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Santa Barbara Auditions Prospective Pot Businesses

Legalized Cannabis Outlets Remain More Myth Than Reality, for Now

City administrators are fielding top cannabis candidates for coveted retail locations.
Paul Wellman (file)

These are tantalizing times for recreational pot consumers hoping to buy recreational weed on State Street. This Friday morning, no fewer than six cannabis operators will be put through their paces at a beauty pageant for pot shops hosted by a team of City Hall administrators who will be selecting the top three. Earlier this year, the City Council decreed there would be no more than three cannabis retailers within city limits pursuant to rules adopted in the wake of Proposition 64, the 2016 ballot initiative legalizing recreational marijuana cultivation, distillation, manufacture, and retail sales. But even when the final winners are announced a couple of months from now, the victors must still endure the time-consuming process of getting building permits approved and certificates of occupancy issued.

Anthony Wagner, City Hall’s de facto pot czar ​— ​and Police Chief Lori Luhnow’s right-hand man ​— ​suggested that the next cannabis emporium to open its doors in Santa Barbara will most likely be an old-school medical dispensary slated for 118 North Milpas Street. Wagner predicted that could happen within the next month. He likewise suggested that another medical ​— ​as opposed to recreational ​— ​dispensary could soon open on upper De la Vina Street.

In the meantime, he said, competition between the six candidates for recreational dispensaries has grown sharp and intense. “We’ve reached the stage where the cannibalistic process is starting to take place in order to preserve or replace those in line,” Wagner said. “This is the beginning of the nasty phase of things.”

Reports are now making the rounds of spousal abuse charges having been filed against one operator and that another operator had been involved in a bribe scandal that led to the conviction of an IRS agent in Seattle two years ago. (In that instance, the operator helped launch a successful sting operation against an IRS agent he claimed was trying to shake him down. He offered the agent $20,000, and when it was time to consummate the deal, the FBI was on hand.) Wagner said he’s conducted state and federal background checks on about 100 individuals ​— ​owners, principals, and representatives ​— ​associated with these operations. Excluded from consideration, he said, is anyone convicted in the last 10 years of a violent felony, a serious felony, fraud and embezzlement, or using minors to traffic drugs. Wagner added that the screening process is not quite complete.

Canndescent CEO Adrian Sedlin is one of several candidates vying for one of the three available cannabis retail spots in S.B.
Paul Wellman (file)

Of the six proposals, three are located on State Street from the 900 to 1100 blocks. One is set for the 1000 block of Chapala, another for the former site of the last movie rental store in Santa Barbara, the Video Shop, located at De la Vina and Mission streets. Yet another still is on the 3500 block of State Street. Wagner said the six proposed dispensaries scored at least 800 out of 1,000 points on a calibrated rating system. He said a total of 14 applications were submitted, but the other eight didn’t make the cut. Based on the results from this Friday’s public hearing, he said it was likely another round of evaluations would ensue; only those scoring 900 or above would proceed. The last criterion, Wagner said, was neighborhood integration. That consideration would be given extra weight.

Complicating the selection process is a requirement that no dispensaries be located within 1,000 feet of each other. With four bunched so tightly downtown, that could prove logistically challenging. On June 7 the same selection committee will hear from six additional cannabis operators seeking various permits for pot oil, from manufacture to home delivery. For those, there is no council-imposed cap as there is for retail storefronts.

Cannabis cultivators have been chomping at their collective bit for retail outlets to be permitted in Santa Barbara County, which leads the state in the number of temporary cannabis licenses. Currently cannabis cultivation exceeds demand by a factor of 800 percent, and the price per pound is falling faster than that of oil per barrel. Lack of sales outlets coupled with an intense regulatory regimen and sky-high taxes have prompted many industry observers to conclude legalization is increasing the size of the state’s marijuana black market, not shrinking it.

County supervisors approved the licensing of no more than eight new retail dispensaries throughout unincorporated Santa Barbara County. Translated, that’s no more than two per supervisorial district, to be selected on a random basis. But before that process can even start, the California Coastal Commission has to approve the county’s cannabis rules and regulations for any district along the coast. That’s all but one. Translated, that means it will take at least a year before new retail outlets can be applied for in all but the 4th Supervisorial District, which happens to be landlocked. Of all the cities, only Santa Barbara and Lompoc have allowed for new recreational dispensaries. Lompoc has set no limits on number.

Sitting on the review committee for the City of Santa Barbara are representatives from the Community Development Department, the Police Department, the Fire Department, the City Attorney’s office, and the City Administrator’s office. Friday’s hearing begins at 9 a.m. and will take place at 630 Garden Street in the David Gebhard Room.

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