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Nearly a year after designating specific areas where cannabis could be sold to the public, county supervisors asked staff to investigate whether it’d be appropriate to expand those zones.

The request came after representatives in the retail industry told the Del Norte County Board of Supervisors on Tuesday that the existing zones were too restrictive.

“Unintentionally the ordinance has set up a monopoly because there’s two licenses permitted, but there’s no available spots for any other locations,” said Patti McCauley, who had been in the cannabis industry for about 11 years.

McCauley said she was hoping for a variance or an amended ordinance to operate a retail outlet on Northcrest Drive. She told supervisors that she had looked for a place to rent for months and thought she found one on Standard Veneer.

But, McCauley said, when the owner found out the nature of her business he raised her rent from $1,000 to $6,500 a month.

“There is no availability for a location under the ordinance,” she said.

District 3 Supervisor Chris Howard brought up the retail cannabis zoning ordinance, noting Tuesday, that a working group of county staff, local cannabis and agricultural representatives spent about two years determining where retail marijuana manufacturing should be allowed.

When supervisors approved the ordinance in November 2018, Howard said, the board intended to look at whether it would be prohibitive to the emerging market. He said constituents have approached him about discussing whether zones outside the Crescent City urban area would be appropriate for cannabis retail.

Under the current ordinance, cannabis retail and manufacturing is allowed in the light commercial, central business, general commercial and manufacturing and industrial districts in the unincorporated Crescent City urban area.

The proprietor of a business must obtain a use permit from the Del Norte County Planning Commission. Use permits will be denied for cannabis retailers located within a 1,000 foot radius of a school or youth center, according to the current ordinance. A cannabis retailer will also be prohibited within 1,000 feet of another cannabis retailer, according to the ordinance.

On Tuesday, County Counsel Joel Campbell-Blair agreed with McCauley and Howard that the stipulation in the ordinance stating that a cannabis retailer can’t be within 1,000 feet of another does appear to have created a monopoly for an area on U.S. 101 just outside city limits.

There are currently no permitted indoor grows in the county, Campbell-Blair said. He said he wasn’t sure if the California Coastal Commission allowed indoor cultivation within the coastal zone. He said staff could determine whether relaxing regulations on cannabis cultivation and manufacturing in Del Norte County would encourage more people in the industry to apply for permits.

Campbell-Blair suggested supervisors ask staff to return with a proposal to open up more retail space and a general discussion of other potential problems in the existing ordinance. He also brought up reconvening the Cannabis Working Group as a potential option for modifying the existing ordinance, but said he thinks county counsel’s office could come back with a proposed amendment.

Howard and his colleagues on the board, Lori Cowan and Gerry Hemmingsen, said they felt staff coming to them with a proposed amendment would be sufficient.

They also asked Campbell-Blair to work with Del Norte County Agricultural Commissioner Justin Riggs on figuring out what hemp cultivation would look like locally.

This request came after Jesse Davis, a registered cultivator of hemp in the county, urged the board to pay attention to the hemp industry as a whole.

During the Board’s discussion, District 1 Supervisor Roger Gitlin asked Campbell-Blair, with only one retail outlet permitted in the county, why doesn’t the county let the market determine if there is a need for more.

“I think the market should determine whether there are going to be one or two or 10 or 100, don’t you agree?” Gitlin asked.

Campbell-Blair said the working group wasn’t comfortable with the market initially and thought four cannabis retailers at the most would seek permits to operate within the county. Market forces are at work, he said, but the existing ordinance creates a “pretty restrictive little box,” a certain area, where market forces are influenced by regulation.

“If we were to open up, for instance, the 101 corridor straight up to the Oregon border we would create possibly two or three more viable spots,” he said.

Business owner Andrew Barnburg said he and others were interested in the cannabis industry, both the retail and cultivation side of things. He said he initially looked at potential areas in Smith River, but since zoning doesn’t allow growing and retail in the same place was unsuccessful. He also noted that cannabis retailers aren’t allowed within Crescent City limits.

“It’s only a tiny sliver on each end of town and there’s nowhere to do it,” he said. “There’s people willing to pour money into this and there’s tax money that’s available. We’ve done a study of the places on the 101 corridor to see fi tourists are buying stuff. We watched dispensaries in Richardson’s Grove, which has a population of about 80 people, and the dispensary has, every hour, between 8 and 30 people.”

Eric Neff, who owns a home in Del Norte County, said he was concerned that the one cannabis retail outlet, Sticky Grove, at 1070 U.S. 101, was in violation of the ordinance since it was operating within 1,000 feet of juvenile hall, which opens a school, and Cornerstone Church, which has a youth center.

“I talked to a retired Del Norte Superior Court judge, that’ll remain nameless. He believes that is a school by the letter of the law,” Neff said, referring to juvenile hall. “If something doesn’t change I’ll do whatever I can to get this in front of another judge and terminated.”

Robert Derego, who owns Sticky Grove, the school wasn’t operating when he applied for his permit and Cornerstone Church “doesn’t count” unless it showed up to the planning commission to object.

He said he competes in an uneven marketplace already because of the community’s proximity to Oregon.

Under current California regulations, Derego said, he is unable to write-off labor expenses, marketing or rent on his taxes.

“No business can exist in this county that can exist and make a profit without being able to write off their labor,” he said. “I’m not taking advantage of the community. I’ve scrapped my market as much as I can to compete with the 8 or 9 dispensaries across the Oregon border.”

Another county resident, Leslie Barnes, who lives on Church Tree Road, said because of a marijuana grow in her neighborhood property values have decreased. Barnes also complained about the smell.

“We do not want to have grows in residential areas,” she said. “I think that should be something the county looks at.”

At the request of Cowan, who asked about illegal grows, noting that the grow on Church Tree has been a concern for awhile, Del Norte County Sheriff Erik Apperson weighed in on the issue. While there is “plenty of illegal activity,” Apperson said there is confusion over when grows begin the process of legitimizing. Deputies are still enforcing statutes and the Del Norte County District Attorney’s office is still prosecuting offenders, but not as aggressively, Apperson said.

Establishing probable cause for a private grow is also challenging, Apperson said. There are also challenges with obtaining information about whether a grow is a code enforcement violation if a deputy responds to a complaint after hours or on weekends, he said.

“We’re the tip of the spear for those calls,” Apperson said. “We’ll respond, collect as much information as we can and forward that information to the appropriate resources. Sometimes that means sending a criminal report to the District Attorney’s Office, which would be our wheelhouse.”

Campbell-Blair noted that the owner with the Church Tree Road marijuana grow will go before the code enforcement officer on both a citation and a tax appeal. He said that would be the county’s first opportunity to enforce its ordinance.

“The people on Church Tree are claiming they’re growing medically under 215,” Campbell-Blair said. “What that still gives them is criminal immunity. The sheriff’s power is limited. (But) 215 and 420 provide no protection against zoning ordinances or tax ordinances.”

A violation of the county’s cannabis cultivation ordinance results in a $100 citation, Campbell-Blair said.

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