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Cannabis manufacturing businesses moving into Eureka

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EUREKA, Calif. - Businesses on Eureka's West Fourth Street are entering a new era of cannabis. "It's what keeps me up at night, trying to think about what we are going to do when we may have to move," said Adam Dick, co-owner of Dick Taylor Craft Chocolate in Eureka. "It's really frustrating."

A small section of West Fourth Street, from A Street to Broadway Street in Eureka, is attracting new interest for marijuana manufacturing. The controversy stems from a small section of Eureka that falls outside of the heavily-regulated coastal zone. A three-block stretch of West Fourth Street is exempt from regulation by the California Coastal Commission. That means, light industrial cannabis businesses may apply for permits to do business in that particular area.

"There's one small spot outside the coastal zone that allows manufacturing currently, and that's where we're seeing activity," said Rob Holmlund, Eureka's director of development services.

The activity has some existing businesses worried, including Jared Livella, the national sales director of Rita's Cafe.

Rita's Cafe rents a building on West Fourth Street. The tenants are worried that they may be forced to leave the area if the building is sold to a cannabis business.

"There's been a lot of confusion, and there's been a lack of clarity regarding exactly who's buying this particular location and when, and if, it's even sold," said Livella.

"We're starting to see it happen now, where some landlords in the commercial and industrial zones have been informing their longtime business renters that they're going to be evicted this year; so that the landlords could make way for having a lot of manufacturing and cultivation sites instead," said Vice Chair of the Eureka Planning Commission, John Fullerton. The issue has arisen because the city only allows cannabis manufacturing in light industrial zones, and the section on West Fourth Street is currently the only light industrial zone that isn't subject to the rules and regulations of California's Coastal Commission.

"We're starting to see some turnover of properties in that particular area along Fourth Street," said Eureka City Manager, Greg Sparks. "The city did an economic study to try to get a handle on what the impacts are going to be." Some businesses in the area are worried that they may be displaced by cannabis extraction businesses who are willing to pay more for real estate and leases in the area.

"A lot of long-time Eureka businesses are going to be forced to either move out of Eureka or close their doors," claims Fullerton. "And this is going to cost Eureka jobs. It's going to have the impact of attracting fewer tourists and fewer customers to the shopping districts for the other businesses that do remain in the commercial areas." The city said it has already received 16 permit applications from cannabis-related businesses. Each application falls into a different category: Seven have applied for transportation businesses, four for manufacturing (which includes cannabis extraction businesses), two for testing labs, one for distribution/warehouse, one for a cultivation business and one for a dispensary.

"Several businesses apparently are being sold now and changing hands with cannabis businesses wanting to buy and own buildings," Holmlund said.

Dick Taylor Chocolate and Rita's Cafe are of the general sentiment that marijuana extraction next door will not only be bad for business and image but will also drive up real estate prices in the area. They are worried about getting pushed out as well.

"I had two individuals approach me who said they wanted to take a look at the building. I would appreciate if they would take into consideration and be a little more empathetic regarding the businesses that have been here for so long as opposed to, 'You gotta go,'" said Livella. "It seems like what potentially could happen is that they're just going to push out all these businesses that are already here and already making money. I would just love to see this pursued in another location so that the businesses that are already active and thriving here on this street can stay," said Dick. When asked for a statement, the City of Eureka's Mayor, Frank Jager, said, "The whole marijuana thing is a big change for the City of Eureka and the State of California, and I'm not so sure it's going to be a good thing." Not everyone agrees, however. Some are on board with the new development.

"Oh, I think it's going to be great. I think it's going to bring to light the positive sides of extraction. How, when it's done right, it can be done safely and efficiently," Said James Filliaggi of BHOgart, a Eureka company that sells industrial extraction manufacturing equipment. Whether this development is good for the city or not, is up for debate. But one thing is clear - it is happening.

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