San Luis Obispo should take a measured approach to cannabis and consider the safety and welfare of residents while allowing conservative growth and competition among businesses.

That’s the top line of the SLO Chamber’s position as adopted by the Board of Directors on Dec. 21. The position guides the Chamber’s advocacy with city officials as they work to create the framework regulating the emerging adult-use cannabis industry.

The manufacturing and sale of recreational cannabis became legal Jan. 1 following the passage of Prop 64 in November 2016. But many cities, including San Luis Obispo, have yet to finalize regulations regarding licensing, size, location and other requirements for cannabis businesses.

The Chamber’s position was crafted over several months by a Legislative Action subcommittee that met with city officials, attended workshops, reviewed the Open City Hall poll results and studied the city’s white paper, which included case studies of Denver, Seattle and Portland.

The five-member subcommittee, chaired by Fitch Even partner Tom Lebens, also reached out to city officials, chamber executives and business owners in five smaller cities (Bend, Ore., Telluride, Colo., Monterey and Seaside, Los Gatos and Santa Barbara) to learn about their approach and experiences.

Informed by their findings, the subcommittee favored a measured approach, drafting several recommendations adopted by the board, including:

  • No more than five adult-use retail businesses citywide
  • A rigorous application and screening process for licenses
  • Strict performance and operating standards for cannabis businesses, including an annual review
  • Separate limitations on square footage for manufacturing and indoor cultivation
  • Minimal additional taxation on top of the state-mandated 15 percent and 7.75 percent local sales tax

The regulations should also be subject to periodic review, the position recommends, recognizing the difficulty in balancing complex dynamics.

“The City of San Luis Obispo’s cannabis regulations should consider safety and welfare of citizens, the character of our community and compliance with state and federal law while allowing conservative growth and competition within the emerging adult-use cannabis industry,” the adopted position states. “The San Luis Obispo Chamber of Commerce recognizes the difficulty in balancing these complex dynamics and encourages a measured approach by the City to mitigate unforeseen consequences.”

The Chamber is now advocating its stance as the city works toward adopting regulations, which could come before City Council in late February. Following adoption of the regulations, a special tax will be placed on the November 2018 ballot for voter approval. 

Preliminary estimates indicate that the city could see up to $500,000 in tax revenue if it allows cultivation and distribution in Fiscal Year 2018-2019, growing to $3 million in the next couple years.