State approval is the only obstacle left to Farmersville becoming Tulare County’s new cannabis sales center.
City manager Jennifer Gomez says two of the three recreational cannabis storefronts already approved by the Farmersville City Council are awaiting their sales licenses from the state and then will be ready to open their doors.
Valley Pure, which operates the county’s only recreational cannabis sales point in Woodlake, will likely be the first to open its doors in Farmersville.
“They have their building permits and are doing some remodeling,” Gomez said. “They’re waiting for their state permit, then they’ll be ready to go.”
Location Tipped Scales
The three businesses will be located in the city’s industrial center near Highway 198 and Farmersville Boulevard.
Requiring the trio of businesses–Valley Pure, Token Farms and Platinum Connection–to hang their shingles at the edge of town, according to Gomez, was key to getting the city council to approve the idea of cannabis sales in the town of 11,000 residents.
“The council didn’t want it in our downtown,” she said. “At that location, it will allow easy access from the highway. I don’t know that if we didn’t have that location the council would have allowed it.”
Following Woodlake’s Lead
While Gomez is uncertain how much revenue bringing cannabis businesses to Farmersville will generate, she expects their returns to beat those of Woodlake. The city hopes for great returns despite not knowing how much future cannabis sales tax revenue to expect.
“It’s really hard to know at this point. We just look at Woodlake to give us some kind of idea,” Gomez said. “I just expect to exceed what Woodlake has because of our location and because we have three dispensaries.”
Woodlake is currently the only city in Tulare County that allows recreational cannabis sales. In its first year of business there, Valley Pure’s flagship location generated more than $400,000 in sales tax, much of which has been spent improving public safety for the town. Tulare may soon join them, with a ballot measure on recreational cannabis sales in that town set for 2020.
5% Pot Tax
Farmersville is also mimicking the way Woodlake taxes the newly legal intoxicant.
“We’re also 5%. We just matched Woodlake’s tax rate,” Gomez said. “We wanted to make sure we were being competitive with any neighboring agency. They were the only one close by. No reason to go lower than them.”
Wes Hardin, manager of Valley Pure, previously said Woodlake’s middle-of-the-road tax rate was one of the main reasons the business chose to open its doors there. Other California cities have set their cannabis sales tax rate as high as 10%.
Other Valley cities are also getting on the recreational cannabis bandwagon.
In March of this year, about the same time Farmersville took the plunge, Hanford approved cannabis sales for recreational purposes, allowing two dispensaries to open in its downtown area and a pair of pot delivery businesses to operate out of the city’s industrial park.
Last month, Lemoore became the second Kings County city to approve the sale of recreational cannabis. Fresno has also approved sales of recreational cannabis, while the Visalia City Council continues to balk at the idea.
The increase in tax revenue seems to be the motivating force in welcoming cannabis dealers to town.
“I think that, honestly, the potential revenue we’d be getting in it is a large factor in it,” Gomez said. “We have various large projects around town, that revenue will allow it, and buying new equipment.”
Farmersville’s city manager also hopes cannabis sales will bring new businesses to town.
“It’s my hope that will encourage other development by the highway, as well,” she said.
Storefronts aren’t the only cannabis-related industry Farmersville is welcoming. Again following Woodlake’s lead, Farmersville will consider allowing processing and the growing of cannabis inside the city limits. But, that remains a possibility for the future.
“We do allow cultivation, manufacturing, just no one has submitted any applications for those kind of businesses,” Gomez said.
Platinum Connection, which has yet to construct the building that will house it, has expressed interest in growing its own cannabis.
“In future, they’d like to have some facilities for cultivation,” Gomez said.
They apparently aren’t the only ones interested in growing cannabis in Farmersville.
“I know there is interest in doing cultivation, but no one has moved forward on doing an application for cultivation yet,” Gomez said.
Waiting on the State
Not only is Farmersville’s administration unsure how much revenue to expect from the sales of cannabis, it also doesn’t know when the flow of new cash will start. Gomez is hoping to see the new riches arriving no later than the start of next year, though it may not take that long.
“I’m honestly just waiting until January,” she said. “If I see anything come in sooner, I’ll be happy.”
Causing the confusion is the state-level bureaucracy. As with the approval of alcohol sales licenses, permits to sell recreational cannabis are controlled by the state government.
“I don’t know how long the state will take to issue these licenses,” Gomez said. “The dispensaries could be ready to go, just waiting for the state. They could be sitting here twiddling their thumbs. We don’t know how fast the state is issuing license.”
Not Counting Unhatched Chickens
While Gomez expects sales tax from cannabis to enrich the city’s coffers and improve the quality of life for Farmersville residents, she doesn’t believe it will bring radical changes to the city’s spending.
“Say (tax revenue is) like $500,000 a year. It sounds like a lot of money,” she said. “But, say we’re doing street improvements. They can be more than a million dollars.”
While Farmersville will be using the money cannabis sales generate for some large projects, it won’t be using those funds to hire new personnel.
“We’re not going to use it for salaries,” Gomez said. “We want to see if these businesses are going to stay.”
For now, there are no plans to spend revenue the city has yet to earn, but Gomez promises good things ahead for Farmersville.
“We’re being cautious with how we’re going to use that revenue,” she said. “We’re certainly going to put to good use.”