Sonoma City Council
No. 1 The Plaza
Sonoma, CA 95476

CityCouncil@sonomacity.org
Madolyn.Agrimonti@sonomacity.org
Kelso.Barnett@sonomacity.org
Jack.Ding@sonomacity.org
Robert.Felder@sonomacity.org
Sandra.Lowe@sonomacity.org

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January 17, 2022

Dear City Council Members and Staff,

The Sonoma Valley Cannabis Group (SVCG) submits this letter in response to remarks made by city council members and staff during their discussion of the second cannabis dispensary issue at its November 17, 2021 meeting. This reply also addresses points raised in subsequent communications between council members and SVCG. We feel it’s important to set the record straight regarding any incorrect information that was provided by the council, and to respond to misconceptions on the part of the city council that may have unduly influenced public opinion.

In an email to SVCG subsequent to the aforementioned meeting, it was suggested that though the RFP issue was tabled, there will be opportunity for medical patients and adult-use consumers to purchase cannabis in Sonoma once the first retail outlet opens.

• We submit that limiting purchases to a single local dispensary denies patients’ and adult consumers’ the freedom to take advantage of a competitive environment. They will continue to be at the mercy of a sole provider which can control price, product availability, and supplementary services. It can be shown that, compared to three of its major competitors, sparc’s prices are generally higher, and the number of brands and products lower.

During the November 17 city council meeting, it was suggested that Sonoma should take pride in amending its ordinance to allow a second dispensary and that, based on examples given for numbers of dispensaries in local cities, it’s “actually pretty significant for a town like us.” However, the numbers cited don’t bear this out.

• It was stated that Cloverdale did not allow recreational dispensaries. However, Cloverdale, which is smaller than Sonoma in population, in fact has two dispensaries.
• Santa Rosa has 12 walk-in dispensaries and another dozen already approved.
• Though not in the county, Napa was also mentioned as not permitting recreational dispensaries. However, the Napa City Council was already preparing to approve adult-use sales in all 5 of its dispensaries.
• Cotati was not mentioned. It is the smallest incorporated community in Sonoma County and has one dispensary.
• And though it, too, was not mentioned, Sebastopol, which is comparable in size to Sonoma, has two dispensaries.

In this context, five of nine Sonoma cities have dispensaries and, as a milestone, Sonoma’s single dispensary becomes less significant.

In a subsequent communication between a city council member and SVCG, it was suggested that, though the vote to table the RFP may have been a disappointment to this organization, there are “many” residents who believe it was the correct decision for the city as it addresses other priorities.

• We ask what number constitutes “many”? Is it as many as the number of citizens, 40, who sent post cards? Did those from whom the council member heard send their concerns via emails? There are no emails expressing opposition to a second dispensary in the Public Correspondence folder. However, it does contain 11 emails in support. An additional 18 emails of support went missing (names available on request), likely due to the same snafu in the city’s mail system that delayed for two weeks our email to which the council member recently responded.

In the same email, it was also stated that the “question isn’t if we’ll have a second (dispensasry), but when.”

• We must ask, when is “when”? Given the current process, it could easily be two or three years from now, far too long. Only the Staff has suggested a date, vague as it is, for releasing the RFP. The city council has not proposed a date. The city council has, however, advanced myriad reasons to avoid initiating the process:
• • Several weeks ago, the City Manager attempted to deflect/redirect our query on why the second dispensary issue wasn’t on its list of goals.
  • Then it was proposed by council members, errantly, that there was a lack of interest among the populace.
  • Subsequently, someone unknown, in some unexplained manner, directed Staff to recommend a delay in order to obtain tax data. However, during the November 17 meeting, Staff said it wasn’t particularly interested in the financial aspect of the recommendation, admitting that early tax numbers wouldn’t reflect the business’s viability. We are having difficulty reconciling these two points. Rather, Staff made the less substantial claim that it wanted to make certain sparc honored its community benefits promises and that it provided appropriate literature on its counters.
  • One council member brushed off the significance of the amount of tax revenue that could be gained.
  • Yet another, in a public forum, provided inexact information regarding numbers of dispensaries and product prices.
  • Still another claimed that every other issue on the council’s plate “would come to a screeching halt because we have to go through an extensive rfp process”.

To the last point, SVCG is not convinced that the city council is unable to manage more than one issue at a time. The council was faced with multiple issues during 2020-21, from Verizon Wireless and UGB to Housing and Development Code, all during the time of Covid-19. During that time, it also drove the first dispensary process from RFP to CCBP.

In the end, on November 17, the city council decided to grant the sole permit holder a de facto moratorium that protects its monopoly of service, the legality of which may be questionable.

In the 4 and a half years of the Sonoma Valley Cannabis Group’s existence, it has always dealt with city government in good faith. We can, however, describe instance after instance when the city council and its staff did not act in kind. Given all the aforementioned disparate rationalizations for not moving the process forward, many would say that it seems the problem is not a lack of will on the part of the public, but instead a lack of will on the part of the majority of the city council.

However, we would prefer to give this current city council the benefit of the doubt that it would consider an offer that could resolve this issue.

Proposal:

There are a number of points on which we should be able to agree:

1) The chance that sparc will encounter any negative impacts in its first few months of operation is negligible.

2) Early tax numbers won’t necessarily reflect the business’s viability.

3) That considering the agreement sparc has with the city, it will honor its community benefits commitments.

4) That a second dispensary will substantially increase tax revenue to the city:

• In 2020, California retail stores sold $4.4 billion worth of cannabis products, indicating almost 50% growth compared to 2019, and that by 2022, the recreational cannabis market in California is projected to reach $5 billion.
• That locally, Santa Rosa’s coffers have “benefited from the retail growth as sales tax revenue from the businesses has increased from $163,729 at the end of fiscal 2018 to $1.1 million in the last fiscal year… That would equal $36 million in overall recreational sales on       a yearly basis as the city taxes cannabis products at 3% for adult use…”

Agreement on these particulars should eliminate the main considerations cited by the city council as barriers to moving the process forward. SVCG proposes that the city issue the new RFP on April 1, 2022, in order to expedite the process and allow the city to realize the additional revenue promised by industry growth.

• This three-month window will give the city some time to establish forward motion on other issues.
• Understanding that the process timeline could extend beyond six months to complete, the current dispensary will have ample time to establish its presence in the city.

In conclusion, on behalf of its 200+ members and the residents of the entire lower Sonoma Valley, the Sonoma Valley Cannabis Group asks the Sonoma City Council to begin the second dispensary process to insure a fairer and more equitable environment for medical patients and consumers.

Sincerely,

The Sonoma Valley Cannabis Group (SVCG) Executive & Policy Committee

CC: Sonoma Index-Tribune, North Bay Business Journal, Press Democrat, North Bay Bohemian, Sonoma Sun, Northbay Biz, KSVY, Sonoma Valley Chamber of Commerce, Sonoma County Democratic Party, Sonoma Valley Democrats, Napa Valley Register, SF Chronicle, SF Examiner