After a contentious recall election, Diane Sharp was sworn in as Hanford’s newest councilmember on February 6, while Francisco Ramirez graciously stepped down from the dais.
Ramirez was presented with a plaque and commended by Mayor David Ayers for serving the city with honor and distinction. Ramirez was elected to represent District D in 2014, and then served as vice-mayor in 2016.
In Ramirez’ parting statement he said he was proud of what he had accomplished during his time on the council and proud of Hanford. He said that unemployment and crime were at an all time low while job creation was at an all time high.
He said the three things he worked towards, but did not have time to accomplish, were building a youth recreation center, acquire another ladder truck for the fire department, and hire more police officers.
He said that the city council is like a canvass, the people are the paint and the staff are the brushes. “Keep painting the beautiful picture of Hanford,” said Ramirez.
Sharp took her seat on the dais and gave a short speech saying that it had been a lifelong dream of hers to serve the residents of Hanford in this way.
Sharp established her place on the council immediately as she asked detailed questions about Hanford’s future marijuana cultivation industry and presented a plan to save the old firehouse slated for demolition.
Her plan for the firehouse, which has since been demolished, is mentioned in a separate article in this issue.
Sharp’s pot questions, along with those of the other councilmembers, came after Rand Martin from Caliva, and consultant, Dave McPherson, gave their input on how Hanford should proceed with its tax ballot measure.
Hanford has given three businesses a total of 24 permits to grow medical marijuana in the industrial park.
Martin told the council that he hoped it would write a tax measure that is simple, easy to enforce and encourages growth in the industry. He added that the marijuana cultivation industry in San Jose has been stunted because their taxes are too high.
McPherson said that it is estimated that California consumes 2.5 million pounds of pot annually, but 4.8 million pounds are being produced. When faced with more product than consumption, the tax question becomes more complicated.
He reminded the council that the marijuana businesses will be paying the tax and not the constituent.
Pot dispensaries, he said, have much more flexibility because they can pass any cost increase to the consumer. Cultivators do not have this luxury because of the competition, meaning retailers will basically be able to dictate what they will pay per pound.
In the black market pot costs about $2000 per pound. Since state licenses have started to be issued, a pound costs about $1000. That price is predicted to go down to $850 a pound by the end of the year.
The recommendation from McPherson was to keep the local tax down to 2% – 6% so that the cultivation business can prosper and expand.
The city can tax cultivators per square foot of production or make it a percent of gross receipts. Other cities facing the same decision have opted for the square footage method because it is easier to track.
The council also needs to decide whether to make the ballot measure a general tax or special tax. A general tax only needs to pass by 50% plus one, and a special tax needs to pass by two thirds. The last three ballot measures in Hanford that needed a two thirds majority failed.
Sharp wanted to know what would happen if the voters didn’t pass the tax measure. Community Development Director, Darlene Mata, said that Hanford has already made a commitment to the three companies and that they would proceed in cultivating pot whether taxed or not.
The three pot businesses have also already invested a considerable amount of money to set up shop in Hanford.
Sharp also wanted to know if the Federal Government could shut the pot industry down because it is still an illegal substance on the federal level. City Attorney Ty Mizote said that technically the Federal Government could, but that they did not have the money to pursue the pot industry in every state.
Medical marijuana is legal in 29 states and recreational pot is legal in eight states and Washington D.C.
Ayers said that he prefers the middle of the road when deciding on the tax, while keeping it attractive to the industry.
The city council needs to complete a resolution by March to ensure that the measure gets on the November ballot. Mata said staff would craft a resolution based on the council’s feedback and have it ready by the next meeting.