On Nov. 8, 2016, a new California law went into effect legalizing the recreational use of cannabis by people 21 and older and creating a state regulatory and licensing system for cannabis businesses.
Under the state law, cities are allowed to create their own regulations and licensing process, which the City of San Luis Obispo did on May 22, 2018.
City staff worked with the community to create a thoughtful, transparent and fair process for granting permits to cannabis businesses. This approach was designed to protect the community’s character and quality of life while ensuring cannabis businesses operating here are well run and sustainable, including:
- A commitment to local hiring and community support.
- Equity ownership and competitive employee compensation.
- A solid financial plan and the resources needed to support a successful business.
- A commitment to sustainable business and environmental practices.
Steps in the Process:
Applications submitted are reviewed and scored according to the adopted Evaluation Criteria. Top scorers meeting a determined threshold will be issued Contingent Operator Permits and can then begin to work with the City's Community Development Department on their use and building permits. Following the successful completion of an extensive background investigation of all principals and partners which includes LiveScan fingerprint screening, applicants will be issued a final Cannabis Business Operator Permit.
Nov. 8, 2016: New state law allowing recreational cannabis use
May 22, 2018 City passes the Cannabis Ordinance allowing commercial cannabis businesses to operate in the City
Nov. 6, 2018: City of San Luis Obispo voters adopt the Cannabis Business Tax Measure
Jan. 1-29, 2019: Initial Commercial Cannabis Business Operator Permit Application process opened
March 28, 2019: Five Contingent Operator Permits granted
April-Present: Background investigation process underway for applicants that received Contingent Operator Permits
Sept. 5, 2019: First two Operator Permits granted
Three additional permits are expected to be granted in Fall 2019 as the City completes the background investigation process for the remaining applicants that received Contingent Operator Permits.
A maximum of three retail storefront businesses will be allowed. The City does not have a limit on the number of delivery, cultivation, manufacturing and other small businesses that can operate in San Luis Obispo.
The next application period will open in January, 2020.
- Gross receipts, or excise taxes, are assessed at every stage of cannabis production within the City including testing, retail sales, distribution and manufacturing. Cultivation taxes are based on the size of the canopy or license issued by the State. The current gross receipts tax is 6%.
Mobile Delivery Businesses:
For cannabis delivery businesses operating and delivering products within the City of San Luis Obispo, a Business License and Cannabis Tax Certificate is required.
For more information, contact Charlene Rosales, Economic Development Manager, at (805) 781-7164.