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City Council votes to grow more sites for cannabis retail

Up to 10 dispensaries, ‘consumption lounges’ would be permitted

When Merced started approving merit-based cannabis retail permits in 2018, they only allowed for four dispensaries, in certain commercial zones, with no on-site consumption.

The mentality, apparently, was to start out slow and see how the local market and residents reacted.

Well, now city leaders are signaling they are ready to take the local weed industry up a notch.

On Monday night, the Merced City Council voted 6-1 to start the process of adding modifications to the existing ordinance that would expand the current number of retail cannabis permits up to 10, and allow for the Council to consider alternative sites for a retail cannabis business under appeal.

Currently, the city provides for five retail permits (the fifth spot was added in 2019). An opening came up after an abandonment, so a permit process for the fifth permit started a year ago, but it resulted in two appeals that are expected to go in front of the council in April.

Increasing the number of dispensary permits in the city, however, is not the only thing being considered for the new draft ordinance. Within a two-step modification process, the City Council also directed staff to include changes for expanding permitted zones, allowing for operations in the downtown business core or “City Center,” allowing for on-site consumption of cannabis products, and creating a more streamlined process for non-retail cannabis permits.

“I would like to consider adding a consumption lounge component,” said Councilwoman Bertha Perez before the vote. “We are providing for hookah lounges, bar lounges, and we do have a [cannabis] retail store on Main Street. It would be nice to be able to go and socialize and have a place for people to consume legally in public. So I hope my colleagues will consider adding a consumption lounge to the permits.”

Councilwoman Sarah Boyle agreed, saying she knew current permit holders were interested in on-site consumption alternatives. Boyle also noted that some specialty restaurants in California are already preparing cannabis-infused food.

“It’s just a whole other industry that we could really tap into,” she said.

Councilman Jesse Ornelas seemed upbeat on the discussion too, and offered a more broad view of the city’s cannabis direction.

“I was also thinking of the ability to allow cannabis-related events like they have in other places,” Ornelas said. “Cannabis Cups [festivals], and things like that. They would give an opportunity to highlight the cannabis industry in the Central Valley — and Merced could possibly be the center of that.”

Councilman Shane Smith voted NO for the vote that included expanding the number of dispensaries after questioning the reasoning behind “10” being the number with regard to the city’s population, and pointing out that there are at least three dispensaries currently in operation in nearby Atwater.

After the vote, Smith commented: “I support the general notion of making it less of an onerous permitting process. I think it was intentionally made onerous a few councils ago. Maybe that’s where we were then. I don’t know if that’s where we are as a society, and a city, now.”

Smith also requested that the new draft ordinance include warnings against any marketing of recreational cannabis products to children.

During public comment on the issue, local cannabis advocate Dwight Larks suggested more citywide openness for cannabis users.

“We have an ordinance that doesn’t allow residents to consume their cannabis in public,” he told leaders. “If somebody is homeless, where do they smoke their cannabis without breaking the law?”

He added later, “Also we talk about economic development. You [City Council] voted in favor of allowing us to be able to buy legal cannabis here in the city, and the public has responded. Millions of dollars of tax revenue for the city to do really good things with. But in the spirit of basic equality, you know, there’s all these bars opening up, and I don’t really drink alcohol, but I do smoke weed, and so I would like a place to go smoke weed in public.”

At the end of the discussion, Councilwoman Perez playfully asked her colleagues if they should consider taking a “field trip” to experience an existing “consumption lounge” in another city where they are allowed.

In the city’s latest application round for a fifth cannabis retail permit within the city limits, nine applications were received. All proposed business owners were subject to a detailed background check by the Police Department in addition to review by the City’s Selection panel, including the City Manager, Chief of Police, and Director of Development Services. The top score was awarded to a project to be located at 1111 Motel Drive — the former Kewl Kats nightclub that many longtime residents might recognize as the Sir James restaurant.

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