GUSTINE - A proposal to create a cannabis cultivation/distribution facility and dispensary along the city’s Highway 33/140 corridor passed muster last Wednesday with the Planning Commission.

Planners voted 4-0, with Sherri Marsigli recusing herself from the deliberations, to recommend that the City Council approve the application by Tip Top Farms to establish the marijuana micro-business at 377 Fourth St.

The proposal drew little public comment and no opposition.

The final decision, however, rests with the Gustine City Council, which is expected to address the application at its Sept. 3 meeting.

City Manager Doug Dunford spoke in favor of the proposal before planners had their say.

“I think it is a good project and will benefit the city,” Dunford stated, adding that the city could see $500,000 or more annually in additional general fund revenues generated by the business. “Basically, cannabis is here. We can control cannabis, or it can control us. We can move forward with this process and we will control what comes into this town.”

The proposal involves creation of a cannabis cultivation facility and retail outlet (from which deliveries would also be made) in the 5,000 square foot building, which currently houses a tent business and is located next to the Gustine Museum.

There would be a distribution element as well, the commission was told, as the business would sell excess cannabis to other outlets and purchase strains of cannabis other than those grown locally in order to meet consumer demand.

“We will grow 90 percent of what we will sell, but we will only grow four different strains,” said Charles Lambert, who is affiliated with Tip Top Farms. “We will be bringing in other varieties from other distributors. We will be buying and selling. Nothing will leave the shop or come into the shop that will be in the public eye.”

No manufacturing of cannabis products would take place at the Gustine site.

Currently, commercial cannabis activities other than the delivery of marijuana are prohibited in Gustine so the proposal will require changes to the city’s municipal and zoning codes as well as other steps.

As part of their action last week, commissioners recommended approval of a zoning code change which would allow cannabis activities in C-1/commercial zones.

“It is not unique to Tip Top Farms,” said City Attorney Joshua Nelson. “(If the zoning change is approved) anyone in the C-1 zone can come before you and request a use permit.”

But, he emphasized, the city would also have the right to evaluate subsequent applications on a case-by-case basis.

A number of safeguards will be in place to protect the city’s interests, staff and consultants stressed.

A development agreement, which was part of the commission deliberations last week, is paired with an operations agreement that will go to the City Council for approval.

Those pacts spell out conditions which the business must meet, as well as defining revenues to the city.

“The development agreement and operating agreement are tied together,” Nelson stated. “Breach of one is breath of the other. They are tied together to ensure maximum control.”

Tim Raney, president of the consulting firm brought in to represent the city in negotiations with Tip Top Farms, said the applicant has submitted an odor control plan and will be submitting a security plan.

All activities at the site, he stressed, will be inside and out of the public eye.

Security will be on-site during the dispensary’s open hours (proposed as 9 a.m. to 9 p.m. daily), Lambert assured commissioners, and other employees working late hours will also provide an element of safeguards. Even when nobody is on site, he noted, a security system will link the business directly with Gustine police.

Greg Greeson, former Gustine city manager who is now affiliated with Raney’s firm, noted that the proposed operations agreement has a three-year term.

“That was done to make sure that this business fits the community,” he said. “If it doesn’t, we can say thank you and off they go.”

The operations agreement did not go before planners for input, but Greeson offered details to the advisory board to give them a better perspective of the overall proposal.

The revenue formula agreed upon, he added, is fair to both parties involved.

“They pretty much mirror the surrounding market, in particular Modesto,” Greeson stated.

Commission Chairman Mike Gandy - who said he was initially not in favor of cannabis but has since found that CDB oil (which is extracted from marijuana) provides relief for chronic neck pain - pointed out that the city’s existing ban on commercial cannabis activities was enacted to protect local control in the decision-making process.

Those prohibitions were adopted with the understanding that they could be lifted should the city so choose, he said.

“This is statewide,” Gandy said of the cannabis movement. “It is not something we can decide that we are going to stop.”

Specifically, the commission action last week approves an architectural review plan for the property and recommends that the council approve the necessary zoning change, development agreement and conditional use permit on the proposal.