Cannabis Dispensaries Rake in Millions for City of Sacramento

CITRUS HEIGHTS, CA (MPG) - During the Public Comment period at the July 14 meeting, the Citrus Heights City Council heard from Gina Oliveras, a Citrus Heights resident and parent of three teenagers. She said that kids “have had it pretty rough” during the pandemic, as a formative time in their lives was significantly disrupted. Oliveras asked the Council to consider forming a “youth-specific committee to allow their voices to be heard. … In order for our amazing city to stay amazing and beautiful and safe, our future-adults-to-be should have a place and voice in its local government.” 

Jim Bobak of Helios, a cannabis distribution company, spoke during Public Comment to ask the Council to consider “developing and implementing a regulatory and tax policy around recreational and medicinal cannabis.” Bobak grew up in the Citrus Heights area, and his company has been operating in the City of Sacramento since 2017, after voters passed recreational cannabis use in California in 2016. Bobak explained that despite Citrus Heights not allowing any cannabis dispensaries in the city, residents are still using it—they either order it from delivery services, travel to dispensaries in other jurisdictions, grow it themselves, or purchase it from the “dangerous, unregulated black market.”

Dispensaries in the City of Sacramento took in over $800 million last year, and taxes on those sales generated $20 million for Sacramento’s general fund. About 60% of sales at Sacramento dispensaries are from people traveling there from neighboring jurisdictions, like Citrus Heights. Bobak said, “I think there’s a crucial opportunity for Citrus Heights to take advantage of serious tax dollars and provide their community great access to cannabis. There’s a lot of mature and successful operators, like myself, who would love to do business in the city that shaped him growing up.”

When approving the Consent Calendar, Councilmember Bret Daniels asked that Items 7 and 8—annual updates to landscape maintenance assessment districts—be pulled for a separate vote. Daniels said, “I just had a longstanding objection to taxing people, just a certain few people that live in a certain neighborhood because of landscaping districts that have been put up around those neighborhoods.” Both items passed 3-1, with Daniels dissenting and Mayor Porsche Middleton absent.

The Council also held a Public Hearing before the final vote to increase the Fire Facilities Capital Impact Fee—which is imposed on new construction within the city to offset the increased demand for services from Sacramento Metro Fire District. The following changes are proposed to the fee schedule: 7% increase for single-family residences, from $1,478 to $1,582; 7% increase for multi-family residential units, from $1,154 to $1,239; 68% increase for commercial buildings, from $779 to $1,310; 29% increase for office buildings, from $1,293 to $1,664; 27% increase for industrial buildings, from $701 to $890; and 28% increase for institutional/other buildings, from $1,237 to $1,585.

There were no public comments during the hearing, and the Council passed the resolution 3-1, with Vice Mayor Tim Schaefer dissenting.

The Council also held the annual Public Hearing to report on delinquent accounts for waste collection through Republic Services and to consider a resolution ordering the collection of delinquencies through the property tax roll, which is administered by Sacramento County. As of this June, there were 1,058 delinquent accounts with a past due balance totaling $407,534.93. With 10% penalty fees of $40,753.49, the amount due totals $448,288.42. Mary Poole of the General Services Department said that the current number of delinquent accounts and the past due balances are within the typical range collected annually.

A notice of the public hearing was published in the Citrus Heights Messenger, and notices were also mailed directly to affected property owners. In August, there will be a final reconciliation period during which delinquent accounts can pay their totals before the final list is submitted to the County to be placed on the tax roll. After the funds are collected by the County through the annual property taxes, the City will forward those funds to Republic Services for repayment. There were no public comments on this item, and the Council voted unanimously to approve the resolution.

City Manager Ashley Feeney updated the Council about the results of the Citrus Heights Police Department (CHPD) fireworks enforcement program over the July 4^th weekend. He said residents submitted 500 reports to the CHPD online, which kept the dispatch line open for emergency calls. And the CHPD seized over 216 lbs. of illegal fireworks.