The City of Watsonville is looking to make its first update to its retail cannabis business ordinance in four years.
On Oct. 10, the City Council considered 16 tweaks to the ordinance.
Proposed changes include allowing a new establishment, opening more of the city to new businesses and waiving some distance restrictions.
Currently, residential setback from retail cannabis shops is 250 feet, and from schools is 600 feet.
“If we’re going to look at allowing dispensaries in other commercial zones, then we might also need to look at either waivers or changing the distance requirements for a retail facility,” said Planning Director Suzi Merriam.
Currently, retail cannabis is allowed in Industrial Park General Industrial and Visitor Commercial zoning districts.
That, along with a rule limiting signage to one 20-square-foot sign, has left the existing retail cannabis shops hidden in industrial regions of the city with little hope of attracting customers. One proposal therefore asks the city to allow larger signs.
Other proposals include increasing store hours, relaxing requirements for annual business license renewal and requiring background checks for only store owners.
Currently, businesses must complete a new application package and submit a business plan every year.
“It’s a pretty big lift to review every year, so we’re wondering if there’s a way we can look at modifying this and paring it down to the information that we’re really interested in,” Merriam said.
The item before the council was only for discussion, and no action was taken. Merriam said she was “taking the temperature” of the council for items that will be brought back for in-depth discussion at future meetings, likely sometime in 2024.
Currently, Watsonville has three retail cannabis businesses. That’s compared to two in Capitola and five in the city of Santa Cruz.
The proposed changes under discussion came from the owners, who say that the current regulations—which city officials say are stricter than those imposed by the state of California—are cumbersome and time-consuming.
They also make it hard to compete with the still-active black market, Merriam said.
Creme de Canna, for example, is down a 500-foot driveway.
The definition of who is considered an owner also confuses things. Under the ordinance, even someone who gives $100 to a retail business is considered an owner and must undergo a weeks-long background check, Merriam said.
Changing that to the state threshold of 20% ownership would ease that process, she said.
Aaron Newsom, co-founder and Chief Operations Officer of Santa Cruz Veterans Alliance, has one of the city’s three retail licenses. He says the changes would help an industry that already is hurting.
“The industry has gone through a lot of hard times in the last few years, and it has made doing business very difficult,” he said. “I think some of these changes could make it a little more doable to do business and make this work in the city.”
Of all the proposals, only the requests to decriminalize psychoactive plants and allow flavored vaporizer products garnered a “hard no” from the council. The rest will come back for further discussion.
Councilwoman Vanessa Quiroz-Carter said she would support bringing all the proposals back, and said that loosening some of the restrictions could benefit the city.
“What’s in place by the state is already incredibly strict, and I think we’re shooting ourselves in the foot if we’re rejecting businesses that want to be here,” she said.
Councilman Jimmy Dutra said that increasing the number of dispensaries could hurt already struggling businesses.
“I think adding another one would probably not be good for any business because it sounds like they are not doing so great,” he said.
Councilwoman Kristal Salcido said that the community and other city departments should be involved in the process for future discussions.
“The more information the better,” she said. “We can’t just have one presentation on this. We need more input from more departments than just planning. A lot of these requests are shifting policy.
“All of these things have meaningful public safety implications, and we’ve heard nothing from public safety today.”
Changes under consideration
1. Allow an additional retail business
2. Consider opening a new zone for retail business
3. Consider waivers to distance requirements
4. Allow larger signs
5. Loosen the annual renewal process
6. Modify the definition of owner
7. Only require ID badges for owners
8. Increase the application period for non-retail businesses
9. Allow an increase to store hours
10. Change requirements for 24-hour on-site security
11. Allow some flavored vaporizer products
12. Decriminalize some psychoactive plants such as psilocybin mushrooms
13. Allow cannabis events
14. Only require background checks for owners
