The Board of Supervisors put the kibosh on accepting any more new cannabis dispensary applications Tuesday, though existing retail applications will still be processed. The moratorium expires in 2028.
How many marijuana dispensaries does San Francisco have? The California Department of Cannabis Control database shows nearly 80 commercial retail cannabis permits are active in the city at the moment. SFGate did some digging on the prevalence of SF dispensaries to find that "San Francisco has nearly 9 pot shops for every 100,000 people, while San Diego only has 2.6 and Los Angeles only has 1.8. (Though they add that “the city lags behind other West Coast cannabis cities like Portland, which has more than 34 pot shops for every 100,000 people.") And at Tuesday’s SF Board of Supervisors meeting, it was noted that there are still upwards of 100 more dispensary applications still in the SF Office of Cannabis permit pipeline.
The reason this came up at Tuesday’s board meeting was because the board was considering declaring a moratorium on new pot dispensaries in San Francisco — specifically on accepting new applications for them. And the board approved that dispensary moratorium by a unanimous 10-0 vote. (Supervisor Hillary Ronen was absent.) Though they gave the moratorium a “sunset date” of 2028, or rather, the moratorium expires on December 31, 2027.
“San Francisco has more cannabis businesses per 100,000 residents than any other locale in the state of California,” the measure’s author, Supervisor Ahsha Safai said Tuesday. “If there’s a continued illicit market, and a continued saturation, many of these businesses that we’ve put effort and energy into won't survive.”
Safai claimed the industry was being hampered because “60% of the sales of cannabis sales are still from the illicit market.” It’s not clear where he got that number, though it may be a reference to a 2022 Leafly report that found “the illegal market still supplies 55% of cannabis demand.” But that’s statewide data, and the report concludes that the illegal market is thriving thanks to California cities that don’t allow dispensaries, not because of there being too many legal dispensaries.
How do cannabis retailers feel about the SF dispensary moratorium? That seems to depend on whether or not they already have their permits. Those that do are less inclined to want more competition.
“There is a finite amount of legal cannabis market in San Francisco. If it’s being divided up into 70 retailers and soon it will be 140 retailers, many of those retailers are going to fail,” San Francisco Cannabis Retailers Alliance president and Berner’s on Haight co-owner Johnny Delaplane told SFGate.
But some applicants who are currently in the pipeline disagree. “It legislates limited access to opportunity, when what the equity program is supposed to do is open up access for marginal folks,” retail applicant Nina Parks, who also runs the event company Gifty of Doja, told SFGate.
The 2028 sunset of the moratorium was a last-minute addition to Safai’s moratorium, a compromise that appeared to win the unanimous board approval. And it was noted that the SF Office of Cannabis still has those 100 more applications in the pipeline, which will not be affected by this moratorium.
Supervisor Dean Preston, who was initially skeptical of the measure, said Tuesday that “As we add more applicants in, we’re actually slowing down the vetting and approving the equity applicants that are already in the queue.”
Before the vote, Safai declared “This industry is not a free-market industry. This industry cannot bank. This industry cannot get access to capital. This industry is cash-heavy. This industry is regulated in terms of its location, its time of opening. So this is a heavily regulated industry.”
So… the answer is to regulate it even more? Ever since recreational marijuana sales became legal in SF in 2018, the only new dispensary permits awarded have been to what we call equity applicants, described as “those hardest hit by the War on Drugs.” This moratorium may limit that opportunity, and reward established operators and the multi-state chain dispensaries that are already here, as San Francisco continues to tinker with the grand legal marijuana experiment.
Image: Budding via Unsplash