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*Update: March 23, 2020

The City of San Luis Obispo has completed the review process for one additional cannabis businesses that applied for permits under the city’s cannabis regulations. SLO Cal Roots LLC, was granted the third Retail Storefront Commercial Cannabis Operator Permit from the January 2019 application period to open a retail storefront business in the City.

*Update: October 23, 2019

The City of San Luis Obispo has completed the review process for two additional cannabis businesses that applied for permits under the city’s new cannabis regulations. Natural Healing Center, LLC, was granted a Commercial Cannabis Operator Permit to open a retail storefront business. An Operator Permit for Elemental Wellness, another retail storefront applicant, was not approved, although the company is eligible to reapply in the future. SloCal Roots, will now proceed with a background screening. For more information click here.

On Nov. 8, 2016, a new California law went into effect legalizing the recreational use of cannabis by people 21 and older and creating a state regulatory and licensing system for cannabis businesses.

Under the state law, cities are allowed to create their own regulations and licensing process, which the City of San Luis Obispo did on May 22, 2018.

City staff worked with the community to create a thoughtful, transparent and fair process for granting permits to cannabis businesses. This approach was designed to protect the community’s character and quality of life while ensuring cannabis businesses operating here are well run and sustainable, including:

  • A commitment to local hiring and community support.
  • Equity ownership and competitive employee compensation.
  • A solid financial plan and the resources needed to support a successful business.
  • A commitment to sustainable business and environmental practices.

Permitting Process

Steps in the Process:

Applications submitted are reviewed and scored according to the adopted Merit Criteria. A Merit Criteria Example Sheet has been created for Applicants to use as an aid to see what types of documents and statements can be used for each Merit Criteria. Top scorers meeting a determined threshold of 70% of all available points will be issued Contingent Operator Permits and can then begin to work with the City’s Community Development Department on their use and building permits.

Following the successful completion of an extensive background investigation of all principals and partners which includes LiveScan fingerprint screening, applicants will be issued a final Cannabis Business Operator Permit.

In addition to BCC disqualifiers of applications, which is consistent with the City’s Municipal Code Section 9.10.070, the City has adopted additional disqualifiers considered in the City’s cannabis application and permitting process.

Nov. 8, 2016: New state law allowing recreational cannabis use

May 22, 2018 City passes the Cannabis Ordinance allowing commercial cannabis businesses to operate in the City

Nov. 6, 2018: City of San Luis Obispo voters adopt the Cannabis Business Tax Measure

Jan. 1-29, 2019: Initial Commercial Cannabis Business Operator Permit Application process opened

March 28, 2019: Five Contingent Operator Permits granted

April-Present: Background investigation process underway for applicants that received Contingent Operator Permits

Sept. 5, 2019: First two Operator Permits granted

Oct. 23, 2019:Third Operator Permit granted, new Contingent Operator Permit granted

December 3: City Council Adopts Resolution 11066 which updates the Cannabis Fee Schedule and City Council Adopts Resolution 11067 which updates the Cannabis Scoring Guidelines(Merit Criteria)

January 15th – February 18th, 2020: Cannabis Application period opened for Non-Retail Storefront, Cultivation and Other Cannabis Applications.

May 19, 2020: City issues one Contingent Operator Permit for a Non-Storefront Retail Cannabis Business from the January 2020 application period

July 1 st , 2020 to July 31 st , 2020: City opens the Annual Application Period for Non-Retail Storefront, Cultivation and Other Cannabis Applications.

Nov 3, 2020: City issues one Contingent Operator Permit for a Non-Storefront Retail Cannabis Business from the July 2020 application period

A maximum of three retail storefront businesses are allowed in the City at this time. All retail storefront Operator Permits have been issued at this time.

The City does not have a limit on the number of delivery, cultivation, manufacturing and other small businesses that can operate in San Luis Obispo.

Related Information

  • Gross receipts, or excise taxes, are assessed at every stage of cannabis production within the City including testing, retail sales, distribution and manufacturing. Cultivation taxes are based on the size of the canopy or license issued by the State. The current gross receipts tax is 6%.

Mobile Delivery Businesses:

For cannabis delivery businesses operating and delivering products within the City of San Luis Obispo, a Business License and Cannabis Tax Certificate is required.

Agency Links

For more information, contact Georgina Bailey, Cannabis Program Coordinator/Management Fellow, at (805) 783-7875.

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