MAY 2, 2022
CITY COUNCIL SPECIAL MEETING/ STUDY SESSION
ITEM 3.1
Provide Direction on Terms of
Draft Development Agreement for a
Commercial Cannabis Retail Dispensary
The City Council passed and adopted Ordinance No. 21-428 on December 13, 2021 and thereby amended the Lathrop Municipal Code (“LMC”) to allow one commercial cannabis retail dispensary business within the City.
On February 14, 2022, City Council approved revised merit-based selection criteria, appeal procedures, and the issuance of a retail cannabis dispensary request for proposal (“RFP”) with a response deadline of 6 p.m. on March 8, 2022.
A total of one (1) timely response was received to the RFP by the deadline from Central California Greens, Inc. Staff reviewed the response and confirmed said response met the minimum requirements of LMC 5.26 and the requirements of the RFP. Council selected Central California Greens, Inc. to proceed to the next discretionary steps in the application process to establish a commercial cannabis retail dispensary.
Background
The Attorney representing Central California Greens, Inc. has agreed to several of the City’s proposed terms and conditions of the Draft Development Agreement (“DA”), with the exception of the following unsettled economic issues. The unsettled economic issues are summarized as follows:
City staff proposed:
• 2(b)(i)(2)- A monthly fee of 5% of gross receipts from operation of the retail storefront Business on the Property (“Fee”) from and after the Effective Date. • 2(c)(ii)- If the City’s tax on cannabis commerce should ever exceed that of the City of Stockton for any reason, at Operator’s option, it may initiate good faith dialog with the City to explore whether that additional taxation is in the parties mutual interests given the risk of sales leakage to Stockton. City shall participate in those discussions in good faith, but is not obligated to agree to change its tax.
Central California Greens, Inc. responded with a request the City approve:
• A 2% fee on online orders and delivery sales.
• A 5% fee on onsite retail sales to be reduced if Stockton reduces their 5% fee.
Summary
Staff recommends City Council provide staff direction regarding the remaining unsettled economic terms.
Recommendation