Lompoc will consider how much cannabis is too much for the city boasting more than 10 retail shops as well as applications for more.
When agreeing to allow cannabis businesses to operate in Lompoc several years ago, the City Council chose not to limit the number of permits issued and let the free market reign.
Four years after issuing the first permit, the city shows significant numbers for commercial cannabis use business applications — 26 applicants for retail dispensaries, 14 for distribution, 10 for manufacturing, five for cultivation, seven for processing, two for laboratories and two for microbusinsses.
Luis Castaneda of The Roots Dispensary asked the council on July 19 to assess the industry, saying the city has too many retail locations for cannabis and the number is not sustainable.
“When we started this, Lompoc was really hoping to be a destination for tourists coming to see cannabis,” Castaneda said. “We’ve already accomplished that. Now it’s tending to be a little bit overboard. I’m an advocate for the industry, but before that I’m an advocate for this town.”
Four retail establishments that received city permits have closed within the past four years. Two of those closed shops, initially Coastal Dispensary and later Perfect Union, were housed at the same address — 124 South J St., the former home of a dance studio.
The applications for new cannabis businesses aren’t slowing down. In 2022, the city has received nine requests for cannabis use business license applications for a variety of categories.
Cannabis has attracted higher rates for rent, Castaneda said, and other businesses fear losing leases for their spaces to operate because a landlord wants a more lucrative renter from the cannabis industry. That has left small businesses in limbo as they face an uncertain future, he added.
“Let’s come up with some scenarios … to make this better for our community, better for all of our businesses and better for Lompoc long term,” Castaneda said.
Linsey Silva, a fourth-generation Lompoc resident and bud tender manager at the GreenHouse cannabis boutique, also pleaded with city leaders for action. She said several areas remain saturated with cannabis retail stores, noting that five have been proposed on the same block.
“In order to maintain economic vitality with the cannabis industry, the state suggests one dispensary for every 10,000 residents,” Silva said. “Lompoc adopted an open market, and 11 dispensaries are open and currently operating as of today. We currently have a ratio of 2.5 dispensaries per 10,000 residents.”
With the number of pending applications and issued applications (not counting the businesses that closed), Lompoc looked to have 26 cannabis storefront permits by the end of the year, a number that Silva said would give it the most dispensaries per capita in California with a ratio of 5.88 dispensaries per 10,000 residents.
“This will devalue the current cannabis business and operations by 70% to 80%, presenting an undue hardship to essential businesses,” Silva said. “Without a proper plan, this feels like a money grab and another failed attempt at economic development in Lompoc.”
To create a sustainable cannabis market, she urged city leaders to implement a ban on new and pending cannabis retail licenses and establish a cannabis department at the city.
The cannabis market has changed during the past four years, said Dennis Bozanich, who helped craft Santa Barbara County’s cannabis rules before moving out of the area and starting a consulting firm.
“I do think some form of reduced number of licenses would benefit the city overall, would benefit your tax revenues as well,” Bozanich said. “I would ask you to really think through what the city wants to do with its cannabis industry and consider some limitations on that.”
Councilwoman Gilda Cordova received support in her call for the council to discuss a possible moratorium for the industry.
“I would just hope that would come with some sense of urgency,” Councilman Jeremy Ball said. “I just want to make sure we’re trying our best to sustain the benefit that we are getting from the players.”
Council members said they want the review to encompass the entire cannabis industry in Lompoc, not just retail dispensary licenses, and consider a moratorium on new permits.
Staff also had been preparing to present options for industry oversight in light of city voters approving a new tax rate for some cannabis businesses.
The city has stalled at creating a cannabis department, estimated to cost up to $1 million, until it received new proceeds from the cannabis tax approved by voters in 2020.
No other local cities have allowed unlimited numbers of retail cannabis dispensaries, and none has as many as Lompoc.
Santa Maria, the largest city in Santa Barbara County, decided to ban dispensaries entirely, and Santa Barbara, the second-largest city in the county, decided to allow only three dispensaries. Both cities are larger than Lompoc, which has about 44,000 people.
— Noozhawk North County editor Janene Scully can be reached at jscully@noozhawk.com. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.