High interest in selling legal cannabis in Manteca

No less than 60 firms or individuals have expressed interest in securing one of three permits that will be available for legal storefront marijuana sales within Manteca’s city limits.

Interim City Manager Toni Lundgren Thursday said the city is still vetting a proposed community benefit contract.

The document spells out what share the city will receive from annual retail marijuana profits. That would be on top pf the city’s one cent share of the basic sales tax plus the half cent Measure M public safety tax.

The city expects the process of finalizing the outline of a community benefit contract, screening applicants and finalizing the issuance of permits will take until the end of this year or early 2023.

The City Council approved legal marijuana sales back in December 2021.

Lundgren stressed Thursday that staff is taking the time to be thorough in a bid to make sure the city and community are protected.

Critics contend the legal marijuana market is oversaturated and that anticipated windfalls for Manteca’s general fund won’t be as robust.

Even if that is the case, it will stop what is referred to by economist as “retail bleed” much like the decision made 16 years ago to secure Costco with a sales tax split that has since expired.

Record kept on purchases by Costco showed the city was losing roughly $700,000 a year in local sales tax residents based on Manteca residents shopping at the Costco stores in Modesto and Tracy.

With the marijuana storefronts the city isn’t giving up any share of the sales tax. instead. the city is getting additional money above and beyond what they would normally be entitled to receive.

That means legal Modesto cannabis sellers will be taking a hit six months or so from now.

Modesto marijuana purveyors have recorded sales to more than 7,000 individuals 21 years and older in the 95336 and 95337 Zip codes that cover the City of Manteca and the surrounding rural areas.

The likelihood is strong most of those sales will be snared by Manteca pot stores that could also benefit from customers nearby cities such as Ripon and Escalon that do not have legal sales.

Other possible losers are those that believe easier access to marijuana will encourage even more use of cannabis products that have been legal for adults 21 and older to consume for recreational purposed for several years in California and therefore potentially create more — or exacerbating — issues related to the abuse and overconsumption of pot. Much of those concerns run the same gamut as they do with alcohol from impaired driving to addictive behavior

The big winners will be those concerns that successfully secure one of the three retail permits the city will issue as well as the City of Manteca itself.

Based on similar community benefits agreements made by other jurisdictions, the city could secure up to 5 percent of retail marijuana profits that may be used to address public safety, drug prevention and drug awareness, homelessness, mental health and drug issues, code enforcement, and take on any related community impacts.

Other winners include law-abiding Manteca residents those that no longer have to travel to Modesto or other jurisdictions where such sales are legal. Nor do those with no means of travel to Modesto need to rely on what they say are spotty deliver service from out-of-town dispensaries that allows them little choice in examining the products before they purchase them.

There is also an expectation that some who buy pot on the black market will switch to legal marijuana that is tested extensively for the amount of THC levels and making sure there are no dangerous chemicals absorbed into products during the cultivation and processing.

At the same time, city officials aren’t harboring the illusion that the black market will take a big hit due to the pricing difference. Regulated and taxed marijuana costs what some users describe as “significantly more” than the black market.

Concerns have ben expressed in the past year by the legal marijuana industry that it is “nearing collapse” financially won’t likely dampen the enthusiasm for firms to open in Manteca.

That’s because the marijuana trade group believes the more cities that allow legal sales will help push back on the black market that arguably is more extensive than legal storefront operations.

Also, the solutions the trade group is advocating impacts the cultivation tax placed on growers as well as the excise tax both of which are imposed by the state.

Manteca’s ordinance that was adopted also requires concerns that obtain permits pay fees to make the city whole in terms of the cost of vetting applicants as well as their continued monitoring of marijuana operations through law enforcement and financial oversight. That is in addition to sales tax and community benefit proceeds.

To contact Dennis Wyatt, email [email protected]

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