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March 2, 2016

Planning Commission February 9, 2016 - just the marijuana

Executive Summary:

• Total Dispensary CUPs considered: 5
• Continued: 2
• Approved: 3

A late report on only the marijuana aspects of last month's Planning Commission meeting based on the city recording...which means I can't hear what they're saying when a microphone is turned off.

Cathy Romero was chosen to be the new Chair, and Dirk Voss the new Vice Chair. Dirk Voss was absent from the meeting.

Public Comments

Ian Armstrong from Palm Springs got up to comment on the state of the medical marijuana market. IMHO, the only experts on the MMJ market are those people who are in it: such as dispensary owners and cultivators; and even they don't have perfect knowledge of this newly legal, rapidly expanding, still somewhat shadowy business. Nevertheless, Mr. Armstrong presented himself as an expert. His research seems to have been little more than looking at Weedmaps.com, which is very unreliable, if for no other reason than that the businesses listed can pay to be promoted on the site. He claimed that only two dispensaries in Palm Springs are operating in the black (i.e., profitably). He didn't say how he knew that. He says the others are expecting to make a profit only after recreational legalization. He said the valley is quickly becoming saturated with medical marijuana facilities, both dispensaries and cultivators. [Note: the only legal cultivation actually underway in the valley right now is the cultivation going on at the dispensaries, which is a fairly small time thing.] He "explained" that the difference between a dispensary and a cultivation is that cultivation reduces consumer prices while dispensary operations destroy multiple dispensaries and "prohibit businesses from actually being engaged properly." That's not how I would define either operation, but Mr. Armstrong was getting to his point.

He said the items on this night's agenda looked "severely problematical" because of the "saturation of medical cannabis facilities in Coachella Valley." You see how he switched from saying it's quickly becoming saturated to saying here that it is saturated. See how quickly that was?

But, heavens no, Mr. Armstrong is not opposed to opening any dispensaries. "After watching Colorado," it is Mr. Armstrong's opinion that any new dispensary must take business from others. IOW, Mr. Armstrong claims to know the maximum amount of demand for medical marijuana, even though this country has never had an experience with MJ like we are having now. He says Coachella Valley has less than 150,000 people - and he admits he came up with that number by adding the population of DHS with the population of Palm Springs. Period. Other areas of Coachella Valley have either no people or no people who want medical marijuana, I guess. "General rule of thumb for a successful medical cannabis facility: one dispensary per 20,000 people," he said

Let's take Riverside County. The population is 2,293,000 (2013) so that works out to a need for 114 dispensaries, if we use that dubious figure of one dispensary for every 20,000. The only legal dispensaries in Riverside County are in Palm Springs and Desert Hot Springs, where there are a total of 10 legally operating MMJ dispensaries. Using Mr. Armstrong's calculation, we still need 104 dispensaries just to satisfy our county's residents. But one might also add in San Bernardino and Imperial Counties, since they have no legal dispensaries. Medical marijuana patients in those two counties must travel to Los Angeles, San Diego or the Coachella Valley to find a legal dispensary. Add in 2,088,000 for San Bernardino County and 176,584 for Imperial and we've got a 3-county population of 4,557,584 or a need for 226 dispensaries, putting us 217 dispensaries shy of his theoretical saturation point.

More modestly, the nominal population of the incorporated areas of Coachella Valley in 2013 was 361,124. Even without adding in the population of the unincorporated areas or trying to calculate what effect the tourists could have on demand for MMJ, that number divided by 20,000 is 18, so we need at least 9 more operating dispensaries, if Mr. Armstrong is correct.

Mr. Armstrong went on to say that with the market over-saturated, businesses will fail, making it difficult for patients to get their medicine. Why would an over-saturated market collapse into a market of short supply? Wouldn't the number of dispensaries shrink to the point where they are all profitable. If it's difficult for patients to get medicine, that's untapped demand, which would signal the need for additional dispensaries. He said the severe competition would INCREASE prices! I don't know what business school Mr. Armstrong attended, but increased competition tends to lower prices.

He asked the Commission to delay new approvals while the Commission conducts an independent evaluation of the cannabis industry in Coachella Valley. This is something outside the purview of the Planning Commission. They are not required (and probably not permitted) to take into account the expected profitability of a proposed business. One assumes the entrepreneur who is risking his money has taken care of that. Mr. Armstrong (not unsurprisingly) offered to assist in conducting that evaluation. Mr. Armstrong, then, is a part of that small niche of the cannabis industry: self-appointed experts who will explain the complex cannabis industry to overwhelmed city leaders. Uh-huh. He said that when more dispensaries open in the valley (Palm Springs, Cathedral City, Rancho Mirage, Indio are the cities he listed, although I'm sure Indio and Rancho Mirage have bans on dispensaries), all the dispensaries in Desert Hot Springs will be eradicated. He did not offer an explanation as to why all DHS medical marijuana patients would seem to prefer to shop in other cities, according to his prediction.

Benno Pabst and Valley Compassionate Care

This would be for a CUP for a medical marijuana dispensary on the southEAST corner of Palm Drive and Fourth Street. That would be this former Chiropractic office:

The applicant had requested a continuance to the March meeting. The Commission approved that 4-0, Vice Chair Dirk Voss being absent.

Eduardo Rivera and D.H.S. Alternative Healing Corporation

This was for a CUP for a medical marijuana dispensary at 66328 Pierson Boulevard. That's this building and the dirt lot to its east, although the applicant now wants that dirt lot excluded from the proposal, as doing so will eliminate some requirements for landscaping and curb repair:

This one came to the Planning Commission in January, but needed a lot of work before it could be approved. Most dispensary applicants have met all the minimum requirements and are offering extras above that by the time they get to the Planning Commission. Not this one, though. Specifically, it needed a paving and landscape plan, removal of wheel stops, removal of all chain link fence, removal of the front fence and gate, a photometric plan, painting exterior conduit to match the building exterior.

A member of the public, Joseph Miner, had submitted written comments that were critical of granting this CUP. Planning Commissioners discussed whether the hearing should be continued. The applicant had brought his attorney along. The attorney addressed the commission.

One member of the public, name sounded like Bruce Newell, not a resident of DHS, got up to comment on this matter. He expressed a general opposition to marijuana that I won't summarize, except to point out one statistic he delivered. He cited the "American Medical Board." I haven't been able to find an organization with that exact name, although it's part of the name of a lot of organizations. But the AMB says that 17% of kids who try marijuana under the age of 24 will develop mental illness. Is it pure coincidence that 17% figure is very close to the 18.2% rate of mental illness in the general American population?.

Commissioner Cirner moved to continue. Approved 4-0.

Umberto Bagnara, Southern Cal Medical Marijuana Patient Association

This is going to be the second dispensary in the Mission Lakes Marketplace, 64949 Mission Lakes at Little Morongo Road. The applicant stated that his lease at that shopping center includes a provision that there will not be more than two dispensaries there.

Commissioner Terifaj said she had invited Ian Armstrong to this meeting. She said he represents the American Cannabis Chamber of Commerce. I wrote about that when I first heard Mr. Armstrong speak at December 8, 2015, Planning Commission meeting.

Chair Romero moved to approve as written. Seconded by Andrew Cirner. Commissioner De La Torre wanted to amend it to ban the use of neon signs in the windows, but that amendment was not included. [The other dispensary there already has a neon Open sign.] Commissioner Terifaj expressed her concern that too many dispensaries were being approved and some would end up going out of business. Approved 4-0.

Jason Foster and CV Wellness

This is for a CUP for a dispensary at 11555 Palm Drive. The two buildings on the southwest corner of Palm and 4th which were both dentist offices at different times; the one set back from the street, second door south of 4th, is 11555 Palm Drive. The lot has parking for seven vehicles. Like Sungrow, this dispensary plans to have separate entrance and exit doors for greater security.

Commissioner Terifaj moved to approve as presented, but after being questioned by the attorney, she amended her motion so that it neon signs would not be permitted anywhere on this site. But then upon further questioning she revised that so that neon signs were banned only from the windows. But, I point out, only neon is neon. The commission probably intended to ban all lighted signs from the windows, but they banned only neon. LED signs are much less expensive and just as effective and flashy. Approved 4-0.

Lisa Lozano and Stephanie Bodde and Desert Hot Springs Dispensary

This is for a CUP for a dispensary at 66406 Pierson Boulevard. That's the little building immediately to the east of Haidet's Hardware.

There is no parking on site, other than the single handicap parking spot. Ms. Terifaj, concerned for the lack of parking, said the front building was not built for commercial use. There is a small house at the back of the property that someone is living in.

The owner of Rose Mortuary next door to this site objected to the odors that would emanate from the dispensary.

Thomas Moen, funeral director at Rose Mortuary, expressed his opposition to the dispensary. He said the driveway is not paved. Also, the mortuary business is very sensitive, he said. He pointed out that the Rose Mortuary is one of extremely few businesses in DHS that draws business from across the Coachella Valley and the high desert.

Another owner of Rose Mortuary expressed his objections as well. He was mostly concerned with the lack of parking, while the two neighboring businesses do have parking lots. He thinks dispensary customers will park in Rose Mortuary's parking lot.

The applicant for the CUP said that her security guard would be out front making sure no one parked illegally. She had reached out to Rose Mortuary, but they had not responded until this meeting. She said there will be more odor coming out of the mortuary's crematory stack than out of her dispensary. She went on to say that she will be operating as a non-profit. Currently she provides medicine to women who are with Rosie's Place at her own expense. She said the retail sales at the dispensary will support her charitable work. Commissioner Terifaj asked her why she needed a location on a busy thoroughfare like Pierson when she already has a clientele, many of whom do not live in DHS.

I might remind Ms. Terifaj that the dispensaries are limited to the commercial zone. If we've got a commercial zone that is NOT on a busy thoroughfare, then it's probably zoned wrong.

The applicant said she thinks she's got a perfect location. She said that the city requires the applicant to have secured a location before they can begin the application process. There was a scramble for buildings and there weren't a lot of choices. She said she had reached out to Rose Mortuary because she thinks they serve much the same population and she hoped to establish some cooperation, but Rose Mortuary never responded to her until they walked into this meeting.

An owner of Rose Mortuary came to the podium again to point out the city's requirement for parking at commercial facilities, which is one space for every 250 square feet. This location doesn't have anything close to that minimum. The owner of the building said that the city code applies to new construction only. His building is grandfathered in.

Rich Malacoff said that there is no grandfathering on the parking rules in this case. This is a CUP process, so the Planning Commission can establish the parking requirements.

Community Development Director Nathan Bouvet suggested the Planning Commission continue this item because it seems there are several items to be resolved: width of the driveway, parking, architectural amenities, site width.

Commissioner Cirner was concerned that handicap access may not be adequate.

Commissioner Terifaj moved to continue and to make a field trip to the site, by which she meant individual trips, not a special meeting of the Commission. Approved 4-0.

Filed under Desert Hot Springs,Marijuana | permalink | March 2, 2016 at 06:28 PM

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