A Healthy Economy

Real estate properties in Coalinga are selling at an accelerated rate, and the reason is because voters approved commercial cannabis cultivation last November. Coalinga is the only city in Fresno County to take a leap of faith and embrace the new industry by allowing cannabis cultivation. There are no other cash crops available in the area that have become as lucrative as cannabis. The city recently sold the Claremont Custody Center to Ocean Grown Extracts in hopes of turning the abandoned prison into a major cultivation facility. That and other sales are helping the city erase its debt and bring business to the area. The effects of embracing commercial cannabis has done wonders for the city’s real estate scene, which is booming like never before.

A study conducted by the University of Mississippi suggested that the effect of legalizing cannabis increases the valuation of residential properties. Residential property values in Colorado and California were analyzed following legalization. The increase in property values in Coalinga can also be attributed to laws that allow cannabis operations.

“Once the city of Coalinga started allowing [commercial cannabis cultivation], investors and other people were coming in and buying up property.”

Ordinance No. 797 was adopted by city council on November 3, 2016 and established permanent regulations for licensing commercial cannabis facilities in Coalinga. The ordinance allows businesses to conduct cultivation, processing, extraction, manufacturing, testing, distribution and transportation  under Conditional Use Permits and Regulatory Permits. Licensing fees cost up to $100,000 per year. Facilities are also taxed based on square footage and pay a $400 fee for every employee that is hired. All these fees add up and contribute to eradicating Coalinga’s crippling debt, which is quickly disappearing.

Johanna Duval-Alvarez is a realtor and broker for Golden Hills Real Estate in Coalinga. With the advent of commercial cannabis, Duval-Alvarez said that land properties in Coalinga have been valued at up to 10 to 15 times what they were previous valued. “Real estate has been increasing in the area,” Duval-Alvarez told CULTURE. “Sales, as far as residential, have been on the rise or should I say, slow rise, in the past couple years. And now with medical marijuana, I would definitely say land is selling a lot more than it used to be. Actually, commercial property has been a little more stagnant than residential, of course.” Commercial property is limited to industrial zones in the city.

Bob Marley’s youngest son, Damian Marley, famously became the face of Ocean Grown Extracts, which is converting Coalinga’s Claremont Custody Center into a massive cultivation facility. The city ended up selling the massive property at the former prison for $4.1 million dollars. That sale alone paid for $3 million of Coalinga’s debt. Part of Coalinga’s allure is its relative proximity to the Bay Area, which is so expensive that cannabis companies are taking their business elsewhere, including Coalinga.

Duval-Alvarez attributes the change of pace to commercial cannabis and has no problem with it. “Medical cannabis is the reason for the growth,” she noted. “For the residential aspect, definitely; for the commercial aspect, there was land zoned for light manufacturing that just sort of sat there for some time, for over a year or sometimes two years on some of these properties. Once the city of Coalinga started allowing [commercial cannabis cultivation], investors and other people were coming in and buying up property. If anything, in my opinion, it will just bring more work, more business and more tax revenue to the community.”

Every time a commercial lot is sold, licensing fees and employee fees help to fuel city infrastructure, city paychecks and public safety. Coalinga Mayor Nathan Vosburg said he is happy about the results he is seeing from the benefits of commercial cannabis. Other industries could follow because of the jump start that was the result of allowing cannabis cultivation. “As far as I know, the city is opposed to it,” Duval-Alvarez added. “But the Mayor is looking to make more revenue for the city and he sees the good in it.”

Available land in Coalinga have all but disappeared, which is great news. The local economy that once depended on the town’s prison and oil drilling is long gone, but commercial cannabis cultivation is proving to be not only good for the city’s economy, but great for real estate property values as well.