Caliente Moving Forward with Marijuana Businesses

A larger than usual crowd gathered for the Dec. 7 city council meeting.

Wes Henderson, Director of the Nevada State League of Cities, gave a presentation on the bills relating to marijuana that were passed by the legislature and signed into law by Governor Brian Sandoval. Supporting material on the bills was available for the public.

Henderson thanked the city for being part of the League of Cities and for their service to the community, saying “sitting up there is not an easy job.”

Among the issues discussed were attempts to enact tax reform at the federal level; the differences between the House and the Senate version of the tax bills that were passed; deductions for the state and local sales and income taxes eliminated in both bills; deductions for local property tax were capped at $10,000 in both bills; and how tax exemptions for interest on municipal bonds were preserved.

The interest on Private Activity Bonds was eliminated in the House and preserved in the Senate, with the potential to be preserved in the Conference Committee. Tax on interest on advance interest bonds was eliminated in both Houses. The League of Cities is trying very hard to get this back in as it allows one-time refinancing of lower interest rate bonds.

In the Nevada legislation, the League of Cities is allowed to enter five EDRs; they presented four and got one passed. Cities can put delinquent sewer bills on the property tax roll for collection. This bill will add water and storm drain bills onto the tax roll. This is a last resort, but the League thought the cities should have what the counties already have.

The council held a public meeting on how the city should process with regulation, licensing, and zoning of marijuana-related businesses within city limits. Dylan Frehner asked that this be put on the agenda because the city has received the applications from several individuals regarding licensing within the city. At this point in time, the city has nothing in the codes authorizing the licensing, cultivation, or dispensing of marijuana.

Frehner wanted to bring it before the Council and Planning Committee to see how the city wanted to work with marijuana in the future, after Nevada voted in 2016 to legalize.

It is now legal to possess up to an ounce at any given time, as well as legal to grow up to 12 plants on your personal property. The city can restrict any public smoking from any public building, “but what I see in the statute is we can restrict through zoning, where and if we want it in the city, but we cannot completely outright ban it,” said Frehner.

Mesquite has approved recreational dispensaries and cultivation in the city. They looked at three different levels and are taxing all levels. Incorporated cities may collect for revenues and for licensing tax on a marijuana establishment not to exceed three percent on top of origination fees.

They are at a place where they need to know if they want to go forward to impose a tax; this is only on a commercial basis.

After discussion between the public and the council, Mayor Tommy Rowe asked for a vote.

Councilman Victor Jones and Rowe voted to move ahead with Frehner to draft a proposal, with Councilmen Cody Christensen and John Ahlstrom voting against it. Rowe decided the vote should move forward.

Frehner will research and draft a proposal to bring back to the council.

The council turned next to approving or denying Todd Davis’ requests for a Marijuana Cultivation License, because there is no ordinance on the books. Frehner said, “The state just opened up and let people know that they could apply for rural licensing. These people came and presented this; they have to have applications in by Jan. 2, 2018.”

Christensen moved to table it. Alhstrom seconded it. Davis asked if he could address the council before they tabled it. Rowe allowed one person from each group to speak. Todd Davis went first.

“Our objective is to get licensed and provide jobs through the cultivation with the greenhouses and jobs through the productions. Our group intends to invest $10 million with an additional $10 million after that. We are putting money into the infrastructure and taking a pretty big leap in supporting this town however we can and building our business.”

Asked why he wanted to come here, he said he has a lot of friends who ask him to come out and help with their projects. He thinks Caliente could use such licensing more than other places in Nevada and added that he’s heard from the locals that this is an opportunity they would like not to see in the rearview mirror and which they want to be part of.

Rowe ask how big a production Davis was estimating.

Davis stated that, “We’d like to start off with 10 acres production and move into potentially 20.”

Rowe asked, “How many greenhouses is that?”

Davis stated that, depending on size, it could be 50 to 75 green houses. Rowe inquired about how many people would potentially be employed and Davis suggested 125 people during harvest and 50 people on a regular basis.

Jones wanted to know what the taxes on the city would be.

Davis stated that “our first phase is 12 acres. We expect to yield about $36 million a year, so three percent of that, you guys can do the math; it’s over a million dollars.’’

Brandon Berhart requested a CUP to start the process with the state to get the ball rolling. Ahlstrom asked how long they had known about this, saying the state notified them on Nov. 16 that rural areas were open. Berhart said they’d like a CUP in order to be able to hit the ground running in January.

With a motion to table items three and six, Rowe called for a vote. In favor were Christensen and Ahlstrom. Those opposed were Jones and Rowe. After a tie vote, Rowe voted to move this forward.

Dylan Frehner advised that if they were going to move to approve both these items, they should not be approved outright but approved to move forward with a conditional use permit to bring back to the next meeting.

A motion had to be made on the items separately. Councilman Jones made the motion and Councilman Rowe seconded. Mayor Rowe asked for votes on Warren Eizman and Bert Cox’s permits.

Voting yea, Councilman Jones and Rowe opposed Councilmen Christensen and Alhstrom. Again, there was a tie vote. Mayor Rowe then voted in favor of the motion to draft the Conditions Use Permit.

The council moved to approve/disapprove annexing a 40-acre parcel of land owned by Bert and Natalie Cox, an island surrounded by city property but not part of the city, with the understanding that is was being annexed with the commercial site as a rock quarry.

Dylan Frehner said Cox will have to submit a petition to the the city. If the city accepts the petition tonight they will have to go to an ordinance and will have to open the ordinance process to annex. Under that process an amendment to the zoning in can be added in order to clarify what’s in use. Councilman Christensen moved to accept the petition, with Councilman Jones seconding. After unanimous agreement, the motion was passed.

If someone wants to have a non-city worker in a vehicle, they need permission from a supervisor

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