Grand Terrace, San Bernardino County’s third smallest city populationwise and its smallest in land area, would become the sixth of the county’s 24 municipality to jump on the cannabis-product sales tax revenue bandwagon if its residents are willing to allow that to happen.
Medical marijuana has been legal for sale in California since the passage of 1996’s Proposition 215, the Compassionate Use of Marijuana Act and the sale and use of marijuana for intoxicative effect has been legal in the Golden State since the 2016 passage of Proposition 64, the Adult Use of Marijuana Act.
Both Proposition 215 and Proposition 64 contained provisions that essentially allowed local jurisdictions to maintain the sales bans on the drug that had been in place in the state since 1907. For 16 years after the Compassionate Use of Marijuana Act went into effect, there was no local government in San Bernardino County that would permit medical marijuana to be legally sold. All 22 of the county’s cities, both of its incorporated towns and the county government which holds sway in the 94 percent of the 20,105-square mile county that does not fall within any city or town limits held the line, with controlling numbers of elected officials in every one of those jurisdictions believing that cannabis use represented a deviation from the strictures of an ordered and decent society and accordingly not allowing marijuana dispensaries to legally operate. Many elected officials expressed the view that marijuana was of dubious medical value to begin with and even if it were conceded that it had efficacy in extreme cases such as serving as a pain palliative and nausea-alleviant for those undergoing chemotherapy, whatever salutary value this represented was overwhelmed by the potential that a large segment of the perfectly healthy population, with the assistance of quacks, hucksters, forgers and doctors of questionable moral value willing to use their licenses for profit, would through subterfuge obtain bogus prescriptions to allow them to use the weed for recreational rather than medicinal effect.
In 2012, Needles, San Bernardino County’s smallest city in terms of population and one of its most impoverished, took the first step toward marijuana liberalization, allowing dispensaries to operate.
In, 2015, following the 2014 election which brought Rich Kerr into its mayor’s position and John Woodard onto its city council, Adelanto embarked on what was initially represented as an effort to generate enough money to sidestep what some auditors said was a looming bankruptcy by permitting marijuana cultivation to take place in a specially earmarked portion of the city’s industrial zone. The drug would not be available for retail sales in the city, Kerr, Woodard and City Councilman Jermaine Wright insisted, but the city would see beaucoup tax revenue from the wholesaling of the plants grown indoors within the city to dispensaries outside the city. Thereafter, a frenzy occurred, with applicants for marijuana growing permits forming a line at the city’s planning counter that snaked all the way through City Hall and out the door to encircle half the building. Many of those in line carried briefcases full of cash. In the competition for those cultivation operation permits, those who were willing to pay off city officials prevailed and those who would not were unable to get permits or licenses to operate. In 2016, even before Proposition 2016 passed, Kerr, Woodard and Wright dropped any pretense of limiting Adelanto’s commercial marijuana activity to indoor farms and indicated the city was willing to embrace the new culture of marijuana tolerance in California, so much so that it was their intent to transform Adelanto into the marijuana capital of the world, in doing so generating enough money in permit fees, marijuana excise tax and sales tax that Adelanto would go from being the county’s poorest city to one that would surpass all 23 other municipalities in its per capita government revenue. Indeed, Adelanto became the city’s largest center of commercial cannabis activity when Proposition 64 passed.
In 2017, Wright was arrested by the FBI when it was shown that he was cashing in on the marijuana bonanza himself by shaking down those being permitted and licensed to run farms, distribution operations, cannabis product manufacturing concerns, dispensaries and marijuana shops. The degree to which both Woodard and Kerr were doing the same but flying below the FBI’s radar was blatantly obvious to virtually everyone in the city, even as would-be marijuana-based business operators would hand envelopes chock full of cash to Kerr’s wife at city council meetings. In May of 2018, City Hall and Kerr’s home were raided by the FBI, as were the offices of lawyers representing the owners of commercial marijuana related businesses licensed and permitted in Adelanto. Both Kerr and Woodard were voted out of office by the city’s voters in 2018. In August 2021, Kerr was arrested and charged with having accepted $57,000 in bribes that the FBI’s forensic accountants and IRS agents were able to track as having been provided to him by marijuana-related business owners who were operating in the city while he was in office.
Like Adelanto, with the passage of Proposition 64 in 2016, the City of Needles transitioned, without missing a stroke, from allowing medical marijuana to be grown and retailed within its confines to permitting marijuana intended for pleasure and recreation to be grown and sold in the city.
During the same timeframe, in some of the other cities in the county elected officials were losing their will to hold back the cultural onslaught of marijuana use that pervades a significant element of the population. As early as 2007, the county seat, San Bernardino, was facing the challenge of proliferating unlicensed and unpermitted marijuana dispensaries. The police department acted, forthrightly and sometimes brutally shutting those operations down, but a new generation of San Bernardino residents were not prepared to accept the anti-marijuana ethos of the members of the city council, as both members of the entrepreneurial class and their customers fought back. Virtually every operation to shutter a dispensary was answered with one-and-a-half to two new ones opening up to take their place, while residents continued to frequent those establishments, spending enough money on marijuana so that those businessmen willing to run the gauntlet could make enough money to justify the hassle and expense of being shut down, arrested, prosecuted and fined. At last, then-San Bernardino City Attorney Gary Saenz publicly asserted that the effort to prohibit marijuana use in the city was “futile.”
Despite that, the city council continued to press the campaign against dispensaries, which ultimately resulted in the residents of the city qualifying an initiative for the ballot, Measure O, which legalized marijuana sales in the city. It passed in the same November 2016 election that saw the passage of Proposition 64.
In Hesperia, with the death of Mayor Russ Blewett in May 2018, the staunchly Republican City Council appointed 27-year-old Jeremiah Brosowske, an energetic GOP political operative, to replace him. Once in office, Brosowske revealed himself to be less of a Republican than a Libertarian, one who was determined to end the local government prohibition on marijuana. Working in tandem with the Postmus Cartel, a group of marijuana entrepreneurs who had hired former San Bernardino County Republican Central Committee Chairman/former San Bernardino County Board of Supervisors Chairman Bill Postmus to represent them, Brosowske pushed the city council of which he was then a member, to permit marijuana distribution businesses to operate in the city as long as their sales were mobile ones, i.e., functioning from unmarked delivery vans and other vehicles that brought the product to the door of users and did not sell the product out of the brick and mortar establishments, also unmarked, that served as the warehouses where the vans and vehicles picked up the product they were delivering. Postmus politically wired the transition of Hesperia from a city where any sort of commercial marijuana activity was strictly forbidden to one where the drug is now sold, generating tax and permit revenue for City Hall. He did this in two ways. First, he made the assertion that the marijuana cultural evolution is already a reality and the city should not let the opportunity for revenue generation to be squandered or fall to other jurisdictions. Second, he persuaded the decision-makers – the city council members – by providing them with hefty political donations that swayed them into accepting that such operations should be permitted.
In Barstow, city council members of that cash-strapped railroad community took stock of the reality that the municipality needed more money to provide basic services to its residents. Prompted by citizens inquiring as to when the city was going to get around to updating its ordinances regarding both medical and recreational marijuana sales in the aftermath of the passage of Proposition 64, the city council in early 2019 quietly formed an ad hoc committee to consider allowing marijuana sales within the city’s confines. In the March 2020 election, voters in Barstow were asked to consider Measure F, which called for putting a 15 percent tax on marijuana sales in the city. The voters favored it with 1,186 votes or 55.58 percent in support to 846 votes or 44.42 percent opposed. The measure needed two-thirds approval to pass, however. Still, city officials in June 2021 established a policy of permitting both marijuana cultivation and cannabis retail businesses in the city. At present, the city is on a trajectory for two such businesses to open within the next weeks or months.
Thus, Needles, Adelanto, San Bernardino, Hesperia and now Barstow allow commercial marijuana activity. In the county’s remaining 19 cities/incorporated towns, as well as in all of the unincorporated communities in the county, the sale of marijuana and cannabis are banned. Nevertheless, in all cities and towns and the county areas, the sale of cannabidiol, which is also known as CBD or CBD oil, is commercially available. Cannabidiol is a derivative of marijuana that has no or only mild psychoactive qualities but which is used for the treatment of seizures and epilepsy, anxiety, pain, a muscle disorder called dystonia, Parkinson’s disease, Crohn’s disease, and muscle cramps.
Grand Terrace has seen the scope of its municipal operations contract tremendously in recent years. In May 2020, the number of municipal employees had dwindled to just 12 – including administration and its work force – to cover all operations within the 3.5-square mile, 12,584-population city. Facing a projected $1,116,387 deficit for Fiscal Year 2020-21, it slashed the number of its employees in half, such that it only has six left. One of those works part time, such that now the city is functioning with five-and-a-half employees.
Forced by economic necessity, the council at its May 10 meeting signaled it is open to allowing cannabis entrepreneurs to set up operations and imposing a tax on them that will move the city out of the economic doldrums.
Councilwoman Sylvia Robles indicated she would go along with cannabis-based enterprises if a majority of the city’s residents are not opposed to them and they will provide a definite advantage to the city.
“If we wanted some amenities in this town, we don’t have the ability to raise any revenues through taxes, maybe for a library or for a community center,” Robles said. “I’d like to see what that potential is at least before we say no anything. I’m for something like this being on the ballot, but we have to know what some of the benefits would be.”
Ben Jones of the law firm of Aleshire & Wynder, which advises Grand Terrace on legal matters, told the council any companies the city would permit to operate marijuana-related businesses would be licensed through the California Department of Cannabis Control.
He said the city currently prohibits any type of cannabis-related commercial activity, but the city has the option of allowing any of several types of marijuana-based or cannabis-related operations which are permitted under California law to set up in the city. These would include, Jones said, storefront retail concerns in which customers would be welcome inside and be able to make purchases on the spot. Such storefronts could include employees making delivery of the product to customers. Another type of business that could be approved would be one that is limited to delivery only. Jones said the city could permit the cultivation of marijuana and could authorize manufacturing of products using marijuana derivatives. Testing labs could also function in the city. Microbusinesses, which combine the various types of commercial cannabis activity, could also locate in the city, Jones said.
Any businesses set up in the city would be subject to tracking by the California Department of Cannabis Control, Jones said.
Jones said a municipally-imposed 15 percent excise tax on marijuana and cannabis products is typical.
Councilman Bill Hussey said marijuana is available elsewhere and that it does not need to be sold in the city.
“I think we got enough around us,” Hussey said. “I’m not sure why we’re entertaining putting them here. I don’t see a cannabis dispensary being good in Grand Terrace.”
Councilman Doug Wilson concurred, saying “Beyond my personal feeling, I think I have good experience in relation to whether good fruit can come from further intoxicants and I don’t believe so. So, I would oppose anything like this or further research on it. The collateral damage of intoxicants outgrows any considerations for even just the immediate situation. My own personal opinion is vehemently against anything in relation to intoxicants and I believe I represent a good 20 percent of this community’s feeling.”
Councilman Jeff Allen indicated he was not enthusiastic about retail establishments selling marijuana or cannabis products in the city, but said he knew of examples of cannabis-related businesses elsewhere that are kept out of public view, such as cultivation, manufacturing and testing facilities that are very low profile but will employ people and generate tax revenue.
There are all kinds of intoxicants, Robles said.
“We have all these liquor stores and all this other stuff,” she said. “I frankly think liquor is worse than cannabis, but I’m not here to worry about that. I don’t know if we have enough cannabis shops around here or not. I would think in our deliberative process we should go a little further. One of the things could be we don’t do anything unless the voters agree. My thing is I don’t think we should do any growing or manufacturing or any of that. The most it should be is retail. There’s suitable areas in Grand Terrace that aren’t in the main square or near schools, away from the freeway where it would be very discreet.”
Mayor Darcy McNaboe said, “There are a lot of different licenses to consider and I think that’s far more than a council meeting has an opportunity for examination. I would like to see, if we move forward with any further discussion, actually its own stand-alone meeting.”
In determining what sort of businesses the city will permit, McNaboe said, the city should allow for a comprehensive ballot that would allow the city’s residents to weigh in or outright make that decision.
–Mark Gutglueck