California cannabis stakeholders have reason for optimism in 2021. New federal leadership is widely expected to implement meaningful cannabis legal reforms, and in 2020 many California municipalities passed cannabis-friendly ballot initiatives. About two-thirds of California jurisdictions prohibit commercial cannabis activity, so any new licensing opportunities are cause for celebration. 
 
When, however, will licence applications to become available in those jurisdictions, as well as other jurisdictions expanding access to cannabis business licenses? As with all things in the industry, the devil is in the details. We took a closer look at some of the California cities and counties inching closer to new cannabis license offerings so you know what locations to put on your radar.
 
Locations of interest are divided between Southern California, Central California, and Northern California.
 
Clark Howell LLP is monitoring changing California cannabis licensing opportunities. Contact our team to further explore evolving cannabis rules and regulations in the jurisdictions listed below.

Artesia  (Los Angeles County)

Adopted cannabis tax rules, but local licensing unlikely in the short term.

Adopted cannabis tax rules, but local licensing unlikely in the short term.

Artesia approved in November 2020 Measure Q, which authorizes a tax of $20 per square foot for cannabis cultivation, and a new 15% gross-receipts tax for all other “cannabis and hemp” businesses.
As of January 11, 2021, the City Council has not yet moved forward to adopt a cannabis licensing regime

Banning  (Riverside County)

Now accepting cannabis distribution
license applications.
 
Banning, a town near Palm Springs, approved Measure L, which allows distribution licensing, and imposes a distribution tax (10% of gross receipts). Banning already allows cultivators, manufacturing, and testing labs. 
 
The Banning City Council had already adopted an ordinance to allow cannabis distribution facilities, but the ordinance would only become effective if a cannabis distribution tax is approved by the voters. After Measure L passed, the new ordinance became effective on its certification date, December 3, 2020. Distribution is a conditionally permitted use subject to various restrictions and regulations

Calabasas (Los Angeles County)

Adopted cannabis tax rules, but local licensing unlikely in the short term.
 
Voters in Calabasas in November 2020 approved Measure C, a general cannabis business tax of up to 10% on gross receipts. All commercial cannabis activity is still prohibited. Measure C is generally not regarded as a herald for future local licensing.
 
We note that per the City Attorney’s analysis, the tax applies to any cannabis deliveries into Calabasas

Costa Mesa  (Orange County)

Moving toward licensing retail (storefront
and delivery).
 
Costa Mesa voters approved Measure Q, which allows the City to develop rules for cannabis storefront dispensaries and non-storefront delivery services, as well as 4%-7% gross receipts tax for retailers. Any new rules must be adopted by a two-thirds vote of the entire membership of the City Council, and meet certain minimum standards.
 
Costa Mesa already permits manufacturing, testing and distributio

Encinitas  (San Diego County)

Moving toward licensing cannabis cultivation, manufacturing, distribution, and retail.
 
Voters in Encinitas, near San Diego, approved Measure H, which establishes an ordinance for commercial cannabis cultivation, manufacturing, and distribution—as well as a limited number (four) of retail locations. Hemp cultivation is also now authorized in certain zones.
 
A local licensing policy has not yet materialized.

Fullerton  (Orange County)

Ordinance on hold, but moving toward broad cannabis licensing.
 
The City of Fullerton, south of LA, is in the process of overhauling its cannabis ordinance to implement MAUCRSA. In December 2020, however, the City voted to stay the adoption of its cannabis ordinance—and recently the City Council voted to continue any action on commercial cannabis until March 2021. In the meanwhile, the City Council will work to amend the ordinance to address certain local objections.
 
The draft ordinance under review would allow cultivation, processing, manufacturing, testing, retail (storefront and delivery), as well as distribution—but license caps would apply (excepting testing).

Hawthorne  (Los Angeles County)

Adopted cannabis tax rules, but local licensing unlikely in the short term.
Voter-approved Measure W allows the City Council to adopt an ordinance that permits up to four (4) delivery-only cannabis retail businesses, and authorizes a cannabis business tax of up to 6% of gross receipts.
 
Work on the implementing ordinance is reportedly underway. The City already permits distribution and testing labs.

Costa Mesa  (Orange County)

Moving toward licensing retail (storefront
and delivery).
 
Costa Mesa voters approved Measure Q, which allows the City to develop rules for cannabis storefront dispensaries and non-storefront delivery services, as well as 4%-7% gross receipts tax for retailers. Any new rules must be adopted by a two-thirds vote of the entire membership of the City Council, and meet certain minimum standards.
 
Costa Mesa already permits manufacturing, testing and distributio

La Habra  (Orange County)

Moving toward licensing four (4) delivery-only retail licenses.

Voter-approved Measure W allows the City Council to adopt an ordinance that permits up to four (4) delivery-only cannabis retail businesses, and authorizes a cannabis business tax of up to 6% of gross receipts.
 
Work on the implementing ordinance is reportedly underway. The City already permits distribution and testing labs.

Lemon Grove  (San Diego County)

Cannabis tax ballot initiative adopted, but expanded local licensing ordinance not yet available.

Voters approved Measure J, which requires the City to repeal the current cannabis tax and replace it with a new cannabis or hemp business tax at annual rates not to exceed 8% of gross receipts for retail cannabis businesses, and 4% for all other cannabis businesses. The City ended up adopting a 5% gross retail sales tax rate.
 
Currently in Lemon Grove medicinal cannabis retailers are conditionally permitted. All other medicinal cannabis businesses and recreational cannabis businesses are prohibited.

Los Angeles (Los Angeles County)

Still accepting applications for cannabis delivery, distribution, non-volatile manufacturing, and testing lab license types.

The City of Los Angeles is currently accepting, until further notice, applications for delivery, distribution, non-volatile manufacturing, and testing lab license types. Delivery is currently only available to previously verified Social Equity Applicants. 
 
If LA is part of your licensing plan, we encourage you to reach out to us before you apply. The City’s local cannabis licensing regime is complex.

Oceanside  (San Diego County)

The cannabis application window closed at the end of 2020; the 2021 application intake window is not yet open.

Approved Measure M authorizes a general cannabis business tax of up to 6% of gross receipts for retailers, manufacturers and distributors and up to 3.5% for cultivators.
 
Since 2018, Oceanside has allowed medical commercial cannabis activity, but in 2020 adopted an ordinance to allow adult-use cannabis cultivation in certain districts. All other cannabis activity is still restricted to medical only. It appears the City is not currently accepting applications for any commercial cannabis activity, but at a future date will accept applications in 2021.

Ojai  (Ventura County)

Initiative passed, but new licensing opportunities unlikely in the short term.

Ojai voters approved Measure G, an advisory measure for an immediate 3% tax on cannabis businesses, which the City may increase up to 10% of gross receipts. It appears only testing licenses are currently available.

Pomona  (Los Angeles County)

No new applications accepted.

Voters approved Measure PO which adopts and affirms the City’s existing four-phase, merit-based cannabis permitting ordinance, which allows up to eight (8) new cannabis businesses (but excluding outdoor cultivation).
 
It seems the City already accepted and scored eight license applications through a four-phase, merit-based licensing process.

Los Angeles (Los Angeles County)

Ballot measure approved, but no new licensing opportunities yet.

The City of Ventura voters approved Measure I, which requires the City to tax cannabis and hemp businesses at annual rates not to exceed $10.00 per square foot of canopy for cultivation, 8% of gross receipts for retail cannabis businesses, and 4% for all other cannabis businesses—should the city council legalize them at a future date.
 
The City currently prohibits commercial cannabis activity based within the jurisdiction. No other licensing opportunities are apparent. It is notable, however, that the City began allowing deliveries within the City by an outside retailer where the outside retailer has a permit from the City of Ventura.

Oceanside  (San Diego County)

Accepting applications for cultivation, processing, and distribution.

Measure O amends the Ventura County ordinance to allow the commercial cultivation, processing, distribution, and sale of cannabis in pre-existing structures within the unincorporated area of the County. Retail sales are not allowed.
 
The County is currently accepting applications. Aspiring Ventura County cultivators should note that cultivation would only be approved in an existing greenhouse, which the new ordinance defines as “a permanent structure, including glasshouses, conservatories, hothouses, or other similar structures for the covered propagation and growing of plants, constructed with a translucent roof and/or walls.” Other restrictions apply.

Madera  (Madera County)

Initiative passed, but licensing opportunities unlikely in the short term.

Measure R establishes a tax regime for commercial cannabis activity: $10 per square foot of canopy for cultivators, 6% of gross receipts for retailers, and 4% of gross receipts for all other business types). The initiative does not permit commercial cannabis activity itself, and Madera currently prohibits commercial cannabis activity

Porterville  (Tulare County)

Initiative passed, but licensing opportunities unlikely in the short term.

Measure R was approved, ushering in a cannabis business tax not exceeding $25 per square foot or 10% of gross receipts.
 
Porterville began licensing cannabis dispensaries last year, but no new licensing opportunities are apparent.

Tracy  (San Joaquin County)

Initiative passed, but new licensing opportunities unlikely in the short term.

Tracy voters approved Measure W, which establishes a general cannabis business tax including 6% of gross receipts for retailers, 4% for other business types, and $12 per square foot for cultivators.
 
The City’s period for accepting applications for cannabis business permits closed on October 15, 2020. No new licensing opportunities are immediately apparent.

Benicia  (Solano County)

Accepting applications for cultivation, processing, and distribution.

Measure R establishes a tax regime for commercial cannabis activity: $10 per square foot of canopy for cultivators, 6% of gross receipts for retailers, and 4% of gross receipts for all other business types). The initiative does not permit commercial cannabis activity itself, and Madera currently prohibits commercial cannabis activity

Chico  (Butte County)

Cannabis applications for distribution, manufacturing, non-storefront retail, and testing labs to be accepted in the future, but the exact timeframe is TBD.

Measure R was approved, ushering in a cannabis business tax not exceeding $25 per square foot or 10% of gross receipts.
 
Porterville began licensing cannabis dispensaries last year, but no new licensing opportunities are apparent.

Concord (Contra Costa County)

Accepting applications (on a first-come-first-served basis) for manufacturing, testing laboratories, and a supply-side-only microbusinesses.

Concord revamped its cannabis ordinance last year and began accepting applications, both on a competitive scoring and first-come-first-served basis depending on the type of commercial cannabis activity. The City is currently reviewing a first wave of applications, but it is still accepting applications on a first-come first-served basis for manufacturing, testing laboratories, and a supply-side-only microbusinesses

Crescent City  (Del Norte County)

Accepting applications for cultivation, processing, and distribution.

Crescent City in spring 2020 passed a new cannabis ordinance allowing for cannabis retail (storefront and delivery), indoor cultivation, distribution, non-volatile manufacturing, microbusinesses, and testing laboratories. The City continues to accept applications.

Fairfield  (Solano County)

Only testing lab applications are accepted at this time, and future licensing opportunities are unlikely in the near term.

Fairfield voters approved Measure C, which establishes a cannabis business tax of up to $10 per square foot of canopy for cultivators, 6% of gross receipts for retailers and 4% of gross receipts for all other license types.
 
Fairfield had already established a cannabis licensing regime incorporating a competitive scored application process. It is currently scoring retail and manufacturing permits. Due to license caps embedded in the ordinance, a new ordinance is needed for additional retail and manufacturing businesses, as well as other license types. Testing lab applications are the only cannabis license applications accepted at this time.

Grass Valley  (Nevada County)

Licensing opportunities are forthcoming; City finalizing cannabis license application materials.

After Grass Valley voters approved Measure N (established an 8% gross-receipts tax for retailers, a 6% gross-receipts tax for other businesses and a cultivation tax of up to $7 per square foot of canopy), the City Council approved in late November 2020 an ordinance that would allow cannabis businesses in certain zones.
 
Under the new ordinance, Grass Valley will allow a limited number of licenses for retail (storefront and delivery), testing labs, non-volatile manufacturing, processor, nursery, and distribution. 
 
The City is currently finalizing cannabis application materials. It is not clear whether the process will be first-come-first-served or competitive.

King City  (Monterey County)

Initiative adopted, but retail application window already closed.

In November 2020, King City voters passed Measure P, which imposes a new tax of up to 5% of gross receipts on the retail sale of cannabis and cannabis products, including industrial hemp and hemp products, and up to 2% of gross receipts on the distribution of cannabis and cannabis products generated from outside King City.
 
King City in early 2020 opened the door for cannabis retailers with a new ordinance, and the deadline for submitting a retail application has passed. 

Marina  (Monterey County)

Retail permits already issued, and future supply-side cannabis licenses are delayed for at least six months while staff develops a licensing policy.

Marina voters said yes to Measure Z, which requires adoption of the City’s revised ordinance and permit processes for commercial cannabis. The ordinance preserves the existing 5% gross receipts tax and the existing retail cap (three adult-use retailers, three medical retailers).
 
The City is not currently accepting cannabis business applications. The City recently adopted a six-month moratorium on accepting non-retail cannabis business applications, intended to give staff time to develop a new cannabis licensing policy.

Fairfield  (Solano County)

Accepting non-retail cannabis business applications, subject to new licensing regime adopted with Measure N.

With Measure N approved by voters, the City adopts a new cannabis licensing and regulation ordinance, including authorization of a new tax on cannabis businesses (6% of gross receipts for retail, 4% of gross receipts for other cannabis businesses, and $10 per square foot for cultivation). 
 
Marysville is currently accepting applications for non-retail commercial cannabis activity, subject to the new cannabis ordinance adopted by Measure N.

Rio Vista  (Solano County)

Accepting license applications.

Rio Vista adopted a new cannabis ordinance in May 2020 and has been awarding CUPs at a steady clip through the fall of 2020.
 
Outdoor cannabis cultivation is prohibited and only three (3) storefront retail locations are allowed, but there otherwise are no license caps.

San Bruno  (San Mateo County)

Initiative passed, but no cannabis licensing ordinance is yet available.

Measure S was adopted by San Bruno voters, imposing on cannabis companies a 10% gross receipts tax.
 
The city currently prohibits all cannabis businesses. As of January 11, 2021, the City Council has not yet moved forward to adopt a cannabis licensing regime–but we note that various reports indicate that the City Council plans to move forward with a cannabis ordinance.

Sonoma  (Sonoma County)

Initiative passed, but no cannabis licensing ordinance is yet available.

Voter-approved Measure X establishes a general cannabis business tax of up to 4% for retailers, manufacturers and indoor growers; 3% for distributors; 2.5% for outdoor cultivators; and 2% for testing labs.
 
It is notable that Measure X passed with full City Council support. The City’s current licensing process has rolled out slowly, involving strict license caps: only (1) storefront retailer, one (1) non-storefront retailer, one (1) testing lab, and (1) manufacturer (Type N or P) will be allowed. 
In December 2020, the City took one step closer to permitting its chosen storefront retailer in December, but it is not clear when the City will move forward to issue the other authorized license types, or explore a new ordinance.

Sonoma  (Sonoma County)

Initiative passed, but no cannabis licensing ordinance is yet available.

Voter-approved Measure X establishes a general cannabis business tax of up to 4% for retailers, manufacturers and indoor growers; 3% for distributors; 2.5% for outdoor cultivators; and 2% for testing labs.
 
It is notable that Measure X passed with full City Council support. The City’s current licensing process has rolled out slowly, involving strict license caps: only (1) storefront retailer, one (1) non-storefront retailer, one (1) testing lab, and (1) manufacturer (Type N or P) will be allowed. 
In December 2020, the City took one step closer to permitting its chosen storefront retailer in December, but it is not clear when the City will move forward to issue the other authorized license types, or explore a new ordinance.

Sonoma  (Sonoma County)

The cannabis cultivation ordinance is currently undergoing revision.

Work is underway on a draft cannabis cultivation ordinance and environmental analysis under CEQA.
 
The work began in October 2020 following a staff recommendation to pursue a General Plan amendment that will manage cannabis cultivation similarly to other crops’ agricultural uses. It seems the draft ordinance and environmental analysis will be publically available before the end of the month.

Stockton  (San Joaquin County)

Accepting new applications for indoor cultivation, microbusiness, retail storefront, and volatile manufacturing through February 25, 2021.

The City of Stockton is accepting new cannabis license applications for indoor cultivation, microbusiness, retail storefront, or volatile manufacturing through February 25, 2021 for its annual application lottery for these license types. Every year, eight (8) eligible applications are selected for licensure by lottery, with four (4) going to Equity applicants.
 
There is no limit to the number of permits for non-storefront retail), non-volatile manufacturing, distribution, and testing laboratories. Applicants may apply for these types of commercial cannabis activity at any time.

Trinity County  (an “Emerald Triangle” County)

New tax scheme adopted and ordinance amendments underway, but no new licensing opportunities are yet apparent.

Citizen-led Measure G passed, establishing a cannabis cultivation tax consisting of certain “full rate” values ($15.44/lb for flower, $4.59/lb for leaves, $2.16/lb for fresh plants) which are used to calculate the actual tax weight based on biomass weight. Additionally, the initiative imposes a 2.5% gross sales tax for cannabis retailers. 
No new licensing opportunities are yet apparent. The County’s website provides that it is not currently accepting new cannabis cultivation license applications.
 
Notably, however, the County is in the process of finalizing a programmatic environmental impact report and amending its cannabis ordinance.

Vacaville  (Solano County)

Initiative passed, but no cannabis licensing ordinance is yet available.

Vacaville voters approved Measure V to establish a tax regime for cannabis and hemp operators. No new licensing ordinance is yet available

Weed  (Siskiyou County)

The cannabis cultivation ordinance is currently undergoing revision.

Measure B adopted City Ordinance 453-2019, a cannabis licensing ordinance that expands the City’s current cannabis licensing program.

If you have any questions about how the above or would like to discuss how it could impact your business, please contact your attorney directly or call our main line at 877-257-2442.

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