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A split Merced City Council approves ordinance that allows weed businesses

A split Merced City Council approved a cannabis ordinance on Monday that would allow commercial marijuana businesses in town, including dispensaries.

The 5-2 vote approved dispensaries in zones around the city with a buffer of 1,000 feet from schools, parks, youth centers and with other restrictions. Mayor Mike Murphy and Councilman Michael Belluomini cast the dissenting votes.

The 1,000-foot radius is a similar distance required by the city on tobacco retail. But, unlike tobacco, the dispensaries will not be allowed in what leaders have dubbed the “city center,” which is bounded by 16th, 19th and I streets and Martin Luther King Jr. Way.

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Cities around Merced County have grappled with whether to allow cannabis businesses as a way to improve local economies and drive up tax revenue. Merced is the first to get this far.

Murphy called the approval “a mistake,” noting there is no guarantee that voters will approve a tax that would generate revenue.

About a dozen speakers at Monday’s meeting spoke on behalf of the ordinance.

The newly approved cannabis ordinance in Merced is the “most robust” in the region, according to Zach Drivon, a Stockton-based lawyer who has spoken at a number of public meetings in Merced County.

“This is going to increase public safety, and this is going to allow the city, ultimately, to take advantage of the economic and social potential,” he said.

Merced’s ordinance allows for selling, processing, testing and most other marijuana-based business, depending on where they are located in town. Businesses other than dispensaries would have a 600-foot buffer from schools and other protected spaces.

The ordinance does not allow hash bars, vending machines or drive-thru sales.

The Merced ordinance comes about a week after Merced County banned all cannabis-based businesses and the outdoor cultivation for personal use in the unincorporated areas.

The passage of Proposition 64 last year gave anyone the right to grow six marijuana plants inside. Plants could be grown in Merced in a greenhouse, assuming the plants can’t be seen through the walls of the structure.

City staffers said it’s unclear how many applications may come in looking for one of the four permits allowed for a dispensary. Each application will come with a processing cost of about $1,000 to $8,600, according to preliminary estimates from the staffers.

Then dispensary runners would pay between $6,000 and $32,000 a year to cover the costs of regulatory inspections, again according to preliminary estimates.

Murphy said he wanted to make sure that voters passed a special tax on marijuana before allowing businesses to set up in town. That would put the ordinance on a ballot and push its approval back to June or November of next year.

“I think this is a real opportunity lost,” he said during the meeting. “(We) certainly put a lot of hard work into this, and it’s unfortunate I am not supportive of this.”

California cities that have adopted ordinances before passing a tax “typically” have been successful getting voter support of 70 percent or higher, according to Neil Hall, Merced’s marijuana consultant from Fairfield-based SCI Consulting Group.

The ordinance has to be voted on again by the City Council on Dec. 4, and could go into into effect on Jan. 3, according to staffers.

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