
“There’s a mad rush to get in city applications before the end of year,” said Alicia Darrow, a managing partner of 8516 Fruitridge LLC, which submitted a cultivation permit for the building.
Darrow, who for the last 16 years has been opening up dispensaries and cultivation businesses across the state, has applied for only one cultivation permit in Sacramento. However, she isn’t ruling out buying more buildings in Sacramento for cultivation facilities.
Other groups have been quick to capitalize on Sacramento’s ideal location near major freeways and its abundance of affordable manufacturing districts.
Harvest Law Group, a Sacramento-based firm representing growers statewide, submitted 12 cultivation permit applications on behalf of would-be cultivators in the first two days the city began accepting them. According to founding attorney Melissa Sanchez, the group plans to submit 19 in total.
“We want to be the first when it comes to it,” Sanchez said.
Sanchez said she has been working with the city since last year, helping the City Council draft ordinance language that was “good public policy.” Cultivators, she said, should be good for their communities and for their neighbors, not only giving the city tax dollars, but also leasing blighted or vacant warehouses and buildings that are now vacant or blighted.
Sacramento city code allows indoor cultivation in agricultural areas and some commercial and manufacturing zones.
“The goal of this ordinance on commercial cannabis is to get it where it should be in manufacturing zones, rather than residential (ones),” she said. “It doesn’t belong there.”
For Tina Echols, the city’s green rush is coming too close to her quiet neighborhood in North Sacramento.
Applicants want to convert three warehouses on tiny Kathleen Avenue into indoor cultivation operations. A row of modest homes stands directly across the street from the warehouses and the surrounding blocks are filled with houses. In the past, the warehouses have been used by landscape companies, tile companies and storage. At least one of the buildings is currently vacant.
Echols is already frustrated with the city’s response to “slumlords” and other nuisances in her working class neighborhood where many families have lived for generations. Now she’s worried about security threats and strong odors generated by three marijuana operations.
“We can’t even get code (enforcement) to come and respond, so how are they going to protect us from marijuana cultivators who aren’t complying?” she said. “Who’s going to help us, who’s going to protect us?”
Illegal marijuana growing operations have been the targets of violent crime throughout Sacramento and Devlin said as many as 1,000 of those unsanctioned operations are in the city. However, he said large cities that already allow legal cultivation businesses, including Portland and Denver, have not seen a spike in crime.
The largest operation on Kathleen Avenue would be run by Golden Earth Partners, based in the San Fernando Valley. It would operate from 9 a.m. to 9 p.m. and use 21,360 square feet for marijuana cultivation, according to its application.
Golden Earth included plans for odor control, community relations and wastewater management in its application with the city.
“Our team has already made substantial investments into the building,” the company wrote. “These investments will help our neighbors and reduce crime in our community.”
The Power Inn Alliance, representing 11,000 property owners in the warehouse district in southeast Sacramento, isn’t opposed to the marijuana cultivation industry. But it still has some reservations because of “unknown” factors involved in the budding industry, said Tracey Schaal, executive director of the group.
“So our hope is that by legitimizing the industry and going through the conditional use permits and really adhering to the standards that other businesses do, it’ll be helpful to the district and the city,” she said.
That area of the city is already home to some indoor operations the city knows about – and many that were running under the radar.
“We’ve had issues with certain facilities, and we’ve had facilities operating for several years that quite frankly we didn’t know (about),” Schaal said. “That’s a great thing that we were never alerted to odor concerns or suspicious activity.”