Turlock Planning Commission Keeps Cannabis Dispensaries in Business Amid Money Laundering Probe

The city of Turlock is doubling down on its cannabis industry despite red flags tied to money laundering investigations. The Planning Commission voted to recommend extending development agreements for all four licensed dispensaries—FF Farms, Firehouse, Natural Healing Center, and Perfect Union—and one cultivator, Plan4Dream, through June 2029. This move aims to end the pilot program launched in 2019 and transition cannabis businesses into regular city operations.

Under current agreements, dispensaries pay a public benefit fee of 5.25 percent of gross receipts or a minimum lump sum starting at $25,000, increasing annually. The city is considering replacing this with a cannabis tax subject to voter approval. Meanwhile, it proposes adjusting fees to a percentage-only system capped at 5.25 percent through May 2027, with potential increases up to 9 percent later.

Since opening, these dispensaries have generated $8 million in public benefit funds—Firehouse alone contributing over half that amount. The pilot program itself was contentious from the start, passing the city council on a narrow 3-2 vote in 2019.

But the extension isn’t without controversy. Plan4Dream’s contractor, Cold Storage Manufacturing, is under investigation by the Sacramento County District Attorney’s Office for alleged illegal drug trafficking and money laundering. The city was notified earlier this year, and attorney Zach Drivon, representing the property owner Quingyu Huang, stressed that the individuals under investigation are not investors in the project. Drivon explained that loans secured by the operator involved parties unknowingly tied to the probe, and the city has received contingency plans should Huang become implicated.

The city is also tightening regulations, requiring dispensaries to provide remote real-time video access to authorities and mandating background checks for ownership changes every two years or on reasonable cause. Any felony convictions related to cannabis business operations could lead to termination of development agreements, forcing owners to transfer their interests within 180 days.

Turlock’s move to extend these agreements amid ongoing investigations highlights the tension between fostering a lucrative cannabis market and maintaining rigorous oversight to prevent corruption and criminal infiltration. As the city prepares to regularize cannabis businesses, residents and watchdogs alike should remain vigilant about who profits and how enforcement is handled.