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Commercial cannabis cultivation in rural Napa County could generate $760,000 to $1.52 million annually in taxes, but also cause skunky odors and other potential problems for the wine/tourism industry, according to a new report.

The Napa County Board of Supervisors on Tuesday placed a citizens’ initiative to legalize and regulate commercial cannabis cultivation on the March 3 ballot under the name of Measure J. It also accepted a report that looks at possible effects of passage.

Supervisors faced the choice of either adopting the measure or putting it before voters. Backers collected the required number of signatures to force the issue.

Measure J proponent Eric Sklar disagreed with several parts of the county’s report. But he said Tuesday was a good day.

“The reason I’m happy is we’re having a dialogue after 2 1/2 years about the substance of it,” Sklar told supervisors.

The matter first came before the Board of Supervisors on July 23 and supervisors opted to have HdL Companies and Goldfarb & Lipman, LLP do a 9111 report before acting. A 9111 report, named for a state Elections Code section, analyzes the fiscal, land use and other impacts of an initiative.

Measure J would allow up to one acre of commercial cannabis cultivation on each rural property 10 acres or larger. It would establish setbacks from schools and parks and set cannabis cultivation taxes.

Mark Lovelace, a former Humboldt County supervisor now with HdL Companies, gave a presentation to the Board of Supervisors on the 9111 report. The single biggest impact from a successful ballot measure would be loss of local control, he said, given supervisors couldn’t modify the law to make it more restrictive.

“The initiative deprives the county of the ability to shape the cannabis industry in a way that reduces impacts and is compatible with existing community character and the wine industry,” said a slide that Lovelace showed.

Measure J creators have said that a county commercial cultivation law passed by the Board of Supervisors would be the best outcome. They’ve said they drafted Measure J because the county failed to act. Board of Supervisors Chair Ryan Gregory has said the county has had other priorities.

“If we can work together with you to get this done in the right way, we’d be more than happy to do it,” Cathie Bennett-Warner of the Napa Valley Cannabis Association told supervisors.

But Supervisor Brad Wagenknecht expressed doubt the county can craft its own ordinance prior to the early December deadline for Measure J proponents to withdraw their initiative, if they so desire.

“I wish I could say this is going to happen in 90 days,” Wagenknecht said. “I don’t think that’s even remotely possible.”

Sklar said after the meeting that Measure J backers could withdraw the initiative if the county is making a “good faith” effort to work with them on an ordinance.

“We want you to pass an ordinance. It’s all we ever wanted,” Sklar told supervisors.

But Supervisor Diane Dillon said the county faces transportation, housing and other issues. She asked what priorities the county wants to give up to look at commercial cannabis cultivation.

Napa County has 660 properties totaling 72,000 acres that meet Measure J cultivation standards and are completely unconstrained by the initiative’s setbacks, the 9111 report said. A map showed locations up-and-down the Napa Valley floor, as well as in the nearby hills and mountains.

The report also looked at market forces and what is happening in nearby counties. It settled on 32 acres to 64 acres of commercial cannabis cultivation as being likely.

One problem that could arise from commercial cannabis cultivation is the smell, the report said.

“Cannabis cultivation can bring with it a very pungent, ‘skunky’ odor that is often considered unpleasant to neighbors,” the report said. “Odors are likely greatest during the late summer and early fall.”

County responses to odor nuisance complaints from neighbors could be limited by the county’s Right to Farm law. Measure J requires no setbacks from resorts, hotels, restaurants and wineries, the report said.

“As a result, odor impact from nearby commercial cannabis operations could detract from both outdoor and indoor tasting areas at adjacent wineries,” the report said.

Sklar said odor problems in Santa Barbara and Sonoma counties mentioned in the 9111 report are different matters. Measure J has a limit of one-acre grows, where Santa Barbara County has 100-acre grows.

California law prohibits many common herbicides and pesticides from being present on cannabis. The 9111 report said this raises the possibility of conflict over herbicide and pesticide drift from nearby vineyards.

Measure J backers seek to allow cannabis-related manufacturing and distribution businesses at the county airport industrial area. But the 9111 report said the zoning mentioned in the initiative refers only to the county-owned airport, not the industrial area as a whole. No cannabis manufacturing and distribution uses are likely at the airport.

Sklar didn’t portray this as being a fatal mistake. He said that, if the ballot measure passes, the Board of Supervisors could add the airport industrial area as a potential place for cannabis manufacturing and distribution.

Supervisor Alfredo Pedroza noted the cannabis tax could bring in as much as $1.52 million. But the 9111 report didn’t give details of the potential county government costs related to cannabis cultivation, he said.

Law enforcement and code enforcement costs for non-compliance are difficult to determine, Lovelace said.

The Napa County Farm Bureau opposes Measure J on the principle that a ballot measure is the wrong way to decide such issues. President Johnnie White listed several concerns, among them the pesticide drift issue that might lead to the threat of litigation against vineyard owners.

“Napa County’s economy is fueled by agriculture, namely wine grapes,” White told supervisors.

Voters might soon decide if cannabis might be part of the equation.

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Napa County Reporter

Barry Eberling covers Napa County government, transportation, the environment and general assignments. He has worked for the Napa Valley Register since fall 2014 and previously worked 27 years for the Daily Republic of Fairfield.