Consultant says Merced could get $1.6M a year — if it allowed recreational weed shops

Merced stands to make as much as an estimated $1.6 million a year in marijuana tax revenue if it allowed recreational marijuana, according to the city’s weed consultant.

A report on the legalization of recreational marijuana came Monday, a few days before the unofficial marijuana holiday, from Merced’s marijuana consultant, Fairfield-based SCI Consulting Group. Thursday, April 20, is considered a weed holiday to many marijuana aficionados.

The City Council approved four medical marijuana dispensaries and indoor cultivation during a July meeting. Those dispensaries would not sell recreational pot.

Merced’s spot along Highway 99 could make it a “dream location” for attracting marijuana buyers, according to Neil Hall, the city’s pot consultant.

Voters approved Proposition 64 in November, making recreational use of marijuana legal for adults 21 and over. Adults are allowed to carry 1 ounce of marijuana or 8 grams of concentrate under the new law, which also allows people to have up to six plants grown indoors.

A tax on a specific item, like marijuana, requires approval from voters, Hall noted.

He went on to say the city could start with relatively low taxes to allow the businesses to get on their feet, because the legitimate business can help quash black market marijuana.

“You want these people to be in place as long as possible, as long as they’re following the law,” he said.

The city can expect “tens of thousands” of applications for the four dispensaries, Hall said, adding consultants expect to develop a process to pick winners through a balance of merit and chance.

The state has said it expected to begin taking applications for dispensaries on New Year’s Day 2018. Applicants would need to already have been approved by the city.

Hall recommended a number regulations, including a security foyer in dispensaries, panic buttons and odor controls, to name a few.

Councilman Josh Pedrozo said he’d like to look closer at potentially allowing one or more medical marijuana distribution centers.

The consulting group is expected to organize a community meeting on May 9. The time has not yet been announced.

This story was originally published April 17, 2017 at 7:47 PM with the headline "Consultant says Merced could get $1.6M a year — if it allowed recreational weed shops."