The Calaveras County Board of Supervisors took on a range of issues at a meeting on Feb. 9, including hemp, cannabis and emergency jail repairs.
Following a public hearing, the board voted 5-0 to adopt an ordinance prohibiting the cultivation, breeding, keeping, storing, processing and manufacturing of industrial hemp in Calaveras County.
In March of 2019, the board adopted an urgency ordinance which placed a temporary moratorium on hemp cultivation in response to the lifting of federal restrictions.
“The reasons for doing so were to allow time to develop permanent regulations to ensure that hemp cultivation did not adversely affect adjacent property owners due to odors, impact the regulated cannabis industry from cross-pollination, and create problems for law enforcement from those who would illegally cultivate cannabis under the guise of growing industrial hemp,” the staff report included in the meeting agenda reads.
With the moratorium set to expire on March 12 of this year, the board directed staff to draft a permanent ordinance banning hemp cultivation at a meeting on Nov. 17, 2020.
“At the recommendation of the agricultural commissioner, staff added language prohibiting associated activities such as breeding (a new state-defined category of cultivation), storing, manufacturing, and processing that could similarly result in the nuisances the board wishes to avoid,” the staff report reads. “Wholesale and retail consumer-ready products without nuisance potential, such as hemp cloth or bottled CBD oils, are not prohibited under this ordinance and can be used in the county to produce new retail products such as hemp clothing or blended oils.”
The planning commission recommended that the board adopt the ordinance during a public hearing on Jan. 14.
“They did express a concern that hemp could be a viable industry in the county, indicating that the board should revisit the issue in the future, after there is more clarity with state and federal regulations,” the staff report reads. “State and federal hemp regulations continue to change very rapidly, sometimes on a week-by-week basis, and the state is still waiting for the federal government to approve its hemp program.”
Also at the meeting, Calaveras County Division of Cannabis Control (DCC) Director Greg Wayland updated the board on the county’s cannabis program, which was implemented following the adoption of a cannabis cultivation ordinance in October of 2019.
“2020 was an important year for our program,” he said. “We accomplished a lot in terms of permit issuance, issuance of CBCBs (Cannabis Background Clearance Badges) and building out our program.”
In order to own or work at a local cannabis business, individuals are generally required to obtain CBCBs issued by the DCC. Wayland said that a total of 314 CBCB applications have been submitted since the beginning of the program, with 60 applications in process, 23 issued temporary, 229 issued permanent and two denied.
The DCC has issued 38 total commercial cultivation permits, which encompasses a total cultivation area of about 1.2 million square feet.
Of the total cultivation permit applications submitted, 27 have been withdrawn, 15 have been denied, eight are under review, 24 have corrections needed, 30 have conditional approval and 26 are in applied status.
“The number of cultivation permit applications that will be accepted is limited to the number of growers who previously registered under the urgency ordinance program, had not withdrawn the registration or had it denied, and had either received a state license or had a state license application submitted and in process before being halted when the previous county-wide ban went into effect,” the DCC’s website reads. “The ability of an eligible grower to apply for a permit is transferable to another qualified applicant, as are the permits themselves.”
Of the estimated 190 to 200 rights-to-apply, 131 have been utilized, while an estimated 59 to 69 have not been utilized.
As a fee-funded department, the DCC receives its operating expenses from regulatory fees. The application fee for a cultivation permit is roughly $12,500.
From fiscal year 2019/20 (July 1, 2019 through June 30, 2020) through the first quarter of fiscal year 2020/21 (July 1, 2020 through Sept. 30, 2020), the DCC took in about $841,000 in fees, with operating expenses totaling about $314,000 during the same period, resulting in a difference of about $527,000.
“We’re expecting a busy year in 2021,” Wayland said. “We have applications pending that go across fiscal years, and so these programmatic costs follow that application, and we’re able to continue processing those with the fees that they’ve paid.”
In November of 2020, county voters approved Measure G, which taxed cannabis cultivation on a canopy square-footage basis and also implemented other procedural and administrative changes beginning Jan. 1.
Wayland said that while Measure C—the tax measure that Measure G supplanted—brought in about $1.07 million in tax revenue during 2020, Measure G is expected to bring in about $2.69 million this year based upon current permits.
In the presentation, Wayland laid out several goals for the DCC in 2021. These included the drafting of a fee resolution that would allow permittees to modify premises and activity, holding quarterly stakeholder meetings with the members of the cannabis industry to work out logistics and objectives, and modifying the cannabis cultivation ordinance to provide for distribution, testing and manufacturing.
Wayland also suggested that the DCC should take a look at the CBCB program and potentially make modifications to ensure that an adequate number of workers are available to the industry during harvest season.
“While we’re building out our CBCB permit holders, our badge holders, the industry in the meantime is somewhat unique in that at times of the year there’s a surge in demand … (and) it may be difficult for our permittees to obtain the help that they need at the time that they need it.”
Wayland said that the current ban on local distribution and testing hinders the local cannabis industry and forces permittees to rely on out-of-county businesses to provide these services.
“We have a major component of this industry missing from our local economic ecosystem,” he said. “What we’d like to be able to do is bring this type of license back and be able to fold it into our regulatory program.”
Economic and Community Development Department Director Kathryn Gallino said that allowing for local distribution, testing and manufacturing would benefit the local economy and bring in tax dollars.
“To see any type of leakage of commerce, tax dollars, employees leaking out of Calaveras into other counties is not a positive thing,” she said. “We really want to capture that revenue and keep it here in Calaveras. In talking to some of the growers, they would like to be able to have the option for transport and testing, storage and labeling, and ultimately, hopefully, to the manufacturing phase, where we could completely close the loop 100% and capture and maximize all of the dollars here in Calaveras.”
After some discussion, the board directed staff to draft an ordinance regulating local distribution and testing within the constraints of the Environmental Impact Report pertaining to the cannabis ordinance.
Staff also directed the DCC to work with industry stakeholders, the sheriff’s office and other county staff to discuss solutions to ensuring that an adequate amount of workers are available to the industry during harvest season.
The board also approved emergency repairs at the sheriff’s office and jail in San Andreas after hearing a presentation from Jim Macedo, an undersheriff with the sheriff’s office.
“The Calaveras County Sheriff’s Office mechanical operating systems, which control water, heat, air conditioning, and numerous other mechanical devices and valves supporting the overall operation of the jail and sheriff’s office, are failing and must be repaired,” the staff report reads. “As an emergency stop-gap method, sheriff’s facilities maintenance engineers have developed a practice of rebooting the Siemens computer-based mechanical operating systems in order to override mechanical controls.”
The rebooting process failed the week of Jan. 30, which locked county staff out of system controls. While staff with the county’s information technology department assisted facilities staff in regaining access, the repairs were only temporary, according to the staff report.
“A more permanent repair of the system is necessary to permit the continued conduct of the operation or services of the county and to avoid danger to life or property,” the staff report reads. “Failure to complete emergency repairs to the automated front-end Siemens mechanical system may result in a complete shutdown of the sheriff’s facilities, including water, power, heat and cooling. This could result in a need to transfer inmates and sheriff’s staff—including 911 emergency dispatchers—to other facilities, resulting in significant additional costs to the county.”
The emergency repairs to the front end of the mechanical system are estimated to cost $150,000 and will be funded with the sheriff’s office’s total remaining facility repair appropriations for fiscal year 2020/21.
“These funds can be utilized to begin the emergency repairs; however, this will deplete the sheriff’s office’s entire facility repairs budget for the remainder of the fiscal year,” the staff report reads. “This may result in the sheriff’s requesting additional funding for other repairs later in this same fiscal year.”
Many additional repairs will be needed for the facility’s mechanical systems, Macedo said.
“We have determined that the first, most important thing that we need to fix is the computerized mechanical control systems, which is basically the brain for all of the operating systems in both facilities,” he said. “The brain works with every other system, and the lack of the brain operating properly is degrading other systems.”
Macedo said that the county decided against obtaining a service agreement with Siemens to maintain the system after it was installed between six and seven years ago.
“That was not a sheriff’s office decision; that was an overall county executive decision, largely based upon finances,” he said. “I’m not saying that’s entirely the problem with this Siemens system or why we’re here today, but based upon what I’ve been told by the company that actually came in and did the investigation, by the staff that’s actually maintaining and operating the system, that is certainly a consequence of those decisions.”
County Facilities and Grounds Manager Patrick Martin said that the replacement computer system has an expected shelf life of between 10 and 15 years.
“The work that we’re proposing right now is going to come with a complete new front end, which includes the software, the computer (and) all of the components necessary to take back over the overall system,” he said. “It’s coming with the updates, the service agreement and everything that we need to maintain that moving forward.”
In a 5-0 vote, the board found that an emergency existed and that action was necessary, agreed to dispense with competitive bidding requirements and authorized the purchasing agent to execute an emergency contract with ACCO for emergency repairs to the front-end of the Siemens mechanical system.