Caliva

City leaders want to tax Caliva, a commercial medical cannabis business in San Jose, that is proposing a large cultivation/manufacturing facility for the industrial park in south Hanford. Hanford voters would have to approve the tax.

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HANFORD — After one medical pot cultivation business that wanted to come to Hanford dropped out last month, it didn't take long for two more proposals to pop up.

Hanford City Council members were skeptical of the first proposal, an idea from Oakland-based medical pot dispensary Purple Heart Patient Center to expand in to the medical cannabis cultivation/manufacturing business.

But one of the two new proposals – this one put forward by San Jose-based Caliva – is gaining traction.

Early last month, the council directed staff not to issue permits to any medical pot businesses until after local voters weighed in on a medical pot tax proposal slated to go on the ballot in November 2018.

The tax would be levied on commercial medical marijuana cultivation operations and would go toward law enforcement and other needs in Hanford.

Council members said they wanted to see if local residents would support taxing medical marijuana businesses before they decided to move forward with any permits.

That was enough to send Purple Heart heading for the exits.

Purple Heart Spokesman Niccolo De Luca said the company couldn't wait until after November 2018 to get a permit.

Tuesday night, however, the council heard a proposal from Caliva, a San Jose-based operation that does cultivation, processing, manufacturing and distribution of medical cannabis products.

Caliva CEO Larry Thacker said the company is prepared to invest $30 million to $40 million to build a 400,000 square-foot facility in Kings Industrial Park in south Hanford.

The facility would be involved in cultivation, processing, testing, manufacturing and shipping of medical marijuana products, but there would be no retail outlets or dispensaries for the products in Hanford.

Thacker anticipates the hub would generate $200 million to $300 million in revenue within three to four years of starting up.

He estimated it would generate 400-600 jobs. Thacker said the company's average pay is $17.50 an hour.

The company is proposing to pick up all the costs for Hanford to update its ordinance to allow for such businesses to come to town.

Current city ordinances forbid any commercial marijuana cultivation or manufacturing operations in city limits.

The company is also proposing to cover all Hanford's costs for the stepped-up law enforcement, monitoring, background checks and other expenses the city expects to incur if Caliva eventually comes to town.

Thacker made it clear to the council that the only way it would work is if Caliva can get a local permit nailed down by the end of 2017.

That's when the state is expected to start issuing state permits for cultivation businesses to operate.

Thacker said in an interview that the state won't issue a permit unless Caliva first obtains local authorization.

"The state has indicated they are going to limit the number of medical cannabis [cultivation] permits," he said. "Because of the unknowns at the state level, it's important for companies to get their rights [to operate locally] established as early a possible."

That argument seemed to carry weight with members of the City Council.

They also seemed persuaded by the fact that Hanford Police Chief Parker Sever toured Caliva's San Jose facility last year and declared it to be a well-run operation.

Hanford Mayor David Ayers said in an interview that he likes Caliva's proposal.

"They presented it in a very professional way," he said. "They seem to know all the hurdles they have to go through."

Ayers stressed not only the difference between medical pot and recreational marijuana, but also the fact that Caliva's product would be shipped out of Kings County.

Most would likely end up in the Bay Area and Los Angeles.

"I think there's a lot of fear in Hanford of it being recreational marijuana," he said. "It's not. It's medical."

"I feel very comfortable with the security and safety measures [Caliva] has in place," said Councilman Martin Devine in an interview.

Councilman Francisco Ramirez said in an interview that he didn't want Hanford to be left behind as medical marijuana cultivators look for a Central Valley location to serve as a distribution hub approximately halfway between the Bay Area and Los Angeles.

"Either we're going to be a pioneer, or we're going to get left in the dust," he said.

Ramirez said if the tax measure passes, the facility could generate "millions of dollars for our community that could be used for public safety, that could be used for downtown."

Thacker said the idea is that by the time the tax proposal goes on the Hanford ballot in November 2018, "[Our] facilities will be producing revenue to tax."

Also on Tuesday, the council discussed a letter received by a Southern California-based company called Hanford Gardens.

The letter says the business wants to have "48 35,000 square-foot buildings" in Kings Industrial Park – a total of 1.68 million square feet – for medical pot cultivation, extraction, testing, branding, marketing and distribution.

The letter also says the company is excited about "the prospect of doing a microbrewery or steakhouse at the Bastille" in downtown Hanford.

Hanford Gardens, unlike Caliva, has not yet formally presented its idea to the City Council.

Hanford Gardens officials couldn't be reached Wednesday for comment.

"We'll see what happens going forward," Ayers said. "Until they publicly come out with a plan, it's just a proposal."

The reporter can be reached at snidever@hanfordsentinel.com or 583-2432. 

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