Attachment 1 - Consultant StudyDelivering Revenue, Insight
and Efficiency to Local Government
Commercial Cannabis in Los Gatos:
Potential Revenues, Regulatory Costs, and
Comparative Data
Prepared for
the
Town of Los Gatos
June 16, 2022
ATTACHMENT 1
2
Introduction
The Town of Los Gatos currently prohibits the establishment or operations of any commercial cannabis
businesses within town limits. In early 2022, the Town Council engaged the services of HdL Companies
(HdL) to prepare a fiscal impact analysis for allowing commercial cannabis businesses to operate within
Los Gatos. The analysis is intended to inform the Council’s decision‐making process regarding whether to
allow commercial cannabis activity locally, the costs associated with regulating cannabis businesses, and
potential revenues that could be generated from adopting a cannabis tax measure.
The fiscal impact analysis is broken down into three sections:
Revenue Analysis
Expenditure Analysis
Comparison to Other Jurisdictions
Additional information regarding comparable jurisdictions can be found in Attachment A to this report.
Revenue Analysis
HdL’s revenue analysis is focused on the potential impacts of allowing commercial cannabis retailers in
the Town of Los Gatos. Consideration for other cannabis license types – collectively referred to as
“wholesalers,” which includes cultivators, manufacturers, distributors, and testing laboratories – is not
included in this report. Should the Town of Los Gatos wish to explore permitting wholesale operators
locally, HdL may update the revenue projections based upon the type and number of businesses desired.
Pursuant to State law, commercial cannabis retailers are authorized to sell cannabis goods directly to
consumers, either through delivery or on‐site purchases. In contrast with wholesalers, who supply
cannabis products to the statewide market, retailers are the only cannabis business type that specifically
serves the local community. As a result, the ideal number of retailers for a community will be proportional
to the local population of the host city and the surrounding service area.
The Town of Los Gatos is situated on the west side of Santa Clara County at the base of the Santa Cruz
Mountains. The City has a population of 33,529 peoplei and sits at the southwest edge of Silicon Valley.
Adjacent and nearby cities and communities include the cities of San Jose, Campbell, Monte Sereno and
Saratoga and the unincorporated areas of Cambrian Park and Lexington Hills.
The City of San Jose is the only jurisdiction in all of Santa Clara County that currently allows licensed
commercial cannabis businesses of any kind. The Department of Cannabis Control (DCC) currently shows
16 licensed cannabis retailers located within the City, of which 8 are storefront retailers and 8 are
microbusinesses which may conduct a variety of cannabis business activities, including retail. All San Jose
storefront cannabis retailers are allowed to also conduct sales via delivery. The locations of these cannabis
retailers are shown in Figure 1.
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Though the region is already reasonably served by licensed storefront cannabis retailers located in San
Jose, there are also a number of cannabis delivery services operating in the area. Figure 2 shows a map of
cannabis delivery providers, advertised on the cannabis platform Weedmaps as of May 2022, available
for at‐home deliveries in Santa Clara County. Providers are displayed by the areas they deliver, rather
than their ‘home’ location, so a single delivery service may be represented multiple times on the map.
To determine the potential gross receipts of cannabis retailers located in the Town of Los Gatos we must
first identify the approximate area that these retailers would serve. As with any other type of retailer,
Figure 1:
Figure 2:
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cannabis retailers are not limited to serving the residents of their host communities. Customers may drive
from other nearby cities to reach their nearest store. In addition, cannabis retailers may deliver products
within a wider service area.
Retail studies show that 93% of consumers are willing to travel 15 to 20 minutes to make most routine
purchasesii, meaning that storefront retailers in Los Gatos would be able to capture cannabis tax (and
sales tax) from some portion of the surrounding area. The cities of Monte Sereno, Campbell, and Saratoga
all fall within this distance, as do the unincorporated areas of Cambrian Park and Lexington Hills.
In addition, we note that all of the cannabis retailers in the City of San Jose are located East of the Highway
87 corridor, other than one near the airport. This suggests that a broad portion of cannabis consumers in
San Jose would likely find it more convenient to travel to Los Gatos to make their purchases. This includes
portions of the neighborhoods of Cambrian, Almaden, Blossom Valley, Willow Glen and West San Jose.
For purposes of our analysis, we conservatively estimate that approximately 10% of the population of San
Jose falls within the Los Gatos service area.
Because there are no other options for cannabis consumers in the South Bay Area, we anticipate that
retailers in Los Gatos may capture some portion of cannabis sales from cities such as Cupertino and parts
of Sunnyvale and Santa Clara. The proximity of these other cities is shown in Figure 3, below.
Figure 3:
In Figure 4, below, we have added up the total population of the projected service area for cannabis
retailers in the Town of Los Gatos. We estimate the total population of this area at a little under 1.2 million
Cities and Communities in the Los Gatos Service Area
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people. However, when we account for only serving a portion of the population of San Jose and Cupertino,
the service area population comes down to around 235,000. Dividing that figure by the number of existing
retailers serving the area yields a retail density of 14,666 people per retailer.
Figure 4:
Data from the California Department of Tax and Fee Administration (CDTFA) gives the total cannabis retail
sales for each county as well as the sales per capita, derived by dividing the total sales by the population.
From this, we are able to see the relationship between the retail density (population per retailer) and the
sales per capita. CDTFA reports $220 million in retail cannabis sales in Santa Clara County (1.9M
population) over the last 12 months, which equals sales per capita of $114 per personiii. Applying this to
our service area population would yield $27 million dollars in sales.
In Figure 5, on the next page, we have provided a general scenario to estimate a reasonable range of
cannabis tax revenues that the Town of Los Gatos may be able to generate from a projected 2 licensed
cannabis retailers. Starting with our service area population of 234,648 people, we then apply a range of
assumptions for the percentage of the population that uses cannabis on a regular basis. These estimates
vary from around 10%iv to 13%v, up to as high as 22%vi. This percentage is influenced by social acceptance
of cannabis within the local community. Applying these estimates to our estimated consumer base yields
between roughly 23,000 and 52,000 potential cannabis consumers.
Cannabis retailers typically average around 120 customers per dayvii. Data shows that a typical cannabis
consumer makes a purchase of $73 with an average frequency of twice a monthviii. Applying this to our
range of cannabis consumers yields monthly sales of between $3.4 million and $7.5 million, which works
out to annual gross receipts of between $41 million and $90 million.
However, the existing retailers in the City of San Jose will likely continue to capture some portion of sales,
as will licensed and unlicensed cannabis delivery services operating throughout the area. To account for
this, we have assumed an additional 30% leakage for each of these markets, which brings our estimate of
total gross receipts down to a range of $12 million to $27 million.
Applying our recommended retail cannabis tax rates to this range of total gross receipts yields a range of
revenue projections. Applying HdL’s recommended “low” tax rate of 4.0% would yield between $490,000
and $1.1 million in annual cannabis tax revenue for the Town of Los Gatos, with a best estimate of
City/Community Population Est. % in
Service Area
Adjusted
Population
Retailers Population
Per Retailer
Cambrian Park 3,719 100% 3,719 0 N/A
Campbell 43,959 100% 43,959 0 N/A
Cupertino 60,381 25% 15,095 0 N/A
Lexington Hills 2,492 100% 2,492 0 N/A
Los Gatos 33,529 100% 33,529 0 N/A
Monte Sereno 3,479 100% 3,479 0 N/A
San Jose 1,013,240 10% 101,324 16 6,333
Saratoga 31,051 100% 31,051 0 N/A
Service Area Population 1,191,850 234,648 16 14,666
Service Area Population
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$640,000. Applying a rate of 5.0% would yield between $617,000 and $1.4 million, with a best estimate
of $800,000 in annual revenue. Applying HdL’s recommended “maximum” rate of 6.0% would yield
between $860,000 and $1.9 million, with a best estimate of $1.1 million in annual cannabis tax revenue
for the Town.
In addition, retail cannabis sales would also generate between $123,000 and $271,000 in Bradley‐Burns
sales tax revenue for the Town. These estimates are all shown in Figure 5, below.
Figure 5:
The Costs of Permitting, Regulating and Enforcing Cannabis Businesses
HdL’s expenditure analysis is intended to provide a general overview of the types of costs that the Town
of Los Gatos may incur through the permitting, regulating and enforcing of cannabis businesses. Costs
include, but are not limited to, the following:
Costs associated with the development of a commercial cannabis regulatory program:
o Initial outreach and exploration
o Ordinance development
o Environmental review
o Meeting costs and development of staff reports and other materials
o Development of application procedures and guidelines
o Development of appropriate fees
o Development of regulatory protocols and administrative procedures
Low
Estimate
"Best"
Estimate
High
Estimate
Population of Los Gatos 33,529 33,529 33,529
Population of surrounding service area 201,119 201,119 201,119
Total population of service area 234,648 234,648 234,648
Percentage of population that uses cannabis 10% 13% 22%
Number of cannabis users 23,465 30,504 51,623
Average transaction amount $73 $73 $73
Transaction frequency (per month)222
Monthly gross receipts $3,425,864 $4,453,624 $7,536,902
Annual gross receipts $41,110,373 $53,443,485 $90,442,821
Est. leakage to other licensed retailers (30%)$8,222,075 $10,688,697 $18,088,564
Est. leakage to black market (30%)$20,555,187 $26,721,743 $45,221,411
Adjusted annual gross receipts $12,333,112 $16,033,046 $27,132,846
Cannabis business tax rate:
4.00%$493,324 $641,322 $1,085,314
5.00%$616,656 $801,652 $1,356,642
7.00%$863,318 $1,122,313 $1,899,299
Bradley‐Burns 1.0% local sales tax $123,331 $160,330 $271,328
Revenue Projections for Cannabis Retailers
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Costs associated with the review and permitting of individual cannabis businesses:
o Development of an RFP for cannabis businesses (if utilized)
o Conducting application reviews and applicant interviews
o Background checks
o Land use permitting and entitlements, including CUP hearings (if needed)
o Processing building permits
o Pre‐license inspections
o Consultant costs associated with any of the above
Costs associated with ongoing monitoring and permit renewals:
o Regulatory compliance inspections
o Other routine inspections that may be required (public health, fire department, etc.)
o Annual revenue audits to ensure proper reporting and remittance of fees/taxes
o Permit renewal processing
o Program administration
Costs associated with enforcement and appeals:
o Regulatory enforcement of any findings of non‐compliance
o Processing and conducting any appeals of enforcement actions
o Law enforcement actions against licensed cannabis businesses where necessary
Each of the costs identified above may be fully offset through regulatory fees charged to cannabis
businesses. Typically, after approval of a regulatory ordinance, local jurisdictions will adopt a cannabis
fee schedule that represents 100% full cost recovery for administrative oversight and enforcement of the
cannabis industry. These fees are charged to licensed cannabis business owners, applicants and licensees,
who are the direct beneficiaries of the commercial cannabis program.
Beneficiaries of the cannabis program will vary by regulatory activity. For example, development of the
regulatory program benefits those who are permitted to operate a business that would otherwise be
prohibited. Processing of applications and land use permits benefits the applicants of the proposed
businesses, regardless of whether they ultimately receive a license. The cost of monitoring existing
businesses for compliance and processing permit renewals benefits the business as it allows them to
continue to operate.
Because the Town is still in the exploratory phase of developing a cannabis ordinance, it is currently
unknown how many commercial cannabis businesses might be allowed, what methodology will be used
to select eligible businesses, in what locations they will be permitted, and under what level of oversight
they will be regulated. Given this uncertainty, it is not yet possible to calculate the specific permitting and
regulatory costs that Town will incur in developing and implementing a cannabis program, or the fees
necessary to recover those costs. As a result, the simplest way of estimating a range of possible Town
expenditures is to conduct a survey of various cost recovery fees that have been adopted by other
jurisdictions.
Fees are generally divided into three categories that include; 1) initial application fees; 2) permitting and
land use entitlement fees; and 3) annual regulatory fees. Each of these general categories may include
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multiple fees to cover distinct costs or services, not all of which would be applied in every case. Ultimately,
fees will vary by jurisdiction, depending upon a variety of local factors.
Initial application fees can vary greatly depending upon the details of the application process required by
the jurisdiction. Some cities or towns choose not to limit the number of cannabis businesses or to process
applications on a “first‐come, first‐served” basis. Others may solicit applications for a limited number of
permits, which will then be reviewed on either a quality assurance (pass/fail) basis or merit‐based (high‐
low score) basis. Final selection of permittees may be performed either through a discretionary process
or via lottery, where permittees are chosen at random from a pool of qualifying applicants.
The table below provides a comparison of application fees charged per cannabis business across various
jurisdictions:
In this table, HdL has identified average cannabis business license application fees for 15 cities from
around California. The fees range from a high of $28,189 for the City of Culver City, to a low of $3,011 for
the City of Oakland. Generally, these fees represent the full cost, per applicant, for reviewing and selecting
businesses to proceed through the permitting process. As such, the fees provide a rough estimate for the
per business cost the Town of Los Gatos could expect for developing and administering a cannabis
application process.
Once applicants have been selected to move forward into the permitting process, the land use entitlement
and building permit process is no different than it would be for other, similar businesses. The amount of
Town staff time (and thus the cost) may vary greatly depending upon the specific location, needed
construction or tenant improvements and other building requirements. As with any other construction
process, the costs associated with site plan review, conditional use permits, facility plan check, and on‐
site inspections would be fully recovered through zoning, building and fire review fees.
Agency (Year of Adoption)1 Application Fee
Culver City (2018)$28,189
San Luis Obispo (2018)$24,744
Chula Vista (2019)$24,063
Redwood City (2018)$22,604
Goleta (2019)$14,901
Santa Ana (2017)$14,282
Palm Springs (2017)$10,984
Oceanside (2021)$8,452
Placerville (2019) $8,336
Watsonville (2020)$7,900
Modesto (2018)$6,380
San Jose (2017)$5,461
Vista (2019)$4,318
Salinas (2017)$3,145
Oakland (2017)$3,011
Average Application Fee: $12,451
(1) Year of adult‐use cannabis program adoption.
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Annual permit fees vary significantly from jurisdiction to jurisdiction, based upon the desired level of
regulatory oversight and administration. Jurisdictions may require that businesses submit to one or more
regulatory compliance inspections per year, as well as annual cannabis revenue audits to ensure the
business is reporting and remitting the proper portion of gross receipts to the host city. In addition, some
jurisdictions choose to place certain regulatory roles within law enforcement, which may include POST
certified officers. This can greatly increase the cost for these regulatory services.
The table above provides the annual regulatory permit fees for the same 15 cities cited previously. Fees
range from a high of $147,645 for the City of San Jose to a low of $3,700 for the City of Watsonville. We
note that the regulatory fees for some jurisdictions may vary depending upon the specific types of
cannabis businesses allowed. In such cases, the table displays the highest cost. Among this sample set,
the average annual permit fee is $27,731 per year. However, this average is skewed by the fees for the
City of San Jose, which are more than three‐times higher than the next highest fees. We regard this as an
outlier as it is not representative of the overall range. When we exclude the fees from the City of San Jose,
the average annual permit fee among our sample set of California cities and counties comes down to
$19,166. We believe this lower figure is more representative of actual annual regulatory costs per
business.
Annual permit costs reflect the direct per‐business cost for each jurisdiction to provide its desired level of
regulatory oversight for permitted cannabis businesses, including regulatory monitoring and inspections,
revenue audits, annual permit renewals and overall administration of its cannabis business regulatory and
tax program. Where the Town falls within the range of possible outcomes identified in the table above
will depend upon the specific design of the local cannabis regulatory program.
Agency (Year of Adoption)1 Annual Permit Fee
San Jose (2017)$147,645
San Luis Obispo (2018)$41,065
Chula Vista (2019)$31,275
Redwood City (2018)$29,530
Culver City (2018)$27,771
Placerville (2019) $22,841
Modesto (2018)$21,740
Vista (2019)$19,967
Oakland (2017)$16,676
Santa Ana (2017)$12,529
Goleta (2019)$11,879
Palm Springs (2017)$10,984
Salinas (2017)$9,854
Oceanside (2021)$8,511
Watsonville (2020)$3,700
Average Annual Permit Fee: $27,731
(1) Year of adult‐use cannabis program adoption.
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In addition to direct regulatory costs, the Town may incur additional impacts to the community through
externalities associated with cannabis businesses. These externalities may include, but are not limited to:
Traffic impacts
Public health impacts
Public safety impacts
Nuisance impacts
Due to limited research available in these areas, HdL is not able to provide cost projections for the
potential negative externalities identified above. According to recent surveys of available research on
cannabis legalization in the US, “evidence is inconsistent and, in some cases, inconclusive regarding how
recreational cannabis legalization affects outcomes significant to public health, including cannabis use,
cannabis use disorder, cannabis related hospitalizations and poisonings, driving safety, and other
substance use.” Depending upon the study, findings may vary from “significantly positive, significantly
negative, to insignificant relationship” between cannabis legalization and various public health
outcomes.ix This lack of available research is caused, in part, by the ongoing classification of cannabis as
a Schedule I controlled substance, which limits funding opportunities available to researchers studying
cannabis related topics.
Similarly, there is little consensus regarding the public safety impacts from allowing licensed cannabis
businesses to operate locally. Some studies have found an association between the density of cannabis
retailers and neighborhood crime rates.x Other studies have found a negative relationship between
dispensary allowances and property crime rates.xi One study even found that cannabis retailers closings
were associated with increases in crime in the surrounding areas.xii Due to these inconsistent findings,
HdL is not in a position to provide the Town with cost estimates for the broader social and public health
impacts of transitioning consumers from the illicit market to the licensed and regulated cannabis
marketplace.
Comparison to Other Jurisdictions
The following analysis provides additional information on nine cannabis regulatory programs in California.
The jurisdictions were selected due to their proximity to the Town, and/or the fact that they share similar
demographic characteristics to Los Gatos (e.g. population, density, income level, etc.). The regulatory
programs include:
City of Burlingame, CA
City of Pacifica, CA
City of Martinez, CA
City of Fairfax, CA
City of Goleta, CA
City of Novato, CA
City of Mountain View, CA
City of Encinitas, CA
City of Santa Barbara, CA
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The goal of the analysis is to provide Town Council with a summary of key policy decisions made by other
jurisdictions during the development of their local cannabis regulatory programs. This information may
serve as a reference point for Town policymakers when deciding; 1) whether to adopt a cannabis program;
and 2) what provisions to include/exclude in a regulatory ordinance.
Categories of comparison include:
1. Method of Program Adoption
2. Permitted License Types
3. License Caps
4. License Issuances
5. Licensing Process
6. Zoning Requirements
7. Sensitive Use Buffers and Distances
8. Cannabis Business License Tax Rates
Findings from the analysis can be found in Attachment A to this report. A summary of key observations
from the analysis is provided below:
Council Adoption vs. Citizen Initiative: Most of the jurisdictions identified for comparison adopted their
cannabis programs through Council action. HdL has observed a recent uptick in the number of small
jurisdictions dealing with voter driven ballot initiatives to legalize commercial cannabis activity (e.g.
Redondo Beach, El Segundo, Dana Point, etc.). However, these efforts appear mostly limited to the
Southern California region at this time. Of the comparable jurisdictions identified, only one (1) of the
programs was approved through Citizen Initiative (Encinitas). In general, Citizen Initiatives place fewer
restrictions on the number, location and operation of cannabis businesses than ordinances that are
adopted by City Councils. Citizen Initiatives may only be amended through voter approval, which limit the
ability of cities to adjust regulatory requirements for cannabis businesses over time. For this reason, HdL
recommends against adopting cannabis programs through the initiative process.
Permitted License Types: Six (6) of the nine (9) cities that HdL analyzed allow multiple business types to
operate within their jurisdiction. The most common allowable license types include Retail (9) and
Manufacturing (6). The least common allowable license type includes Cultivation (3). This is likely due to
the larger footprint required for this activity, and its potential to have a greater neighborhood impact than
other use types (e.g. odor, facility design, etc.). Most of the cities analyzed placed a cap on the number
of allowable Retail business types. For other license types (i.e. Cultivation, Manufacturing, Distribution,
and Testing), cities have generally allowed the market and/or zoning restrictions to dictate the number of
licenses issued.
Licenses Issued: For most cities identified, the actual number of cannabis business licenses issued has
been less than the total number available. For Retail license types, this is likely due to fact that cities
require a significant amount of time to design and implement a competitive application process. The
intense industry competition involved in the Retail application process can create delays due to the
number of application reviews involved and/or appeals filed by businesses that are unable to receive a
license. HdL anticipates that all of the jurisdictions identified will reach the maximum number of allowable
Retail businesses. For non‐Retail businesses (e.g. Manufacturing, Distribution, Testing, etc.), HdL has
observed a sharp decrease in demand for these license types due to the oversaturation of the wholesale
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market. As a result, HdL anticipates that the Town of Los Gatos would receive limited interest for these
license types, even if the Town Council were to decide to make wholesale license types available to
applicants.
Licensing Process: In situations where cities have placed a hard cap on the number of available licenses,
different processes have been used to determine which businesses would be eligible to receive a license.
Specifically, cities have used a non‐competitive (1), merit‐based (5), first‐come first‐served (1), and public
lottery (2) process. For most local jurisdictions, HdL recommends using a hybrid merit‐based/lottery
approach, that allows for initial screening of applicants followed by random selection through public
lottery.
Zoning Restrictions: Zoning restrictions for cannabis businesses vary by city. Some cities (6) allow cannabis
businesses to operate in some combination of Commercial, Industrial and Mixed‐Use zones. Other cities
(2) limit cannabis business activity to commercial areas only. One (1) city allows cannabis businesses in
Industrial Zones only. Generally, HdL recommends allowing Retail businesses in Commercial Zones, and
non‐Retail businesses (cultivation, manufacturing, distribution, etc.) in Industrial Zones only.
Sensitive Use Buffers: The most common types of sensitive‐use buffers recognized by the cities identified
are schools, day care centers and youth centers, which are the default buffers recommended by the State.
Some cities recognize additional buffers, including playgrounds, tutoring centers, and residential zones,
which go beyond the minimum State standard. In practice, HdL has observed that the recognition of
additional buffers beyond the State default can have the unintended effect of driving up the price of real
estate in remaining areas of the Town (i.e. “Green Zones”) that fall outside sensitive use buffer zones.
Additionally, overly restrictive buffer requirements may increase the likelihood of overconcentration of
cannabis businesses in areas of the Town that remain eligible for cannabis activity. For these reasons, it
is important that Town staff to create “buffer maps” for Town Council consideration, before making any
decisions on appropriate buffer distances between cannabis businesses and sensitive uses.
Cannabis Tax Rates: Cities identified for comparison have adopted cannabis tax rates that range from 3.5%
to 6% of gross receipts for Retail, and 0% to 6% for non‐Retail cannabis activity. In addition, once (1) city
charges a square footage tax on cultivation, that ranges from $2 to $10 per square foot of canopy,
depending on whether to cultivator is licensed for indoor, outdoor, mixed light, or nursery activity.
i United States Census Bureau “Quick Facts; Saratoga city, California; Campbell city, California; Los Gatos town,
California; Santa Clara County, California; San Jose city, California” Population Estimates July 1, 2021
https://www.census.gov/quickfacts/fact/table/saratogacitycalifornia,campbellcitycalifornia,losgatostowncalifornia
,santaclaracountycalifornia,sanjosecitycalifornia/PST045221
ii Ross Marchant (2014) “Consumers will Travel 17 Minutes to Reach a Local Business”
https://www.brightlocal.com/2014/05/01/local‐business‐travel‐times/ Bright Local
iii California Department of Tax and Fee Administration “Cannabis Sales by County”
https://www.cdtfa.ca.gov/dataportal/dataset.htm?url=CannabisSalesByCounty
iv Substance Abuse and Mental Health Services Administration, 2019‐2020 National Surveys on Drug Use and
Health https://www.samhsa.gov/data/release/2020‐national‐survey‐drug‐use‐and‐health‐nsduh‐releases
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v CBS News (2018) “17 stoner states: Where's marijuana use highest?” https://www.cbsnews.com/pictures/17‐
stoner‐states‐wheres‐marijuana‐use‐highest/9/
vi Christopher Ingraham (April 20, 2017) “How many Americans regularly use pot? The number is, errr, higher than
you think” Sacramento Bee http://www.sacbee.com/news/nation‐world/national/article145681414.html
vii Eli McVey, et al. (2017) “Marijuana Business Factbook 2017” Marijuana Business Daily
viii Eli McVey, et al. (2017) “Marijuana Business Factbook 2017” Marijuana Business Daily
ix Cannabis Legalization In the US: Population Health Impacts, Health Affairs Health Policy Brief, July 1, 2021.
x Shi, Y., Meseck, K., & Jankowska, M. M. (2016). Availability of medical and recreational marijuana stores and
neighborhood characteristics in Colorado. Journal of Addiction, 2016, 1–7. https://doi.org/10.1155/2016/7193740
xi Hunt, P., Pacula, R. L., & Weinberger, G. (2018). High on crime? exploring the effects of marijuana
dispensary laws on crime in California counties. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3193321
xii Chang, T. Y., & Jacobson, M. (2017). Going to pot? the impact of dispensary closures on crime. Journal of
Urban Economics, 100, 120–136. https://doi.org/10.1016/j.jue.2017.04.001
City Method of Adoption Permitted License Types License CapDCC Licenses Issued(1)Retail Licensing ProcessBurlingame, CA ‐ City Council Adoption (2021) ‐ Retail Non‐storefront ‐ Retail Non‐storefront: 4 Total ‐ 0 (1 currently under review) ‐ Non‐competitive. Operators Permit & Conditional Use PermitPacifica, CA ‐ City Council Adoption (2017) ‐ Retail ‐ Manufacturing ‐ Testing ‐ Retail: 6 Total ‐ Manufacturing: No Cap ‐ Testing: No Cap ‐ Retail: 5 Licenses ‐ Manufacturing: 0 ‐ Testing: 0 ‐ Chronological Order of Date Received.Martinez, CA ‐ City Council Adoption (2019) ‐ Retail ‐ Manufacturing ‐ Distribution ‐ Testing Laboratory ‐ Non‐Storefront Retail ‐ Retail: 2 Total ‐ Manufacturing: 1 Total ‐ Distribution: 1 Total ‐ Testing Laboratory: 1 Total ‐ Non‐Storefront Retail: 1 Total ‐ Retail: 2 Licenses ‐ Manufacturing: 1 License ‐ Distribution: 1 License ‐ Testing Laboratory: 0 ‐ Non‐Storefront Retail: 0 ‐ Competitive ‐ Scored/Ranked ‐ Points Awarded by Proposal Review CommitteeFairfax, CA ‐ Town Council Adoption (2019) ‐ Retail ‐ Retail: 2 Total ‐ Retail: 1 License ‐ Competitive ‐ Scored/Ranked ‐ Points Awarded by Planning CommissionGoleta, CA ‐ City Council Adoption (2019) ‐ Cultivation ‐ Distribution ‐ Manufacturing ‐ Nurseries ‐ Retail ‐ Testing ‐ Cultivation: No Cap ‐ Distribution: No Cap ‐ Manufacturing: No Cap ‐ Nurseries: No Cap ‐ Retail: 15 Total ‐ Testing: No Cap ‐ Cultivation: 2 Licenses ‐ Distribution: 3 Licenses ‐ Manufacturing: 1 License ‐ Nurseries: 0 ‐ Retail: 3 Licenses ‐ Testing: 0 ‐ Competitive ‐ Scored/Ranked ‐ Points Awarded by City DirectorNovato, CA ‐ City Council Adoption (2019) ‐ Non‐Storefront Retail ‐ Testing ‐ Manufacturing ‐ Indoor Cultivation ‐ Microbusiness ‐ Distribution ‐ Non‐Storefront Retail: Unlimited ‐ Testing: 2 ‐ Manufacturing: 2 ‐ Indoor Cultivation: 2 ‐ Microbusiness: 3 ‐ Distribution: 1 (No limit if ancillary to another activity) ‐ Non‐Storefront Retail: 0, (1 in review) ‐ Testing: 0 ‐ Manufacturing: 0 ‐ Indoor Cultivation: 0, (1 in review) ‐ Microbusiness: 0, (1 in review) ‐ Distribution: 0 ‐ Competitive ‐ Scored/Ranked ‐ Points Awarded by Proposal Review CommitteeMountain View, CA ‐ City Council Adoption (2019) ‐ Non‐Storefront Retail ‐ Retail ‐ Non‐Storefront Retail: 3, or ‐ Retail: 3, or combination thereof. ‐ Non‐Storefront Retail: 0 ‐ Retail: 0 ‐ Applications Screened ‐ Qualified Applications Placed in Lottery ‐ Zoning Administrator Randomly Selects ApplicationsEncinitas, CA ‐ Voter Driven Initiative (2020) ‐ Retail ‐ Cultivation ‐ "Product Manufacturing" ‐ "Cannabis Kitchens" ‐ Distribution ‐ Retail: 4 ‐ Cultivation: No Cap ‐ Manufacturing: No Cap ‐ Distribution: No Cap ‐ Retail: 0 ‐ Cultivation: 0 ‐ "Product Manufacturing": 0 ‐ "Cannabis Kitchens": 0 ‐ Distribution: 0 ‐ Competitive Lottery ‐ Applicants Graded and Placed into Tiers ‐ Applicants in 1st Tier Randomly Selected ‐ 1st Tier Exhausted, Applicants in 2nd Tier Randomly SelectedSanta Barbara, CA ‐ City Council Adoption (2018) ‐ Indoor Cultivation ‐ Manufacturing ‐ Distribution ‐ Retail Storefront ‐ Testing ‐ Indoor Cultivation: No Cap ‐ Manufacturing: No Cap ‐ Distribution: No Cap ‐ Retail Storefront: 3 ‐ Testing: No Cap ‐ Indoor Cultivation: Not Avail. ‐ Manufacturing: 2 ‐ Distribution: 3 ‐ Retail Storefront: 3 ‐ Testing: 0 ‐ Competitive ‐ Scored/Ranked ‐ Points Awarded by Permit Application EvaluatorCOMPARISON OF CANNABIS REGULATORY PROGRAMS ‐ LICENSING(1) Note: Current license data is based primarily upon information from the Department of Cannabis Control (DCC). DCC data reflects issuance of a State license, which may or may not coincide with final issuance of a local license. As a result, actual number of businesses currently in operation within each jurisdiction may differ from figures indicated above. In addition, DCC data does not currently include manufacturing license totals by City. As a result, manufacturing license totals shown above are based upon amounts reported on City cannabis websites and/or recent news articles published within those jurisdictions.ATTACHMENT A‐1
CityRetail Zoning Non‐Retail Zoning Sensitive Use BuffersBurlingame, CA ‐ "Rollins Road" / "Inner Bayshore": Mixed Use, Commercial, Light Industrial ‐ N/A ‐ Residential Use, Schools: 600 feet ‐ Day Care, Youth Centers: 600 feetPacifica, CA ‐ "Cannabis Operation Overlay District": Neighborhood Commercial, Service Commercial, Planned Development, Community Commercial ‐ Manufacturing: Service Commercial ‐ Testing: Community Commercial, Service Commercial ‐ Schools, Daycare Centers: 600 feet ‐ Youth Centers: 200 feetMartinez, CA ‐ Light Industrial, Neighborhood Commercial, Controlled Industrial, Thoroughfare Commercial ‐ Manufacturing: Controlled Industrial, Light Industrial, ‐ Distribution: Controlled Industrial, Light Industrial, ‐ Testing Laboratory: Controlled Industrial, Light Industrial, Research and Development ‐ Schools, Daycare Centers: 600 feet ‐ Youth Centers: 600 feetFairfax, CA ‐ Highway Commercial, Central Commercial, and Limited Commercial ‐ N/A ‐ School, Youth Center: 600 feet ‐ Daycare, Tutoring Center: 300 feet ‐ Delivery Only: School, Youth Center: 250 FeetGoleta, CA ‐ Community Commercial, General Commercial, Old Town, and Regional Community ‐ Cultivation: Business Park, Industrial General, Service Industrial ‐ Distribution: Business Park, Industrial General, Service Industrial ‐ Manufacturing: Business Park, Industrial General, Service Industrial ‐ Nurseries: Business Park, Industrial General, Service Industrial ‐ Testing: Business Park, Industrial General, Service Industrial ‐ School: 600 feet ‐ Residential Land Use: 100 FeetNovato, CA ‐ Light Industrial/Office, Commercial/Industrial, Business and Professional Office ‐ Cultivation: Light Industrial / Office, Commercial / Industrial ‐ Distribution: Light Industrial / Office, Commercial / Industrial ‐ Manufacturing: Light Industrial / Office, Commercial / Industrial ‐ Nurseries: Light Industrial / Office, Commercial / Industrial ‐ Testing: General Commercial, Downtown Core Retail, Light Industrial / Office, Commercial / Industrial, Downtown Core Business, Business and Professional Office ‐ School, Youth Center: 600 feetMountain View, CA ‐ Commercial Service, General Industrial, Limited Industrial, Corridor Areas, Core Character Area, General Character Area, Edge Character Area ‐ N/A ‐ School: 600 feet ‐ Childcare Center: 250 feetEncinitas, CA ‐ Commercial, General Commercial, Commercial Mixed Use, Mixed Use Land Use ‐ Cultivation: Agriculture ‐ "Product Manufacturing": Light Industrial, Agricultural ‐ "Cannabis Kitchen": Business Park, Light Industrial, Agriculture, General Commercial ‐ Distribution: Business Park, Light Industrial ‐ Daycare, Playground, Other Retailer, School: 1,000 feet ‐ Youth Center: 600 feet ‐ Exceptions allowed for "geographic barriers" between cannabis business and sensitive useSanta Barbara, CA‐ Light Manufacturing ‐ Light Manufacturing ‐ Schools, Daycare, Youth Center: 600 feetATTACHMENT A‐2COMPARISON OF CANNABIS REGULATORY PROGRAMS ‐ ZONING
City Retail Non‐RetailBurlingame, CA ‐ 5% of gross receipts. ‐ N/APacifica, CA ‐ 6% of Gross Receipts ‐ Manufacturing: 6% of Gross ReceiptsMartinez, CA ‐ Negotiated through Community Benefit Agreement (CBA) ‐ Most Recent CBA: 6% of Gross Receipts ‐ Negotiated Through CBA ‐ Most Recent CBA: None available on recordFairfax, CA ‐ Information not readily available ‐ Information not readily availableGoleta, CA ‐ 5% of Gross Receipts ‐ Cultivation: 4% of Gross Receipts ‐ Distribution: 1% of Gross Receipts ‐ Manufacturing: 2% of Gross Receipts ‐ Nurseries: 1% of Gross Receipts ‐ Testing: 0% of Gross ReceiptsNovato, CA ‐ Negotiated through Community Benefit Agreement (CBA) ‐ Most Recent CBA: 3.5% of Gross Receipts ‐ Negotiated Through CBA ‐ Most Recent CBA: 1.5% of Gross Receipts (Testing), 3‐4% of Gross Receipts (Microbusiness)Mountain View, CA ‐ 9% of Gross Receipts ‐ N/AEncinitas, CA ‐ Pending Voter Approval ‐ 4% to 6% of Gross Receipts ‐ Pending Voter Approval ‐ Retail: 6% of Gross Receipts (Max) ‐ Cultivation: $10/sq. ft. of canopy indoor, $7/sq. ft. of canopy greenhouse, $4 per square foot of canopy outdoor, $2/sq. ft. of canopy nursery (Max) ‐ Distribution: 3% of Gross Receipts (Max) ‐ Manufacturing: 4% of Gross Receipts (Max) ‐ Testing: 2% of Gross Receipts (Max)Santa Barbara, CA ‐ 5% of gross receipts. ‐ Distribution: 4% of gross receipts ‐ Testing: 4% of gross receipts ‐ Cultivation 2% of gross receipts ‐ Manufacturing: 3% of gross receiptsATTACHMENT A‐3COMPARISON OF CANNABIS REGULATORY PROGRAMS ‐ TAX RATES