Nevada City looks to OK adult-use cannabis businesses |

Nevada City looks to OK adult-use cannabis businesses

Nevada City took a first, tentative step toward allowing businesses to manufacture and sell adult-use cannabis.

City Council members asked staff to put together a checklist of considerations to forward to the Planning Commission, in order to potentially amend the city ordinance that currently allows only medical cannabis.

Last year, the city council passed an ordinance that allowed for the establishment, permitting and regulation of medical- only cannabis cultivation, manufacturing, distributing and testing laboratory businesses. More than a dozen ancillary manufacturing, distribution and testing businesses are currently in various stages of the permit process to open in Nevada City.

In February, the city awarded its only dispensary permit to Elevation 2477’, with the provision that it would examine its operation after a year in business with an eye to allowing two more dispensaries to open up.

Elevation 2477’ received its license to throw open its doors in August, after a lengthy permit and build-out process.

But what its owners have discovered is that having a medical-only license could very well be the business’ death knell. They say they have been turning away nearly two-thirds of the people who try to walk through their doors because they do not have a medical marijuana recommendation.

According to the Nevada County Cannabis Alliance, Nevada City is losing out on between $68,184 and $100,000 in additional annual revenue from the sale of both medical and adult use cannabis.

“We would see greater revenue if adult use was added,” agreed City Manager Catrina Olson.

No difference

Cannabis Alliance Executive Director Diana Gamzon told the council that while it had been important to move slowly at the beginning of the process, cannabis was now legal in California and she believed the community was ready to acknowledge that fact.

“There really is no difference in the product” between medical and adult-use cannabis,” she noted. “It’s the same quality and the same testing standards.”

Shelley Salvatore, who works at Elevation 2477’, said the business had started a petition to allow adult-use cannabis that received 528 signatures in one month.

Not allowing adult use is doing a disservice to the community, she said.

Dispensary co-founder Daniel Batchelor told the council his business has not generated any complaints and has only received one negative review, online, because it turned a customer away.

Batchelor estimated Elevation 2477’ has turned away 30 to 40 people every day it has been open.

“As a small business owner, that’s really hard,” he said.

Adult use cannabis is already available in Nevada City, Batchelor told the council, because delivery services operate in the city.

“You’re not getting the revenue from that,” he said, adding that his first tax payment could have been four times larger if he was allowed to sell adult-use cannabis.

Law enforcement

Nevada City Police Chief James Leal and Lt. Chad Ellis told the city council they had concerns regarding the police department’s ability to monitor the cannabis businesses, proposing the addition of a cannabis compliance officer.

“We don’t have the knowledge to follow the new state guidelines, we don’t have the personnel,” Ellis said. “So that oversight does not exist.”

Leal said there have been no calls for service associated with Elevation 2477’, but told the council there have been some issues with already-permitted ancillary businesses. Last week, an Alta Sierra couple who had applied for a medical cannabis business permit was arrested on drug manufacturing charges, although a criminal complaint had not been filed as of Thursday. The business owned by Todd and Alaina Dougherty, Sky Farms, has not completed its conditions of approval and has not yet been issued a permit.

Leal said there was a need for a full-time staff position.

“We’re supposed to be doing inspections, background checks … We’re not scraping the tip of the iceberg as far as inspections or follow-ups.”

During a discussion on using application fees to fund such a position, City Attorney Hal DeGraw noted those would not cover post-permit inspections or compliance.

“We might have to revise our fee structure,” he said.

DeGraw also suggested that city staff compile a checklist of concerns for the Planning Commission to take into consideration before it discusses any amendments to the cannabis ordinance.

That checklist will come back to the council at its next meeting in November. The council also agreed to discuss approving a temporary local authorization for Elevation 2477’, an essential step for the dispensary to gain a temporary state license before the Dec. 31 cut-off date. Both the local authorization and the state license are needed to enter the legal adult-use market.

Contact reporter Liz Kellar at 530-477-4236 or by email at

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