As of July 9, the Grover Beach City Council amended permits for four cannabis retailers in the area. The four businesses had been limited to medical marijuana sales before and were not able to sell any for recreational purposes. The ordinance amendment allowing recreational commercial cannabis businesses was approved by the council in May of this year and local businesses were required to apply for certain permit amendments in order to qualify for the adult-use recreational permit.
Only two out of the four permitted businesses are currently operating–Natural Healing Center and 805 Beach Breaks. Until last week, all four businesses were only allowed to sell medicinal marijuana products.
The Natural Healing Center has not had time to host a grand opening event as it has only been open for two weeks. One of the co-founders, David Separzadeh said the business, located at 998 Huston Street, is officially allowed to sell to customers seeking recreational marijuana.
The state license approval makes the Natural Healing Center the first physical location in the county where is it legal to purchase recreational cannabis. On Tuesday afternoon Separzadeh stated, “It’s extremely exciting. We’re happy to be open and we’re happy to be in Grover Beach. We’re ready to serve our community.”
Business is expected to increases by roughly 25 to 30 percent. This is comparable to what other cannabis retailers in California have seen when they added recreational cannabis to their offerings in January. The Natural Healing Center has said they have been receiving up to 40 calls a day asking when the shop expected to have recreational cannabis for sale.
Dan Fried, owner of 805 Beach Breaks, said that his business is awaiting the new adult-use state license before it can open the doors to recreational customers but that they are prepared to sell products immediately. They are expecting license approval by the end of the week and would be ready to sell products the same day if they were able to get the license early enough in the day.
Fried is planning to host a celebration even when the store receives their license. He said the event would take place on an upcoming weekend. Customers can stay updated on the availability of products and of the “little shebang” on the business’s website, 805beachbreaks.com. 805 Beach Breaks is located at 1053 Highland Way and opened in May.
The remaining businesses that received the original permits in January, Banana LLC and Milkman, have not yet opened to the public. With the new recreational use law now in place, both businesses were quick to get the amended permits in place so that they will be ready to sell to both medical cannabis and recreational customers as soon as they are able to open. Both businesses have indicated to City Manager Matt Bronsons that they are planning to open sometime in the fall.
In a staff report from the city, the city’s existing commercial cannabis tax was expected to generate approximately $700,000 in revenue in 2018-2019. The commercial cannabis tax was approved by voters in 2016. With the addition of recreational use cannabis sales, the city is expected to see a substantial increase.
The city could see an additional $800,000 in revenue in the 2021-22 fiscal year based on projected sales thanks to the new adult-use customers. Based on projected sales from both medical and recreational businesses and products, this would add up to approximately $1.5 million for the city, according to the staff report.
The report does not account for new cannabis businesses in the future or sales tax revenue from adult-use products which also have state and local taxes charged. The real economic impact could be more for the city of Grover Beach.