Santa Rosa cannabis shops await approval as city favors housing

A proposal to eliminate several city positions that would help implement Santa Rosa’s cannabis ordinance is drawing scrutiny from the City Council and marijuana businesses as the city grapples with a backlog of applications to open new pot stores.

Facing a projected budget shortfall of about $14.9 million this year, the City Council is mulling recommendations from staff to save roughly $7.1 million by cutting about ?50 vacant positions.

If some of those positions were filled, those filling them would be expected to work at least part time on cannabis projects. That includes an assistant city attorney as well as a building inspector, city planner and program specialist in the Planning and Economic Development Department.

“I want to make sure those won’t get cut,” Councilman Jack Tibbetts said in an interview this week.

When the council passed its ordinance regulating recreational cannabis in late 2017, it was adding to the city’s existing rules for commercial cultivation, ?processing and sale of medical marijuana in place since February 2016. City officials were expecting an influx of marijuana businesses that would pump $3.2 million annually into the city’s budget, including taxes and fees.

But revenue has been “definitely underwhelming” so far, Tibbetts said. The city is expected to release a report on recent cannabis revenues next week.

No new retail applications have been approved since filing closed April 20, and it will be months before the Planning Commission works through the logjam of retail applications on file. The city has not set a date to begin accepting new requests to sell marijuana to adults, and none of the city’s staffers are solely dedicated to working on cannabis projects. Tibbetts floated the prospect of a cannabis-specific division of city government with dedicated planners, engineers and site inspectors to increase the city’s ability to bolster its cannabis economy.

The sale of marijuana for recreational use in California became legal Jan. 1, a few weeks before Santa Rosa’s local cannabis ordinance took effect. Three existing dispensaries that sold medical cannabis have been the only businesses to gain city approval to sell marijuana for recreational use.

Thirty applications for a permit to sell cannabis to adults in Santa Rosa were still pending as of Friday, according to city data. All came in before the city’s April 20 deadline and have been working through the planning process since.

Later this month, the Planning Commission will hold its first hearing on a retail cannabis use permit application, foreshadowing about two dozen similar hearings over the next four to six months, said Clare Hartman, the city’s deputy director for planning.

Hartman said the city received more cannabis retail applications than expected. When combined with a flood of applications to rebuild homes lost in the 2017 wildfires, the city has received more requests for permits this year than in any year in the last decade.

Housing, a top priority for the City Council, has received more attention than cannabis from the city planning department. As a result, the cannabis permitting process has been delayed by about a month, Hartman said.

The city has been able to “fold in these cannabis applications without delaying our progress on housing applications,” Hartman said, but the approach is still “housing above all else.”

“As housing projects become available for hearings, they’ll make the next agenda,” Hartman said. “Cannabis applications, I might have to meter them out.”

Tibbetts and several other council members are pushing back against parts of the plan, raised by city staff at an October study session, to cut 50 positions, including some to work on permitting cannabis business.

“It does not make sense to me that we would cut income-generating positions,” Councilwoman Julie Combs said.

Council members reiterated that housing was the priority, but Councilmen Chris Rogers and John Sawyer said they were aware of some impatience in the local cannabis business community.

“This process has been lengthy for them,” Sawyer said. “They are anxious to move forward.”

One prospective cannabis retailer ready to move forward is the Citrus Hill team, which wants to open a cannabis business at ?1236 Briggs Ave. Citrus Hill’s dispensary application was the first competitive proposal to earn initial approval in July, but the application has been waiting for a Planning Commission hearing for months.

“We would love to see things going much faster,” said Erin Carlstrom, an attorney for Citrus Hill and former city councilwoman who acknowledged that housing and fire response should take precedence and that staff time is limited.

However, “it has taken longer than we would have hoped,” she said. “I have clients that are evaluating whether to stay in Santa Rosa because of these delays.”