Grover Beach approves pot rules, halves number of dispensaries

May 17, 2017

The Grover Beach City Council formally approved a pair of ordinances Monday night that will allow medical marijuana businesses to operate in the city. However, the council made a last-minute change decreasing the number of dispensaries that will be allowed to open in the city from four to two.

Following a 30-day grace period that is now underway, medical marijuana businesses will be allowed to apply for permits in Grover Beach. Under its new rules, the South County city plans to allow cultivation, manufacturing, transportation, distribution, testing and sales of medical marijuana.

Grover Beach will allow medical marijuana businesses to operate in industrial zones. The businesses must obtain standard land use permits, as well as commercial cannabis permits, a new element of Grover Beach’s city planning scheme.

There is expected to be competition for the two dispensary permits the city plans to award. More than two marijuana businesses have expressed interest in opening a dispensary in Grover Beach.

With its ordinances formally adopted, Grover Beach is slated to become the first city in San Luis Obispo County to allow cannabis businesses to operate in the aftermath of Proposition 64 passing. It is also envisioned that once the state of California begins licensing recreational marijuana shops in 2018, Grover Beach may permit pot businesses that cater to all adults, rather than just medical patients.

In addition to now having a regulatory framework for pot businesses, Grover Beach already has a marijuana tax regime in place. In conjunction with the statewide vote to legalize cannabis, Grover Beach voters backed a pot tax measure on last November’s ballot.

The initiative imposes a maximum 5 percent tax on gross receipts for medical marijuana business activity and a maximum 10 percent tax on non-medical marijuana businesses. Additionally, pot farms and nurseries will be taxed at a maximum of $25 per square foot of canopy on the first 5,000 square feet and $10 per square foot thereafter. An additional excise tax was passed as part of Prop. 64.

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