The Los Gatos Town Council voted 4-1 late in the night on Jan. 18 to pay a consultant up to $50,000 to study the feasibility of allowing retail cannabis sales in Los Gatos.
The consultant’s work would focus on community outreach and evaluating how much retail cannabis sales could bring to the town. The consultant would also look at allowing delivery services to set up business in Los Gatos.
Councilmember Mary Badame opposed the motion to hire a consultant.
“Recently, this council held a public hearing to strengthen ordinances relating to substance abuse by our teens and social hosts. Cannabis use impairs judgement and that’s medical science. Why would we want to add cannabis to the mix?” Badame asked.
Vice Mayor Maria Ristow argued that “cannabis can be abused, of course, and so can alcohol and so can a lot of other things. I think if we don’t continue getting information and vetting this out we’re just basically (losing) an opportunity to provide local retail to residents who want to shop in town and we’re losing an opportunity to collect sales tax.”
Currently, people who buy cannabis products pay a 15 percent excise tax, plus the local sales tax and any special taxes that are levied by municipalities. For example, San Jose levies a 10 percent tax on purchases, in addition to the city’s 9.375 percent sales tax, for a total tax of 33.375 percent.
The main concerns about bringing cannabis sales to town include crime, buffer zones from schools, parks and daycare centers, traffic and parking.
Interim Town Attorney Rob Schultz presented the results of a survey conducted last fall that showed 563 of the 948 respondents opposed cannabis sales in town; 353 favored it and 32 had no opinion.
One respondent wrote, “Cannabis is readily available all over. There is no need to cater to users in the small town of Los Gatos. At all.”
A respondent who favored cannabis sales wrote, “Many elderly friends of mine in LG have to drive to San Jose to get this product for Parkinson’s, sleep problems and general relief.”
All opinions were counted, even though some respondents live in Campbell, San Jose and Saratoga. “I grew up in LG and live in Campbell now. Parents live in LG and I still consider myself a part of the LG community,” a respondent wrote.
That definition could apply to Mark and Brie Matulich, who grew up in Los Gatos. They now live in Campbell and founded San Jose’s Airfield Supply in 2010 as a medical dispensary.
Airfield is now one of the state’s largest retail dispensaries and hopes to open a retail store in Los Gatos if the council decides to move forward.
“We have 2,024 customers who are Los Gatos residents,” said Airfield’s chief marketing officer Chris Lane. “We believe Los Gatos deserves a premium shopping experience, even though people are willing to come to us.”
Lane’s comments came at a Jan. 13 community meeting sponsored by the Democracy Tent.
Lane told the group that Airfield doesn’t release revenue figures, but said the average customer spends $84 per visit; Los Gatos residents spend an estimated $1.2 million annually.
“If Los Gatos had a 5 percent tax of its own, we feel very confident that we could contribute $300,000 to Los Gatos in (annual) revenues and I think that’s low,” Lane said. “It would be double that if you pull in Campbell.”
If the town council ultimately decides to allow cannabis sales, voters would decide if it should be taxed and by how much.
The consultant’s report is expected by June.
