New cannabis shops move toward opening in Atwater, raising weed businesses to five
The first steps to open two new cannabis businesses were approved this month by Atwater City Council.
The City Council on May 11 unanimously passed the introduction of development agreement ordinances with Global Greenz and Sycamore Manufacturing to operate cannabis business pilot programs. A second reading of the ordinances and a 30 day appeal period must take place before the businesses may officially move forward.
The news comes as Atwater on Friday approved a resolution making it a “sanctuary city” for businesses, despite the governor’s shelter-in-place order.
Global Greenz will set up shop at 370 Airpark Road. as a retail cannabis business/dispensary .
The new dispensary will make its Atwater home in a currently vacant building. “We don’t like to see empty storefronts or buildings,” said Atwater Community Development Director Greg Thompson.
Thompson estimated Global Greenz could be ready to open its doors in as soon as four months. “We have been very fortunate in that where businesses still under development seem to be pushing forward in light of what’s going on,” Thompson said. “They seem to feel positive that this is going to remedy itself and we’re gonna be past this.”
Sycamore Manufacturing, LLC will open its doors at 1715 Sycamore Ave., although not for some time. The area where it will be located is lacking in infrastructure and utilities, Thompson said. The new cannabis business will establish that much-needed infrastructure along Sycamore Avenue.
This will facilitate a domino effect of other businesses more easily connecting the water mains and other necessary infrastructure, Thompson said.
Once construction finishes and the shop is ready to launch, it will operate as a vertically integrated cannabis business consisting of manufacturing, retail and distribution.
Atwater cannabis businesses growing
The two new stores will raise the city’s number of cannabis-related businesses from three to five. Thompson said several other diverse types of cannabis-related businesses are in the works.
Two of the three current shops have remained open during the pandemic under the governor’s orders, which deem cannabis businesses essential, Thompson said.
The new cannabis businesses are on a three year contract, during which time they will pay a public benefit to the city to offset any burdens upon infrastructure, services and neighborhoods. The money typically goes toward police and fire, Thompson said.
“New business is good for Atwater, and we try to be very business friendly,” Thompson said, but noted, “The cannabis businesses have been a little slow to start, so it’s probably too early to tell how much of a financial impact they’ve had.”
Citing competition from the black market leading to unexpectedly low sales, Atwater’s first dispensary Medallion Wellness asked the city to adjust its contract last year.
The dispensary had agreed to pay the city $15,000 monthly, but sales in its inaugural month fell short of $14,000. City Council voted 4-1 to change the store’s monthly payments to 5% of gross monthly sales.
Global Greenz’s contract also settled on a $15,000 monthly payment, or 5% of gross monthly receipts, to the City of Atwater during its first year in business. Its second year, the public benefit rises to $25,000 per month or 5% and to $40,000 or 5% per month its third year.
Sycamore Manufacturing, LLC’s public benefit is set at 5% of gross monthly receipts.
Only time will tell whether the dispensaries are lucrative enough to reach payments in the tens of thousands. Thompson said the cannabis businesses is especially uncharted territory in the Central Valley.
“There’s no yardstick yet to hold up these businesses to see how well they’re doing,” he said. Six to eight more months in business will give the city a better idea of how legal cannabis has benefited Atwater, he said.
In addition to the burgeoning cannabis businesses, Thompson said he has a stack of new business plans possibly coming to Atwater. The business community has faith in the city, he said.
Still, Thompson noted the difficulty local businesses are facing due to closures mandated by the state during the pandemic.
“I know that a lot of our business community is concerned,” Thompson said. “That’s not just limited to cannabis, but all of the businesses . . . are concerned because of the current mandates and the protocols that have been set by the Public Health Officers.”
This story was originally published May 18, 2020 at 11:01 AM.
