Coalinga council to vote on medical marijuana cultivation at former prison

Coalinga City Council considers plan to grow pot in closed prison

The Coalinga City Council is proposing using its closed Claremont Custody Center, located on the edge of town, as a marijuana oil production center.
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The Coalinga City Council is proposing using its closed Claremont Custody Center, located on the edge of town, as a marijuana oil production center.

After three hours of proposals and fierce debate, the Coalinga City Council directed its staff Wednesday evening to prepare an official ordinance to allow commercial medical marijuana cultivation at Claremont Custody Center.

The vote passed 4-1, with Councilman Ron Lander opposing.

The council also voted 4-1, with Councilman Steve Raine opposing, to ask the staff to draft a ballot measure that would let Coalinga voters decide whether to allow medical cannabis dispensaries within the city.

The council unanimously approved a measure to draft a ballot initiative that would allow the city to tax any of these operations, should they become legal.

Coalinga’s path to medical marijuana dispensaries and cultivation initially appeared to be simple but has since grown murky.

In January, the Coalinga City Council voted unanimously to allow medical cannabis dispensaries, cultivation and deliveries. The council said the decision was primarily a financial one, but several members expressed an interest in helping local patients get access to medical marijuana. Most drive over an hour to the nearest legal dispensary in Goshen or buy it from people selling out of their homes or cars.

In February, more than 100 residents blasted the council’s decision at its monthly meeting. Fresno County Sheriff Margaret Mims was joined by the local school and parks and recreation boards, as well as a smattering of local religious leaders and community members, in opposing the new ordinances. After fierce debate, the council backed off. It set up the March 30 workshop as a way to educate the community on medical marijuana, as well as allow for more discussion on the subject, before making a decision.

That didn’t stop the city from further weighing its options, however.

Mayor Ron Ramsay and City Manager Marissa Trejo fielded the proposal from Southern California-based Ocean Grown Extracts to cultivate medical marijuana at the former prison, which would bring in at least 55 jobs in the first year.

The council appeared to be in favor of the proposal and invited company President Casey Dalton-Schutt back to Coalinga to negotiate a deal and promote the plan to residents at Wednesday’s workshop.

About 75 people crowded into Coalinga City Hall on Wednesday night to hear about these issues and others surrounding medical marijuana. The night began with two scheduled presentations.

HdL Companies official David McPherson addressed the council. HdL specializes in auditing and offering financial advice to around 160 cities in California – including Coalinga.

McPherson read from a long list of credentials, including being the first city administrator in America to tax and regulate medical marijuana while working with the city of Oakland.

He advised the council on how to write the language of any potential medical marijuana ordinances. These included using a square footage tax for cultivation operations and a gross receipt tax on dispensaries, which allow for maximum revenue.

McPherson also dropped a bombshell on the meeting.

When asked about possible revenues, McPherson was cagey about providing raw numbers.

Lander asked him about Adelanto, a city in San Bernardino County that recently allowed commercial cultivation.

“I read in the Orange County Register that they (Adelanto) currently have six cultivations moving forward,” Lander said.

“Twenty-six,” McPherson interjected. His company also represents Adelanto.

“I’ve heard the revenue would be more than their general fund,” Councilman Nathan Vosburg said.

“That’s about right,” McPherson said, causing a gasp from several councilmen and about half of the audience.

McPherson also discussed a sticky issue surrounding medical marijuana – cash handling. Because such operations are illegal under federal law, some believe that cultivations and dispensaries cannot use federally regulated banks.

“This is the question I’ve been asked about most in the last six years,” he said. “Cash is a problem – I’ve known that ever since a cultivator gave me a million dollars in a backpack once.”

He said that some banks have gotten around this by certifying individual operations to bank with them.

Dalton-Schutt jumped in next.

“We won’t be showing up with backpacks full of cash,” she said, drawing a laugh from the crowd. “We write checks.”

Dalton-Schutt then gave a presentation outlining the specifics of her plan.

She stressed that Ocean Grown deals only in manufacturing a product.

“We are not in business with dispensaries or doctors,” Dalton-Schutt said.

She explained that every seed they plant has a bar code on it that is tracked throughout cultivation, manufacture and delivery. The packages sent out are locked and can only be opened by the receiving dispensary – not the delivery driver or other employees.

Dalton-Schutt said that Ocean Grown plans to purchase Claremont and would assume full liability for any problems with federal officials. Should it be raided – which she and McPherson believe to be extremely unlikely – the city would not incur a financial loss.

She added that Claremont was an ideal location. Many security measures – razor-wire fences, gates, security checkpoints, surveillance – are already in place. Coalinga itself is right off Interstate 5 and centrally located between San Francisco and Los Angeles, she said.

Dalton-Schutt said that if the city allows cultivation and moves forward with the Claremont sale, she could be up and running within nine months.

Coalinga police Chief Michael Salvador, who prepared a lengthy report opposing the medical cannabis measures in January, appeared to have had a slight change of heart.

“My mission is to keep the citizens safe, and I believe I can do that if the council moves forward with Ocean Grown,” Salvador said.

Salvador said early meetings with Ocean Grown have gone well.

“Over the last 90 days, I’ve gotten my AA in medical marijuana,” he said, drawing a laugh from the crowd. “And I am working on my bachelor’s.”

Mims, who failed to convince the Fresno County Board of Supervisors to take immediate action against the Coalinga ordinances, spoke at the workshop in opposition to the plan.

“If it sounds too good to be true, it probably is,” she said. “I urge you to fact-check everything you’ve heard. These are salesmen, and what you’ve heard tonight was a sales pitch.”

Mims told the council that the city’s faith-based organizations remain opposed to the measures. She left before the votes took place.

A representative for the Coalinga-Huron Unified School District also reaffirmed the board’s opposition to all medical marijuana.

Mary Raine, wife of the councilman, addressed the crowd after Mims.

“There are members of my family for whom medical marijuana has been a lifesaver,” she said. “I’ve been fact-checking and reading everything my husband does. I’m a member of the faith community, and I am recommending this.”

Coalinga City Attorney David Wolfe said the measures approved Wednesday could take as long as six months to draft. However, negotiations with Ocean Grown will continue without an ordinance in place.