The Nov. 4 meeting of the Dixon City Council discussed official changes to the city's Cannabis Business Pilot Program. Courtesy photo

DIXON, CA (MPG) - At the Nov. 4 meeting of the Dixon City Council, official changes to the city’s Cannabis Business Pilot Program were considered.

The pilot program was established in 2017, and since that time there have been three approved and operational cannabis businesses: one manufacturing, BEGK, and two dispensaries, Club420 and Dixon Wellness. 

At a prior meeting, the City Council discussed potential updates to the pilot program and provided feedback to staff. Proposed changes included clarifying the procedural requirements for cannabis business entitlements and strengthening the City’s enforcement authority to ensure consistent compliance with local and state regulations. 

Now back before council for approval, the changes in the conditions of operations include standardized conditions that apply to all cannabis businesses, along with a streamlined review process and improved clarity for operators. 

Another change is the prohibition of temporary structures, while allowing a compliance period for operators to make the switch to permanent structures. 

At a later date, the city plans to move forward with authorizing the Marijuana Business Tax, approved as Measure K by voters in 2016, which allows up to a 15 percent tax of gross receipts of any cannabis business. Existing businesses won’t be subject to that tax as long they maintain development agreements (DAs) with the city, which instead impose specific fees for a public benefit fund to support fire and police department positions. 

The DAs for the retail businesses previously set the monthly public benefit fee of 5 percent of gross sales or $30,000, whichever was higher. But council had requested it be changed to just 5 percent since many of the businesses are currently struggling financially. 

Another change requested by council was more flexible regulations for cannabis delivery, to ensure the existing businesses can remain competitive. Only businesses with current licenses to operate in Dixon will be legally allowed to deliver within city limits, so any deliveries from operators in other areas will not be permitted. 

Other changes include the requirement of a conditional use permit and four-year terms for the DAs, which will now be optional. 

Some significant revisions in the enforcement policies include permit revocation if operators violate any part of their permit or agreement, violate city code or state laws or regulations, or fail to pay required taxes. They can also impose fines for some violations and temporarily suspend the permit in the case of health or safety issues. 

It was also proposed that each business would be subject to an annual random financial audit, requiring them to respond and provide financial documents within 48 hours of the audit notification. 

During public comment, Dixon Wellness CEO Haley Andrew said it would be difficult to provide all required financial information for an audit within 48 hours. Instead, she suggested that operators should respond within 48 hours to begin working with the auditor and gathering the documents. 

Councilmember Kevin Johnson said that the DAs for the established cannabis businesses expired much too long ago, and he urged staff to expedite the process to set new agreements, so the operators know how to move forward. 

City Attorney Douglas White said it would be reasonable to adjust the language to allow a response to the audit within 48 hours and then allow the operators the necessary time to work through the audit process. 

The Council voted unanimously to approve the updates to the Cannabis Business Pilot Program. 

During General Public Comment, a resident expressed concern about the recent appointment of an assistant city manager. He thought there was supposed to be a public announcement and recruitment period for new employees, but he didn’t hear anything about it until the council approved the position at the last meeting. 

City Attorney White clarified that the employment rules referenced by the speaker applied to represented employees who are part of a union group. He said directors are contract employees who are direct appointments of the city manager, and the requirement is just that their contract be ratified by the council in a public meeting. 

The next meeting of the Dixon City Council is scheduled for Nov. 18.