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Moving Forward



San Diego is home to sunny beaches, universities and the world-famous Comic-Con International, but now the city will be adding a robust system of cannabis cultivation, manufacturing, distribution and testing. Years ago, the San Diego City Council approved a limited number of cannabis storefronts, of which there are now about 15 open for business and a few more in progress. Last month, the council convened again to discuss supply-chain operations, of which they voted 6-3 to approve up to 40 businesses. That means there will be exactly 40 licenses up for grabs from now until January, and applicants will be expected to meet all the city’s requirements before opening doors.

Does this sound like your kind of challenge? Here’s what responsible cannabis entrepreneurs need to know before digging into paperwork for the city of San Diego.

“Before going for a state cannabis license, prospective cannabis entrepreneurs in San Diego will have to complete paperwork and wait in line for a Conditional Use Permit (CUP).”

Location is Key

If you really want to be a San Diego-based cannabis company, your main focus should be finding a suitable property within the city limits, due to a de facto ban on cannabis activities in the unincorporated county. Let me repeat—aspiring cannabis entrepreneurs in San Diego must start looking for a properly-zoned building immediately, as they will go fast! Locations must be 1,000 feet or more from schools, churches and parks, and also more than 100 feet from residential zones.

This city’s diverse neighborhoods won’t all be equally accommodating of a cannabis business, so it’s important to consider things like cannabis odor, traffic coming in and out of your facility, trash and graffiti cleanup, and other details that will directly affect your business’s relationship with the community. These will soon be parts of the official permitting process.

The Process is Strict

Before going for a state cannabis license, prospective cannabis entrepreneurs in San Diego will have to complete paperwork and wait in line for a Conditional Use Permit (CUP). For the city to grant you this permit, you will be expected to provide a few things about your business, especially verification of the site you plan to operate in.

The city has so far set just a few requirements for cannabis operators. First and foremost, the property must be in the correct zone and far enough away from sensitive land uses, like youth areas. All CUP applicants must also submit a detailed business plan, and will likely have to fork over high fees in order to push their application forward. This process may seem strict, but it will create a healthy supply-chain within the city, while allowing opportunity for small operations to seek a path to legalization.

Retail is Tight

When thinking about your future cannabis business, remember that the legal and licensed cannabis supply-chain in San Diego will start out slightly smaller than it is today. Once the city works to eradicate unlicensed stores, only about 17 will remain in operation. That will certainly limit growers’ and manufacturers’ sales and profit margins, so keep a sales strategy in mind.

The addition of a standalone delivery service license may expand retail options. Soon, once the San Diego Cannabis Delivery Alliance has its day in front of the city council’s Public Safety and Neighborhood Services Committee sometime in the next few months, we will know for sure whether or not delivery will be legal.

Overall, the best advice for getting a coveted license is to hire a skilled attorney. Lawyers who specialize in the cannabis industry can keep you abreast of all the requirements and ensure that your business is in compliance at the local and state level.

Converging into a regulated system will not be easy, and there will undoubtedly be growing pains, but hopefully the benefits will outweigh the costs as hundreds of California businesses get to stay open and maximize their legal profits.

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