In an effort to take local control before new state laws go into effect in January, the Gilroy City Council passed two “emergency” ordinances last week, one to stop commercial cannabis sales and the other to limit the size of “grandmother” units to 600 square feet.
When recreational cannabis is legalized statewide in January, Gilroy will not be profiting from it. It joins most of its neighbors in Santa Clara, including Morgan Hill, in banning dispensaries and commercial growing of marijuana.
The council voted unanimously to keep the ban on medical marijuana dispensaries it had passed earlier in the year and strengthen it to include recreational dispensaries.
“I think it’s pretty clear, at least from the people I’ve spoken with, that people don’t want these in their neighborhoods and I don’t think the city is in a position to enforce the laws around dispensaries,” said councilmember Dan Harney. “I think in a year we should revisit it, once the law goes through.”
Other councilmembers said they were concerned by the fact that marijuana is still federally illegal and the dispensaries are forced to operate as cash businesses because banks are fearful of taking illegal funds.
The city’s planning commission recommended that the council consider and not close the door on the possible tax revenues from having dispensaries, however, the final vote ignored that.
In Colorado, where recreational marijuana has been legal since 2012, sales of cannabis were at more than $1.1 billion in 2016 and the state has collected more than $150 million in taxes, $50 million of which went to build new schools, according to the Denver Post.
The city of Aurora, Colorado, three times bigger than Gilroy, raised its tax on cannabis sales from 5.75 percent to 7.75 percent and has raised more than $1.5 million for homeless services and $2 million for a recreation center.
Most cities in the county, including Morgan Hill, have banned commercial marijuana sales. Gilroy neighbors Hollister and Santa Cruz are hoping to jump on a different band wagon, allowing and taxing recreational sales. Prices of large industrial buildings in Hollister have skyrocketed as speculators hope to grow crops indoors, according to business people there.
Gilroy’s ordinance allows private cultivation of marijuana, with each home allowed to grow six plants indoors or in adjacent buildings such as greenhouses. The city can also not ban delivery of marijuana to private homes from legal dispensaries, according to city attorney Andy Faber.
The council voted 4-3 to restrict accessory homes, so called “granny units,” to one bedroom and 600 square feet. State law would allow accessory homes of up to half the size of the main unit on the property, or 1,200 square feet.
Councilmembers Cat Tucker, Peter Leroe-Muñoz and Fred Tovar voted against the ordinance saying that 600 square feet was too small. The other four members, Daniel Harney, Mayor Roland Velasco, Dion Bracco and Paul Kloecker, supported the small units, saying they wouldn’t have much impact on housing limits in the city.
Tovar said he thought such small units wouldn’t help people who need affordable housing.
“I don’t want people to view accessory dwelling units as a way to house four or six people,” said Harney, who added they should be for more vulnerable single people and in-laws.
Dwellings of 800 square feet trigger use charges of $34,000 to $48,000, making them unaffordable. Those impact fees are assessed because larger units are thought to bring in problems such as parking, overcrowding and environmental impacts.
In the city’s ordinance, one of the units on the property must be occupied by the owner. The council will look at the ordinance again later in the year as it studies zoning and impact fees.