The Gustine City Council unanimously voted on Tuesday to extend the agreement terms for two cannabis businesses.

Tip Top Farms, located at 377 4th Street, will have its development and operating agreement extended until Dec. 31, 2026. Both agreements were originally set to expire at the end of this year. In addition, Flavor Farms's developing and operating agreement terms will also be extended until the same dates as Tip Top Farms'. 

“We’re very pleased with the city council’s decision to renew our agreement with them,” said Andy Sanchez, the owner of both businesses.

According to the staff report, the Gustine Police Department did not find Tip Top Farms causing any nuisances or increasing crime within the city.

“It was brought to fruition because it took us that long to make sure we had everything just the way we needed to have it for its adoption, so it’s a benefit for the city and not a drag on the city,” said Mayor Pat Nagy. “We’ve enjoyed good relationships with those business owners.”                                                                                                                          

In September 2019, the city council approved the operating agreement for Tip Top Farms. The business, which opened in January 2022, currently serves as a cultivation, retailer, and distributor of cannabis. Sanchez stated that the shop doesn’t distribute to third parties as they distribute within the business.

In a PowerPoint presentation at the meeting, it mentioned that Tip Top Farms has provided six jobs within Gustine at its facility.

The staff report mentioned that Gustine has received close to $425,000 from the start of Tip Top Farms to September 2024, Sanchez stated that the business has paid the city around 6% of its monthly sales along with an annual Community Benefit payment of $20,000.

Nagy said that the annual benefit payments will be used toward specifically anything targeted for the community such as a Fourth of July firework show or the annual color run.  

The same year that Tip Top Farms opened, Sanchez also began the inception of Flavor Farm. The City council approved the use permit, and the development and operating agreement for Flavor Farms in August 2022.

Flavor Farms is a separate entity from Tip Top Farms and currently serves as a cultivation and distribution, not allowing any retail sales.

Flavor Farms has yet to open which has caused the business to not hire anyone in Gustine at the moment. The business will start its benefit payment requirement within the fiscal year that it opens.

According to the staff report, Flavor Farms was initially set to open in 2023 but has faced delays. Sanchez mentioned a factor for the delay was not being able to receive power from PG&E for over a year for the next-door building where Flavor Farms plans operate. The building received power on October 28.

As of right now, Sanchez said they are close to getting Flavor Farms operational as they’re currently in the middle of sheet rocking the rooms and finishing up any interior changes in the building. He estimates that this process will be completed by the end of January 2025.

“Gustine, as a whole, has really been good for us,” Sanchez said. “We definitely like where we’re at with Gustine and our business area.”

Merced County generated nearly $36 million in total taxable sales for cannabis in 2023, according to the California Department of Tax Fee and Administration. The first quarter of 2023 brought in $9.2 million, the most out of last year’s fiscal quarters.