Cannabis dispensaries will not be coming to Los Gatos anytime soon.
Los Gatos Town Council chose Tuesday night to maintain the town’s ban on local dispensaries and not add a cannabis tax-related question to the November ballot, following months of public comment and community outreach and work with a town cannabis consultant.
The proposal was seen as a way to boost local tax revenues for Los Gatos, amid rising costs, inflation and a projected $10 million budget deficit over the next five years. However, town staff and law enforcement argued dispensaries would add more administrative burdens to the town and would put strain on an already understaffed police department.
“Because we are such a lean police department, and even with the opportunity of cost recovery for monitoring the regulatory program, it’s the other potential law enforcement costs that may not quite be covered by all the new tax revenue that got us particularly concerned,” town manager Laurel Prevetti said.
Police Chief Jamie Field said the department conducted a resource analysis of neighboring police departments that have dispensaries, and found her department did not have the staffing levels to accommodate dispensaries.
“In our county, unlike Monterey County and other places, we just don’t have the countywide infrastructure of law enforcement support. We would really be on our own,” Prevetti said.
In response to potential state legislation that might require all cities to allow cannabis delivery services, staff recommended council consider adding a ballot question to tax those marijuana sales in Los Gatos.
In order to add a question to the November ballot, four out of the five councilmembers must vote in support. At Tuesday’s meeting, councilmembers Matthew Hudes and Mary Badame were opposed to exploring ballot language further.
“We have to consider that public safety is the top strategic priority for our town,” Badame said. “Even the ordinance, putting it to the voters, concerns me. We’ve already spent $50,000 on a tax consultant.”
Several residents were strongly opposed to commercial cannabis in Los Gatos and spoke at nearly every council meeting this year against the proposal, saying such businesses could risk public safety and give youth easier access to marijuana.
At Tuesday night’s meeting, public commenters were evenly split for and against bringing dispensaries to town.
“Why can’t we work together and create a solution that allows for a legal business for the 21 and older to operate?” Los Gatos resident Donna McCurrie said. “Take advantage of private-public partnerships that can be formed to address concerns for our kids, and work to address the stress on police and town resources.”
Los Gatos resident Lisa Harris said local youth would suffer the consequences if dispensaries were legalized in town.
“They are all going to be affected by this if our town decides to allow cannabis. The dispensaries give greater access and normalizes the use of marijuana. This is not acceptable,” Harris said. “The town, I’m noticing, is focusing so much on money that nobody has really stopped to talk about what does this mean, what are the social implications, and what is going to happen to our kids.”
Consultant Ajay Kolluri of HDL Companies said there are safeguards to keep minors from purchasing cannabis, like checking IDs at the door, tracking and tracing all products and having security guards present.
“Studies do show that underage sale or purchases, underage possession typically comes from family, from friends or from the illicit market,” Kolluri said at a May 4 meeting. “So that is a problem, but it’s primarily a problem with the illicit market.”
The town has strict local ordinances to prohibit the sale of cannabis in town, despite the state legalization in 2016. When marijuana was legalized in California, 62% of Los Gatos residents voted in favor of the change, compared to 58% of Santa Clara County residents and 57% across the state.
The town hired HDL Companies earlier this year, and the consultants projected that dispensaries could bring in hundreds of thousands of dollars in yearly tax revenue to the town.
Two retail dispensaries that each make around $4 million in sales annually could bring in anywhere from $410,000 to $570,000 in added revenue to the town, depending on how highly the town chooses to tax the products, the consultants said,
Neighboring cities with dispensaries, like San Jose, collect all the tax revenue from purchases, regardless of if the customer lives in the city.
Los Gatos worked with ELC Consultants to conduct a scientific survey of a random sampling of residents about commercial cannabis. The results showed 58% of residents supported or strongly supported commercial cannabis in town, while 36% were strongly opposed or opposed to it.
The survey also asked if residents would allow commercial cannabis dispensaries in Los Gatos, and 59% strongly opposed such businesses while 34% were in support.