CITRUS HEIGHTS, CA (MPG) - At the Feb. 8 meeting, the Citrus Heights City Council held a study session to consider the possibility of modifying existing regulations regarding the sale of cannabis (marijuana) within the city.

Medical cannabis use was approved by California voters in 1996 with the passage of Proposition 215 and recreational use was approved in 2016 with Proposition 64. Despite the use of cannabis being permitted by state law, Citrus Heights has maintained a ban on any cannabis dispensaries. (However, the city cannot ban residents from ordering cannabis deliveries from outside city limits.)

Changing the municipal code to allow cannabis dispensaries would bring new businesses and jobs to Citrus Heights and meet the city’s goal of diversifying for a resilient economy by bringing in additional revenue through two possible approaches. One option is a voter-approved cannabis tax, which would allow for a local tax rate decided by the City Council that would have to be approved by the voters on the November 2024 ballot. Without a specific cannabis tax, any approved cannabis dispensaries in the city would just be subject to the standard taxes. Another option is a development agreement between the city and any potential cannabis business that outlines the terms of operation and specific fees that would generate immediate revenue for the city.

Within the Sacramento region, cities with cannabis dispensaries include Sacramento, Davis, Dixon and Colfax. All of those have a cannabis tax measure approved by voters, with varying levels of taxes imposed. Sacramento has a 4% tax rate and anticipates $22 million in revenue from dispensaries in the 2023-2024 fiscal year. Davis, which has a population closer to that of Citrus Heights (approximately 67,000 and 87,000, respectively), has a cannabis tax rate of 10% and expects to receive $2.3 million in revenue this fiscal year.

Cannabis dispensaries are heavily regulated and have specific hours of operation (6 a.m. to 10 p.m.), age requirements (18 for medical, 21 for recreational), and location requirements (600 feet from schools, daycares and youth centers).

If City Council wanted to move forward, staff suggested working on various public outreach to get the public’s opinion about a possible tax measure on the November 2024 ballot. Areas in the city along the Highway 80 corridor would be targeted as possible locations for dispensaries, since those would potentially bring in more customers with the easy freeway access and dispensaries could fill some of the many vacant commercial properties in the city.

More than a dozen people spoke on this item during Public Comment, with the majority speaking in favor of Citrus Heights allowing cannabis dispensaries. Owners and operators of various dispensaries around the region shared how their businesses provide safe access to cannabis for those who want to use it both medicinally and recreationally. They said that they are dedicated community partners, helping improve lives and creating jobs for residents. The businesses also increase foot traffic to nearby shopping areas, bringing more customers to the surrounding businesses. And they said areas with cannabis dispensaries actually see a decrease in crime due to their dedicated security officers and advanced security camera systems.

Social activists spoke in favor of the idea, stating that cannabis dispensaries are a way for minority entrepreneurs to create thriving businesses that can pull families out of poverty. Tax revenues from dispensaries can also be earmarked specifically to support underserved communities.

Military veterans also benefit from safe access to cannabis, said Sean Kiernan, CEO of Weed for Warriors, which advocates for disabled veterans. He said there is an epidemic of suicide and drug overdoses among veterans but those rates are significantly lower in places with cannabis dispensaries.

“Cannabis is saving lives where it’s available,” Kiernan said and added that people in Citrus Heights are already buying cannabis, whether they are traveling out of the area to purchase it legally, having it delivered from outside the city or, more likely, purchasing it on the black market.

“The drugs are available in our schools today,” Kiernan said. “If we want to get rid of that, you’ve got to get rid of the black markets. And the only way you do that is to create a legal, regulated marketplace.”

He urged the Council “to embrace what makes this country great and that’s our entrepreneurs who are out there providing consumers what they want.”

Some residents also supported the idea because it would bring new businesses, new jobs, and new tax revenue and it would bring more customers to the area, which would benefit existing businesses.

Citrus Heights resident Natalie Price said, “It will bring in new tenants to hard-to-rent locations and bring with it some wins for the community.”

She said cannabis use is already permitted for those of legal age, so “cannabis is already in our city, it’s in our neighborhoods.” It would allow access to medicinal marijuana for those in the community who desperately need it, such as those who deal with post-traumatic stress but cannot function on pharmaceutical drugs.

However, some residents spoke against the idea. Kathy Morris said she was “pro-business but not this business.”

Former councilmember Al Fox said, “There is no evidence in current publicly-available data that the sales tax income would have a significant positive impact on our city.”

Former councilmember Jeannie Bruins said that when she was a member, City Council considered this issue and “very thoughtfully” chose to prohibit dispensaries in the city, in order to protect businesses and citizens. Since that time, Bruins said, rates of crime and homelessness have increased, so retaining the municipal codes that ban dispensaries is now “even more important.” Bruins said everyone she has spoken to about this issue is against it: “This is not something we want in Citrus Heights.”

Councilmember Tim Schaefer said, “I think we should explore this as an option. … This issue is still on the table for me, just because, from a business and a revenue standpoint, I’d like to look at the data.” Schaefer said he agreed with a lot of the public testimony: “Cannabis is already here. … If we decided to dismiss this idea right off the bat, cannabis is still here. And so, I want to explore what we can do. … I see this as an opportunity that we should look at and analyze it and make an informed decision.”

Councilmember Porsche Middleton said she listened carefully to all the public comments, and “based on the support that I’ve seen today, I am comfortable with…continuing the conversation, exploring where this could take us and where it could go. I understand that before I was on the council, we might have made a different decision but I do believe that our community has changed and this is a great opportunity for us to fill in some of those gaps. And also, after hearing some of these powerful stories about how cannabis has changed the lives of individuals for the better, it’s definitely worth looking into.”

Vice-Mayor Jayna Karpinski-Costa agreed that the community has changed, and said she toured a dispensary and was impressed: “They are just like a regular store.”

Karpinski-Costa said she wants to see the data, get feedback from industry experts and hear from the Citrus Heights Police Department about possible public safety concerns. She was in favor of moving forward to further explore the idea.

Councilmember MariJane Lopez-Taff said she grew up with a parent who was addicted to cannabis, so while she acknowledged that it can improve some people's lives, she has also seen the negative impact firsthand. She agreed with the residents who spoke in opposition: “This is not a good idea for our community.” While she is “pro-business all the way,” Lopez-Taff said, the residents she has spoken to in her district do not support this.

Mayor Bret Daniels wanted to clarify that while the city can always find a use for additional revenue, the city is doing well financially with healthy reserves, so considering this idea is not just about potential sales tax revenue.

Daniels stated that while he supports the use of medical cannabis, he wishes no one would use it recreationally. While he has never tried cannabis himself, he does enjoy the occasional alcoholic beverage, so “who am I to say that that’s OK, but you can’t decide to relax with your chosen substance? … I think we’ve heard consensus tonight to move forward.”

The next Citrus Heights City Council meeting is scheduled for Feb. 22.