Paso Robles moves closer to allowing recreational cannabis dispensaries 

With the potential to bring in almost $1 million in revenue from recreational cannabis storefronts, Paso Robles is planning to host community meetings in August and September to get input on potential regulations that could allow commercial dispensaries to operate in the city.

Paso Mayor Steve Martin said he's heard from several residents who are interested in having access to recreational cannabis in the city, as well as people who want to bring retail sales to the community.

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• File Photo By Jayson Mellom
• RETAIL GAP Paso Robles contemplates filling the retail sales gap for recreational cannabis as it moves forward to create a potential ordinance.

"There seems to be an interest of these folks to be an integrated part of the community, not just another business," Martin said during the July 19 City Council meeting, adding that there are more ways the city can benefit from the industry than by simply bringing in tax revenue.

In November of 2020, Paso voters passed a cannabis business tax ordinance that includes a 10 percent tax on gross receipts of retail sales. However, Paso currently doesn't allow retail cannabis sales. The city limits the industry to two non-storefront medical marijuana dispensaries that can make deliveries (not considered retail sales).

Paso has one permitted non-storefront medical marijuana business operating in the city, Dubs Green Garden Collective, and one going through the permitting process, DRES/Kinfolk Holistic. And although all other commercial cannabis businesses are prohibited within the city, "delivery services based outside the city are legally able to deliver within the city, once obtaining and holding a state license and a Paso Robles business license," according to a staff report.

Dubs co-owner Grace Hall said that her company is losing out because they can only deliver medical marijuana within city limits, while other companies come in from out of town to deliver recreational cannabis. She said that anyone with a state license to sell adult use marijuana can legally operate anywhere in California.

"We're not being allowed to compete or thrive being that we're only allowed to sell medical. And recreational has been here for a long time and is sold legally every day," Hall told the City Council.

New Times couldn't confirm this, as the city didn't return a request for comment prior to press time. But Gina Whitaker, who spoke during public comment on July 19, said that seven commercial cannabis businesses offer delivery service to residents in Paso Robles, which is revenue that the city is missing out on.

Earlier this year, in February and April, the City Council approved developing a cannabis governance framework as part of its goals for the next two fiscal years. On July 19, the council voted 4-1 to move forward with that process and hold public meetings over the next two months followed by an October meeting to bring that information back to the council. City Manager Ty Lewis told the council that if it decides to allow retail sales of recreational cannabis, he hopes to start taking dispensary applications in January 2023 at the latest.

Based on work the city has done with its cannabis consultant, HdL Companies, Lewis said there's likely to be enough demand in the city to accommodate between two and four dispensaries.

Ajay Kolluri with HdL said that the state has issued more than 8,000 cannabis cultivation licenses, but only 849 retail cannabis licenses, indicating a large gap between the amount of cannabis grown in the state and the number of retailers that can sell it.

"There's really a bottleneck at the retail end," Kolluri told the council.

The closest dispensaries to the north are in Greenfield and King City, with concentrations along the coast to the south in Morro Bay, Grover Beach, and San Luis Obispo. He said that SLO County has an estimated shortage of nine cannabis retailers countywide.

"Less than 10 percent of [legal cannabis] businesses are retailers, so as a result, there is a lot of cannabis products being produced in the state but there are very few locations where it can be legally sold, so one of the side effects of this is that many consumers still purchase cannabis from the elicit market," Kolluri said. Δ