Orange County residents could be able to buy recreational marijuana in Santa Ana as soon as New Year’s Day, after the city became the first and only jurisdiction in the county to allow commercial pot shops.
The Santa Ana City Council voted Nov. 9 to begin the process of licensing up to 30 recreational cannabis shops to operate locally. That makes the city an outlier in Orange County, where nearly all jurisdictions have opted to ban the commercial marijuana businesses that Prop. 64 allows to open in 2018.
The city plans to begin issuing licenses for recreational pot shops in mid-December, but operators will also need state approval to begin non-medicinal marijuana sales. At the same time, the city is preparing for a large influx of illegal dispensaries that city officials said they expect to open alongside the permitted ones.
Many of Santa Ana’s new licenses likely will go to the city’s 17 existing medicinal marijuana dispensaries – and it’s those shops that are most likely to be able to sell recreational pot the soonest.
City officials said they expect to issue licenses quickly for local medicinal dispensaries that apply, providing they are in good standing. After that, it’s a matter of how quickly the state can review applications and issue its licenses. Alex Traverso, a spokesman for California’s Bureau of Cannabis Control, said it’s “likely those with local approval will have a quick path to the (temporary) state license and will likely be operating very close to Jan. 1.”
Santa Ana’s earliest “adult-use” pot retailers will sell the recreational cannabis from the same shops where they’re already selling medicinal marijuana. But other city licenses will go to applicants who don’t currently have local businesses. The road to recreational sales will be more difficult for that second category of candidate, which will go through a lengthier, merit-based review process. City officials will pick winners based on who the city thinks are best qualified to operate.
City officials decided to ditch the lottery system used to select medical pot shops in Feb. 2015, in part because some winners lagged to open and some losers alleged the drawing had allowed businesses to buy their way in by purchasing multiple entries.
“We felt the merit-based system would allow the city to select the most experienced and successful operators,” said Jorge Garcia, Santa Ana’s acting assistant to the city manager.
The council stopped short of its original plan to permit numerous commercial marijuana businesses, including cultivation, distribution, manufacturing and testing ventures. City councilmen David Benavides and Juan Villegas said they didn’t want the city to rush its approval of those businesses. City staff said the council will revisit whether to license those uses sometime next year.
Daniel Yi, a spokesman for MedMen, a Southern California medical marijuana dispensary chain, said the company will apply for a recreational license for its Santa Ana location and expects to be selling both medicinal and recreational cannabis on Jan. 1.
“From an operational perspective, it’s not going to be a whole lot different,” Yi said. “It’s not like there will be one section of the store for medical, one section for recreational. Everyone is going to have the same experience.”
At the Nov. 9 meeting, city officials said they expect to see a glut of illegal pot shop operators open in Santa Ana in early 2018, potentially increasing the price of enforcing the city’s marijuana laws.
Recreational operators will pay a fee to help fund that enforcement. But the city plans to ask voters to approve a new tax on recreational cannabis during the November 2018 election.
Santa Ana voters approved a tax on medicinal marijuana in 2014. The city council is set to vote on Tuesday, Nov. 21, to increase that tax rate from 5 percent to 6 percent to help fully fund enforcement efforts.