The slow pace of opening retail cannabis stores in Fresno, Calif. has left the 2023 budget short by more than $3 million, prompting city leaders to expedite the process to get businesses up and running. is being considered for change.
California voters passed Prop. 64 in 2016, legalizing cannabis for adult use with over 57% of the vote. Two years later, Fresno voters approved an ordinance to tax the retail sale of recreational marijuana, setting the stage for the opening of adult-use cannabis stores in the city.
In 2019, the Fresno City Council amended the City Ordinance to regulate recreational cannabis, and in 2021, the city will begin awarding the first of 19 preliminary cannabis retail licenses issued to date. rice field. But more than a year later, he’s only opened two recreational marijuana retailers in Fresno, and the pace is wreaking havoc on the city’s budget projections.
The city’s budget, approved in 2023, projected that cannabis taxes and fees would generate $5.37 million in revenue into the city’s coffers. But with only two dispensaries open so far, the city is now projecting cannabis tax revenue of $2,113,100 and a deficit of more than $3 million. insanity,” he said.
“We continue to overestimate cannabis every year.” esparza said.
Only two clinics have ever opened in Fresno
Dispensaries opening in Fresno, Embark and Artist Tree began serving recreational marijuana customers on the same day in July 2022. The remaining 17 companies that were granted preliminary licenses have submitted applications for Conditional Use Permits (CUPs) that require approval. Before a building permit has been issued and construction or renovation of the site has commenced. So far, 13 of the 17 pending CPU applications have been approved, and he could have a new clinic opening in May this year.
Sontaya Rose, director of communications for the city of Fresno, noted that the timeline for building and opening pharmacies is controlled by business owners, not the city.
“So I can’t say for sure,” Rose said in an email. Fresno Bee.
“Overall, the site is taking longer to open than originally anticipated.”
City leaders and business owners in the cannabis industry cite several reasons for the slow pace of dispensary openings. According to the city, some of the upcoming clinics will be located in older buildings that need major renovations before they can open and begin serving customers. Others have had to make accommodations for their landlords, including waiting for current tenants to vacate the building so they can begin renovations on the site.
Embarq CEO Lauren Carpenter, who received preliminary approval for two cannabis dispensaries in Fresno, said her company experienced delays at both locations. The company is “working quickly to open her second location later this year,” Carpenter said.
“Various factors influenced the timing” for the first and second locations, she added.
“Fortunately, we can serve Fresnan in the first place while training the team to be leaders in the second,” says Carpenter.
Lauren Fontein, founder of The Artist Tree, said the state of California’s regulated cannabis industry is also affecting new business start-ups. , squeezing margins across the supply chain. High taxes and licensing fees for the cannabis business also hit hard from the bottom. Many businesses have struggled and some have had to lay off workers to survive.
“The willingness to invest in the cannabis industry is much lower,” Fontaine said. “It’s not this kind of money-making business that people were thinking of.”
Fresno civic leaders are looking to several jurisdictions for possible solutions, with several options to encourage the opening of additional adult-use cannabis retailers in the city. I am considering. In West Hollywood, the city council amended the cannabis ordinance to allow more licenses to be issued. Meanwhile, Riverside has conducted an additional round of licensing to add to the city’s roster of cannabis dispensaries. Fontein said Fresno is considering adding a deadline to the ordinance to encourage the rapid opening of new clinics.
“At this point, the city needs to get it working,” she said.
But the city has few options. Businesses have been given his one-year deadline to submit their CUP applications, but city ordinances do not provide a timeline for pharmacies to begin operations.
In an email, Rose wrote: Fresno Bee The mayor’s office will work with staff from the city’s attorney’s office to “determine options for setting additional deadlines for applicants to move forward toward opening”. I was unable to provide a timeline for getting it up and running.
Until that happens, Fresno’s cannabis tax revenues will continue to decline, potentially impacting the city’s ability to serve.