Creative Use of Innovation Zone Designation Promotes Marijuana Industry

Creative Use of Innovation Zone Designation Promotes Marijuana Industry

The Arcata, California City Council recently approved the creation of a “Medical Marijuana Innovation Zone”. The 5-0 vote requires further study and the preparation of a zoning ordinance. If finalized, Arcata, a small town in Northwest California, would create what could be the first ever land use designation which would promote and regulate medical marijuana sales and production.

Arcata has not gone so far as to offer any economic or other incentives to attract medical marijuana businesses. But, it hopes that the new innovation zone will cause lease rates to increase as new businesses come into the market because of the industry friendly market. In addition, the city believes that a new type of tourist, a medical marijuana tourist, might begin to visit the city.

But has Arcata gone far enough in creating this innovation zone? The city could have followed the lead of other cities who have created innovations zones, or “I Zones” and offered other economic benefits and incentives to encourage the results that city leaders seem to be seeking. I Zones are used to provide real benefits to businesses to grow and therefore, a community reaps real economic development. For example, a city will create an I Zone for a specific purpose and offer tax increment refunds to encourage businesses to locate within the I Zone. As projects are built within the I Zone and businesses open, jobs are created, tax bases increase, ancillary service businesses arrive and new housing is built or existing housing is leased.

Gainesville, Florida has successfully established the University of Florida Innovation Square, a 40 acre research and business innovation zone. This I Zone is self-described as a “community that brings research and business together to inspire people to think bigger.” Research, business and residential space is located on site and over 15 companies have moved to Innovation Square.

Chicago has created Broadband Innovation Zones. Located in commercial and industrial corridors, these I Zones are created for private provision of gigabit broadband speed for business, universities, schools, hospitals, research institutions and other community organizations. The purpose of the Broadband I Zones is to foster innovation, job creation and economic growth through ultra-high speed internet services at below market rates.

If Arcata truly wants to promote marijuana and related products in order to achieve economic growth, lower rents and increased tourism opportunities for its city, it can use the innovation zone designation for more than a land use classification. It could offer tax credits and other incentives to encourage the medical marijuana industry to locate in Arcata and create, research and develop different uses for medical marijuana and other products. The city could put businesses and researchers together to collaborate cost efficient processes for growth, harvesting and distribution. And, a residential component could be added so that the “work, live, play” feature would be available in the I Zone to draw leading experts in the marijuana field to Arcata, making Arcata the cannabis capital of the United States.