WATSONVILLE — Now that recreational marijuana has been legalized in California, the state stands to gain more than $600 million in tax revenue during the first full year, officials estimate.
The sales are driven by the increasing number of dispensaries popping up throughout the state, and research firm BDS Analytics estimates cannabis sales in California by the end of 2018 will come in at $3.7 billion, and $5.1 billion in 2019.
But as Watsonville develops its marijuana ordinance piece by piece, the so-called “green rush” will take a little longer to reach the city.
The Watsonville City Council approved medical marijuana cultivation in the city in January 2016. Over the next two years, it further updated its ordinance to allow not only cultivation, but manufacturing and distribution of marijuana for both medical and recreational uses, and capped the number of facilities at six.
Dispensaries are still prohibited in Watsonville, and the city council will not be considering lifting that restriction this year, according to Community Development Director Suzi Merriam. She added that the council will likely consider allowing the city’s permitted facilities to test their products later in 2018.
While the state is expected to see a boost in tax revenue from marijuana sales, Watsonville’s numbers are lagging behind.
According to a budget report by Administrative Services Director Cynthia Czerwin, which was presented to the council in late February, the city is expected to only net nearly $80,000 from its 2016 voter-approved cannabis tax in the current fiscal year. Those numbers are well below the $825,511 the city budgeted, the report stated.
The reason? Merriam said only one of the permitted facilities (Santa Cruz Veterans Alliance) has gone online, while the rest were, among other things, waiting on electrical upgrades from Pacific Gas & Electric.
“Our developers are still dealing with PG&E and slow service times,” she said.
However, most of the facilities are getting close to operational as of Monday, according to Merriam. Two more facilities have received power and are close to their final inspection, and should be up and running by the end of the month.
Two others are awaiting PG&E upgrades, while another facility is still under construction.
PG&E spokeswoman Mayra Tostado said the electrical process could take anywhere from two to three weeks or four to six months, depending on the size of the project and the infrastructure required.
“There are no delays specific to Watsonville,” she said. “Project timelines can vary greatly depending on the type of service a customer requests and the conditions in the surrounding environment.”
