UNION CITY — The first ever marijuana dispensary in Union City could open its doors by this summer, allowing the city to begin collecting taxes from the shop nearly three and half years after the city first lifted its longstanding ban on marijuana businesses in 2017.
By a 4-1 vote, the City Council indicated Tuesday it will approve a permit for a new retail store, Flor, in Union Landing, the city’s main shopping center.
The business is proposed by Flor East Bay LLC, owned by a Salinas-based group called Bak Festivals, Inc., which already runs four other dispensaries in the state, in Oakland, San Jose, and two in Monterey County.
Flor plans to open a dispensary at 31000 Courthouse Dr., off of Dyer Street, in a space most recently occupied by a Sprint store.
Councilman Gary Singh voted against a permit for the store, saying he was concerned the city’s youth would “get their hands” on the marijuana products the store sells.
Flor would become the third company to be awarded a permit when the council finalizes the approval later this year, but would likely become the first to begin operations in the city, and importantly, start bringing tax revenue to the city’s coffers.
The shop will cater to the “higher end of the cannabis market and customers over 30,” according to city staff reports, and will be open from 8 a.m. until 10 p.m. each day, and also will offer curbside pickup.
There were no members of the public who spoke during the meeting about the permit for Flor.
Council members who supported the intention to give a permit to Flor said they were impressed by the thorough plans the company laid out for security, outreach to people and businesses nearby, as well as extensive training, advancement programs, and benefits for employees.
“What impresses me is the track record that you have with four or five other locations, where you’ve figured out how to move into communities,” Councilwoman Emily Duncan said during the meeting to Bak Festivals CEO Gavin Kogan. “You’ve obviously figured out the issues and concerns.”.
Councilman Jaime Patiño said people need to get over the long-held stigmas associated with marijuana use, and acknowledge that it is already being used in the city, but not locally regulated.
“If we think that there’s no marijuana in Union City right now, we must be smoking it too,” Patiño said during the meeting. “It’s already here. Now let’s have it regulated, let’s have it so they get good product, the product they need, and quite frankly lets get some money out of this.”.
After voting to allow a limited number of medical marijuana shops to be permitted for the first time in 2017, the council then further loosened restrictions in 2019 to allow for recreational marijuana sales, followed by a change in policy in 2020 to allow one shop to open in Union Landing.
While previous projections said the city could see around $1.4 million annually in tax revenue with three marijuana businesses operating in its borders, the city has yet to collect a cent of tax after permitting a retail shop in 2018, and another in 2020, neither of which have opened yet.
Part of the delays for one of the other businesses is the significant renovations it needs to make to open its shop and other operations, but city staff said Flor should be ready to open within four months of receiving its permit.
“Flor is kind of unique. Unlike other applicants, the site is almost ready. There’s not any extensive site improvements that are needed and its fairly minimal tenant improvements,” Deputy City Manager Mark Evanoff said.
Evanoff said Bak owns four other retail stores, one manufacturing facility and one distribution center, all in California, and in 2019 and 2020, the four retail stores generated $50 million in gross retail sales and $14 million in cannabis taxes to local and state governments.
Evanoff said Flor projects it would generate $279,410 in taxes for Union City in its first year of operation, and $859,359 by 2024.
The company will also give $100,000 a year in grants to Union City-based nonprofits and community programs, staff reports said.
“I think If you move your business in here you will be watched carefully and it will be important that the commitments that are made are kept. Because you will be our first and we’ll have an opportunity to learn from you,” Duncan said to Kogan during the meeting.
“I think everything that you have said is on the money,” Duncan added, “and if you implement as you committed, it will be a good addition to the community.”
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