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Coalinga’s new oil boom: Proposal would transform empty prison into cannabis oil production

| Mar 15, 2016 | News

via Fresno Bee


This city founded on the discovery of a petroleum field is looking to strike it rich in a new oil industry. Instead of relying on the black gold pulled from the ground for jobs and economic stability, Coalinga could find future wealth in marijuana by transforming its vacant state prison into a cannabis oil cultivation and manufacturing operation.
Last month, Coalinga Mayor Ron Ramsey and City Manager Marissa Trejo fielded a proposal from Southern California-based Ocean Grown Extracts to turn the 77,000-square-foot Claremont Custody Center into a marijuana growing operation.
The City Council supports the plan, which has numerous economic benefits, but faces a tough battle to convince Coalinga’s 13,000 citizens to become the first community to accept medical marijuana in the conservative central San Joaquin Valley.
Trejo spelled out the economic benefits at a March 3 council meeting.

The lease and tax payments from renting the old prison to Ocean Grown would add nearly $2 million to the city’s bank account each year. The company also would provide 100 full-time jobs with benefits – a number that would double if California legalizes recreational marijuana use in November.
Trejo said Ocean Grown agreed to work with Coalinga police Chief Michael Salvador, who was an outspoken critic of the council’s unanimous decision in January to allow marijuana cultivation, distribution and deliveries within the city. The company would install security cameras and link them to the police dispatch center, as well as perform background checks on all employees and license its activities with the city.
When asked by an audience member about the idea, Salvador refused to comment on the proposal – saying he was not aware of its specifics. Salvador also declined to be interviewed for this story.
Ocean Grown may also use the city’s airport for shipping, Trejo said.
The company would sell wholesale to dispensaries all cannabis oil made in Coalinga. Casey Dalton, Ocean Grown’s representative who visited Coalinga, confirmed that the company was in preliminary talks with the city. She declined to comment any further.
Mayor Pro Tem Patrick Keough was the first council member to address marijuana with the group of around 20 people assembled at the meeting.
“People are hurting – the oil industry is losing jobs,” he said. “We’re talking about 100 full-time jobs, and no dope in the streets.”
Keough then addressed the bottom line for a city that, according to its most recent audit in 2014, is running a $3.3 million budget deficit: “One company could take us out of the red in three years.”
Oil history
Keough’s comments about the oil industry were designed to strike a chord. Crude oil created Coalinga. The city in far western Fresno County grew out of a small mining town founded in the 1890s after a large petroleum reserve was discovered near the Diablo Range.
Miners also discovered coal, which allegedly gave the city its name. The town was once Coaling Station A for the Southern Pacific Railroad. That was then shortened to Coalinga.
Despite recent drops in the price of crude oil, Cindy Pollard, a spokeswoman for Bakersfield-based Aera Energy, said the company’s operations on the Coalinga Oil Field have remained steady over the last few years. Around 40 employees extract around 7,000 barrels of heavy oil each day.
Pollard said that contracting and maintenance positions in Coalinga have been slightly reduced.
Chevron, a principal operator in the oil field, did not respond to several requests for information.
Fresno County does not keep specific statistics on oil and gas extraction jobs, but in Kern County – the state’s main petroleum producer – oil-related jobs have fallen from 12,300 in January 2015 to a preliminary count of 9,800 in January – a drop of more than 20 percent.
Prison town
Although mining gave Coalinga its identity, it is not the only thing that has defined the city over the years.
By the late 1990s and early 2000s, Coalinga could have been called a prison town. Pleasant Valley State Prison employs about 1,000 people, and Coalinga-owned Claremont kept a staff of around 100 before closing its doors a few years ago.
Claremont was crippled in 2011 after the California Department of Corrections did not renew its contract. California had been ordered to reduce its prison population, and Claremont got the ax.
This left the city to pay for both the upkeep of the prison and unemployment benefits for its staff. City officials attempted to convince the state to reconsider and find another tenant, but they were not successful. By June 2014, nearly $3 million was sapped from Coalinga’s general fund.
While it is ironic that a prison that probably held hundreds of drug offenders over the years could be turned into a center for marijuana cultivation, a walk around Claremont explains a lot.
The facility already is fitted with gates, fences topped with barbed wire and surveillance equipment. It has both indoor and outdoor space, and most of its windows appear to be intact. Security is a major concern for residents and cannabis business owners, as both parties don’t want the product stolen and sold on the streets. The facility seems a good fit in that respect.
A variety of opinions from Coalinga’s leaders
Although Keough spoke the longest at the March 3 council meeting, other councilmen offered their views of the proposal.
Mayor Ramsey attempted to assuage people’s fears about the cannabis oil products themselves.
The manufacturing process uses most of the plant, so waste would be minimal, Ramsey said. Ocean Grown’s particular cannabis oil consists of more cannabidiol (CBD) than tetrahydrocannabinol (THC). The THC is what actually makes people high, the mayor said, while the CBD has certain medicinal effects.
“They put it in a vaporizer thing and use it that way,” he told the council and the crowd. “It doesn’t get you high.”
He paused. “Well, I would probably get high if I did it, but those who use it regularly don’t,” he joked, drawing a few laughs from the public.
Councilman Steve Raine said he was “all for this business and similar businesses.” He added that he was still in favor of allowing medical pot dispensaries in Coalinga.
“If we didn’t provide anything for people in need or who are hurting, I’d be embarrassed by that,” Raine said. “No, I don’t want to give it to schoolkids. There are plenty of laws on the books that prevent that.”
Councilman Ron Lander said he was in favor of the proposal but opposed dispensaries. He felt pressured to approve both in January, he said, because of a deadline of March 1 for cities to decide. That deadline was later rescinded by state officials.
Lander recommended that Coalinga sell Claremont to Ocean Grown outright, that way “the city’s name is not attached” to something that is federally illegal.
He also addressed rumors about councilmen or their family members being medical marijuana patients, saying that both he and his wife were not.
Councilman Nathan Vosburg used all of his time to defend himself against similar accusations. He did not comment on the proposal directly, but has been one of the major proponents on the council for allowing medical marijuana.
Dissenting viewpoints
The city could face opposition from Fresno County.
Sheriff Margaret Mims is scheduled to address the Fresno County Board of Supervisors on Tuesday regarding “the county’s potential position on the proposed medical marijuana ballot initiative in Coalinga.”
Mims was among many who spoke out against the council in February after members unanimously approved medical marijuana cultivation, distribution and delivery. Mims has been concerned that such a facility would increase crime.
Later in the March 3 meeting, a community member asked the council to consult with City Attorney David Wolfe on any possible conflicts of interest concerning medical marijuana. Vosburg immediately asked Wolfe about it.
Wolfe said that a conflict would only arise if a councilman could financially profit from dispensaries, cultivation or deliveries. Being a medical marijuana patient would not disqualify anyone from voting on it.
“It’s no different than a prescription drug holder voting on a pharmacy,” he added.
The council did agree on one thing: Coalinga residents should study up on current laws and incoming votes before a March 30 workshop that will discuss the medical marijuana ordinances in great detail.
All five echoed that in some way, but Vosburg again was the most aggressive.
“We had a 5-0 vote at the first meeting, then it turned into World War III,” he said. “People have been mad the whole way through. They don’t show up to meetings, then want to cherry pick.”
Several community members responded by saying the council needs to do a better job publicizing the medical marijuana agendas and discussions. They also lamented over how divisive the medical marijuana discussion has been in the community.
The issue could go to a public vote. The city will invite Ocean Grown and other medical marijuana representatives to the March 30 workshop in an attempt to address public concerns.