Arroyo Grande City Council
December 9, 2025

Item 10.a.

City Council
Community Development Block Grant Recommendations for Year 2026 December 9, 2025

Project and Category
2025
Allocation
2026
Requested
Proposed
2026
Allocation
County Administration $8,353 $8,396 $8,396
Subtotal $8,353 $8,396 $8,396
Total $64,588
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

The County of San Luis Obispo (the “County”) has estimated that $64,588 in CDBG funds will be available to the City in the Fall of 2026. Funding estimates for 2026 are established by averaging the last three years’ allocations and reducing that average by 5%. Final funding allocation amounts are typically announced by HUD in the spring prior to the start of the upcoming Action Plan Year. This represents an increase of $333 from last year’s allocation. The County will help administer the CDBG program for the City, which will reduce City staff time involved. County staff will be paid for these administrative services through the CDBG program funds allocated to the City. Pursuant to the Cooperation Agreement between the County and the City (Attachment 1), 13% of the total available CDBG program funds, or $8,396, will be deducted by the County to meet its obligations under the terms of the agreement for administrative costs. The City will absorb any administrative costs associated with administering CDBG funds to provide the greatest program benefits with this funding.

BACKGROUND:

The City Council approved a Cooperation Agreement between the County of San Luis Obispo and the City of Arroyo Grande (Cooperation Agreement) County on June 13, 2023,
1 for the joint participation in the CDBG Program for Fiscal Years 2024 through 2026 (Attachment 1). The City, as a participant in the Housing and Urban Development (HUD) designated Urban County program, receives an annual formula-based allocation of CDBG funds. These funds are available for a variety of Community Development activities as long as the activities meet at least one of three national objectives, including:

1. Benefit low- and moderate-income persons;

2. Aid in the prevention or elimination of slums or blight; or

3. Address urgent community development needs that pose a serious or immediate threat to public health or welfare.

The County released a Notice of Funding Availability on September 11, 2025, and notified the public that the County and participating cities would accept applications for funding until October 10, 2025. 5 Cities Homeless Coalition (5CHC) and Community Action Partnership of San Luis Obispo County, Inc. (CAPSLO) submitted applications requesting

1 https://pub-arroyogrande.escribemeetings.com/filestream.ashx?DocumentId=7080

Item 10.a.

City Council
Community Development Block Grant Recommendations for Year 2026 December 9, 2025

funding from the City’s allocation of CDBG funds (Attachments 2 and 3). The requests are described in greater detail below.

If the City Council is supportive of staff’s preliminary recommendations, they will be sent to the County for review to ensure eligibility for CDBG program funding. The County’s Homeless Services Oversight Council will review applications requesting funding from the Public Services category in January 2026. The City will be informed of the outcome of that review and it will be incorporated into staff’s final recommendation to the City Council, which is tentatively scheduled for February 2026.

ANALYSIS OF ISSUES:

Public Service
Only one application was received requesting funding from this category for this year’s program. 5CHC’s application seeks funding to bolster its Homeless Prevention Program.

This program provides financial assistance to low-income households and individuals facing homelessness to quickly identify and resolve barriers to gaining or maintaining housing. This includes providing emergency rental assistance to households that would otherwise be facing homelessness and deposit assistance for households moving into new housing. 5CHC’s application indicates that funding from the City’s CDBG allocation, the case management and financial assistance would be used to support households in south San Luis Obispo County, which is defined in the application as the area between Avila Beach and the northern border of Santa Barbara County. The goal of the program is to help families avoid homelessness and remain in their homes while simultaneously identifying options for secure, long-term, and stable housing that they can afford to retain.

The program objectives align with the San Luis Obispo Countywide Plan to Address Homelessness. The total amount of CDBG funds requested by 5CHC from local agencies is provided in Table 2.

Table 2: 5CHC Funding Requests by Agency
Agency Amount Requested
City of Arroyo Grande $9,688
City of Pismo Beach $4,513
County of San Luis Obispo $29,226
Total $43,427
In previous years, the City Council has directed staff to prioritize the City’s available public service allocation of CDBG funding to support organizations and programs for homeless services. The request from 5CHC aligns with the San Luis Obispo Countywide Plan to Address Homelessness, and therefore, staff recommends funding 5CHC’s request of 2026 funds for $9,688 to support its services for individuals facing homelessness.

Housing Rehabilitation
One application was submitted seeking funding for housing rehabilitation. CAPSLO has requested $15,075 from the City’s allocation of CDBG funds for its Minor Home Repair

Item 10.a.

City Council
Community Development Block Grant Recommendations for Year 2026 December 9, 2025

project. The objective of the project is to complete minor home repairs and accessibility improvements in homes occupied by low and very low-income households. CAPLSO has requested funding for this project from the County and cities of Arroyo Grande, Pismo Beach, Atascadero, and Morro Bay and will perform outreach to identify households within those jurisdictions that qualify for this assistance and have needs that can be met through the program. There is no certainty that the project will identify eligible households in Arroyo Grande, and there is potential for at least a portion of the City’s funding to be spent outside of the city. Therefore, staff does not recommend allocating funding to this request.

Public Facilities
Staff recommends allocating the remaining available funding from the CDBG allocation to the Public Facilities category for the Curb Ramp and Sidewalk Improvement project.

The total funding recommendation is $46,504, which is the remaining funding available after fulfilling the request from 5CHC and the cost for the County’s Administration of the program, as required by the Cooperative Agreement. The project will improve curb ramps to ADA standards adjacent to streets being paved in conjunction with the annual Pavement Management Program. The use of CDBG funding furthers the objectives of the federal program, eliminating blight and addressing urgent community needs, while also allowing for the most efficient use of the City’s Pavement Management Program budget.

The project manager of the Pavement Management Program will also administer and perform the required reporting for CDBG funds, which allows the City’s portion of the administrative funds to increase the funding for the project. This recommendation is consistent with Council’s allocation of 2024 and 2025 CDBG public facilities funds.

Administration
Administration funds are limited to a 20% cap of the total CDBG funding available.

Pursuant to the Cooperation Agreement, 13% of the total available CDBG funds, or $8,396, will be deducted by the County to meet its obligations under the terms of the agreement for administrative costs. The remaining $4,521 from this category is recommended to be allocated to the Curb and Ramp and Sidewalk Improvement Project.

ALTERNATIVES:

The following alternatives are provided for the Council’s consideration:

1. Approve preliminary funding for the CDBG programs for the Year 2026, as proposed in Table 1;

2. Modify and approve preliminary funding for the CDBG programs for the Year 2026; or

3. Provide other direction to staff.

ADVANTAGES:

The recommended 2026 CDBG allocations fund important City priorities and are consistent with the Cooperation Agreement between the County and City. The City’s

Item 10.a.

City Council
Community Development Block Grant Recommendations for Year 2026 December 9, 2025

Community Service Grant Program provides an additional funding opportunity, separate from CDBG, for local public service programs that address unmet needs in the community.

DISADVANTAGES:

There are no disadvantages identified at this time.

ENVIRONMENTAL REVIEW:

The preliminary approval of allocations from the 2026 CDBG program is exempt from CEQA on the basis that it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. (State CEQA Guidelines, § 15061, subd. (b)(3).) The allocation of funding itself will have no effect on the environment and environmental review will be conducted for each of the projects funding through this program, if necessary.

PUBLIC NOTIFICATION AND COMMENTS:

The Agenda was posted at City Hall and on the City’s website in accordance with Government Code Section 54954.2.

ATTACHMENTS:

1. Cooperation Agreement

2. 5CHC Application

3. CAPSLO Application

,,._g

A COOPERATION AGREEMENT BETWEEN THE COUNTY OF SAN LUIS

OBISPO AND THE CITY OF ARROYO GRANDE FOR JOINT PARTICIPATION

IN THE COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM, THE

HOME INVESTMENT PARTNERSHIPS PROGRAM, AND THE EMERGENCY SOLUTIONS GRANT PROGRAM FOR FISCAL YEARS 2024 THROUGH 2026 THIS COOPERATION AGREEMENT is made and entered into on the date and year last written below, by and between the County of San Luis Obispo, a political subdivision of the State of California, hereinafter called "County," and the City of Arroyo Grande, a municipal corporation of the State of California, located in the County of San Luis Obispo, hereinafter called "City;" jointly referred to as "Parties".

WITNESS ETH
WHEREAS, in 1974, the U.S. Congress enacted, and the President signed a law entitled, The Housing and Community Development Act of 1974, herein called the "Act." The Act is omnibus legislation relating to federal involvement in a wide range of housing and community development activities and contains eight separate titles; and
WHEREAS, Title I of the Act is entitled "Community Development" and governs programs for housing and community development within metropolitan cities and urban counties or communities by providing financial assistance annually for area-wide plans and for housing, public services, and public works programs; and
WHEREAS, the Community Development Block Grant Program
(hereinafter referred to as "CDBG"), the HOME Investment Partnerships Act Program (hereinafter referred to as "HOME"), and the Emergency Solutions Grant Program (hereinafter referred to as "ESG") are consolidated under Title I of the Act; and
WHEREAS, the County has requested of the federal Department of Housing and Urban Development, hereinafter referred to as "HUD," designate the County as an "urban county;" and
WHEREAS, the County needs to requalify as an urban county and will be eligible to receive CDBG funds provided that the County's entitled cities 1 of 15
ATTACHMENT 1

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A. Applicant Information
Completed by [email protected] on 10/1/2025 2:10 PM Case Id: 30576
Name: Homeless Prevention, South County, 5Cities
Address: Homeless Coalition - 2026 P.O. Box 558, 100 S. 4th Street, Grover Beach, CA 93483
A. Applicant Information
Please provide the following information.

PRIMARY APPLICANT INFORMATION-LEAD AGENCY
A.1. Organization Name
5Cities Homeless Coalition
A.2. Type of Organization
Non-Profit
A.2.a. Define Other:

A.3. Please upload the following documentation:
 Proof of Active SAM.gov Registration *Required
Sam.Gov 5CHC EntityInformation_20250821-041838.pdf
A.3.a UEI Number: For more information, visit SAM.GOV
KR8JGGKBKEP9
A.4. Address
P.O. Box 558 100 S. 4th Street Grover Beach, CA 93483
A.5. Is the organization faith based?
No
A.6. Date of Incorporation
03/03/2009
A.7. Please upload the following documentation:
 Incorporation Documents *Required
5CHC Articles of Incorporation.pdf
 Organization Mission Statement *Required
5CHC Mission Statement.pdf
ATTACHMENT 2

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 General Liability Insurance *Required
5cities Homeless Coalition $1M Umb 25-26 WUM1921.PDF
5cities Homeless Coalition- PKG Policy 25-26.PDF
Insurance email.pdf
A.8. REQUIRED ACKNOWLEDGEMENT OF INSURANCE REQUIREMENTS. Has your organization read and understood the insurance requirements listed in “CDBG Example Exhibit D-General Conditions”? Yes
A.9 Annual Operating Budget
$5,863,950.00
A.10 Number of Paid Staff
50 A.11 Number of Volunteers
150

CONTACT INFORMATION
A.12 Contact Person Name
Janna Nichols
A.12a. Contact Person Title
Executive Director
A.12b. Phone Number
(805) 574-1638
A.12c. Email
[email protected]

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B. Applicant Capacity
Completed by [email protected] on 10/8/2025 3:44 PM Case Id: 30576
Name: Homeless Prevention, South County, 5Cities
Address: Homeless Coalition - 2026 P.O. Box 558, 100 S. 4th Street, Grover Beach, CA 93483
B. Applicant Capacity
Please provide the following information.

B.1. Describe the organization’s history of receiving and managing grants from County/State/Federal sources. 5CHC has been managing government grants for more than 10 years, and is currently 5CHC is contracted through more than 50 federal and state grants to provide nearly $6 million in services. 5CHC has never received a significant finding in any contract audit. In addition to grants for the provision of homeless services, prior grants have included funding for capital projects, such as the purchase and renovation of our Access Center and the development of our Cabins For Change Interim Shelter Program, which are both in the City of Grover Beach. Multiple grant monitoring activities have reviewed 5CHC for program and expenditure compliance for all local, state and federal grants; 5CHC has consistently received high praise for program quality and outcomes, reporting, compliance, and timeliness. See supplemental documents.

B.2. Describe how the organization participates in HMIS, Coordinated Entry, and the San Luis Obispo County Continuum of Care.
5CHC has participated in HMIS since 2014 and employs 2 FTE staff dedicated to ensure data quality and compliance in addition to program staff participation. A recent data quality report (run Sept. 15, 2025) highlighted 5CHC's efforts to improve data quality - showing 95.7% Universal Data Element Completion, 83.3% Exit Destination Completion and a

95.4% Annual Assessment Compliance - all far better than the full CoC system average.The Coalition’s staff have worked with the County to assess and invest in a new HMIS system, including the on-going HSOC Data Workgroup. 5CHC Executive Director is a member of the HMIS Project Steering Committee and an active member of HSOC, the Continuum of Care oversight body. 5CHC staff regularly participate in all standing committees and work groups. 5CHC is an engaged HSOC member, far exceeding the meeting attendance threshold of the HSOC bylaws, for both committee and full HSOC meetings. Historically 5CHC’s Executive Director volunteered to serve as chair of both the Data and Performance and Service Coordination committees, and volunteered on the steering committee for the County's Homeless Services Strategic Plan. She currently serves as Chair of the Data and Performance Committee. Beginning in 2019 5CHC joined with CAPSLO to participate in Coordinated Entry as a key intake partner. Annually 5CHC has far exceeded the number of CE's completed per contract requirements. 5CHC staff are among the most active members of the HSOC Coordinated Entry Advisory Committee, and the various workgroups addressing Coordinated Entry reform efforts. 5Cities Homeless Coalition has been a regional lead in every Point in Time Count conducted in the county since 2013, helping to both plan for the count as well as ensure effective regional volunteer recruitment and implementation. In each count, 5CHC has dedicated 10 or more staff members to assist in the count.

B.3. Briefly describe your organization’s auditing requirements (as outlined in 2 CFR § 200.500 and 24 CFR § 5.801), including those for the proposed project.
5CHC complies with all applicable federal laws, statutes, and regulations including the uniform financial reporting standards (24 CFR § 5.801) and the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200). 5CHC annually engages multiple monitoring reviews for various government contracts. 5CHC has never received a significant finding in any monitoring review. 5CHC also contracts for an independent audit annually. Annually since 2021-22 (due to increased federally sourced income) 5CHC has contracted for more rigorous

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“Single Audit”. 5CHC's Single Audit for 2023-24 is attached; as prior years, there were no significant findings by the auditor. 5CHC has engaged a local accounting firm, Glenn-Burdette, to undertake an audit for our most recent fiscal year 2024-25. This audit is expected to be completed by February 2026. It should be recognized that 5CHC efficiently manages its resources, with more than 85% of expenditures dedicated to program services and a minimal 14.6% spent on supportive administrative expenses of management, general, and fundraising activities.

B.3.a. Please upload your organization's Most Recent Financial Audit.  Most Recent Financial Audit *Required
5CHC-Audit-2024.pdf
B.4. Describe the organization’s experience delivering related programs/projects.

In addressing the challenges of homelessness, 5Cities Homeless Coalition (5CHC) recognizes that it will achieve better outcomes and make a meaningful impact when an integrated continuum of services are combined to address housing stability, self-sufficiency, and access to services to improve mental, physical and oral health. Working with those who are currently homeless and for those at-risk of homelessness, 5CHC has expanded its scope of services to focus on these three pillars to address the individual’s unique barriers to stable housing. Through housing navigation; financial literacy, income development and training; and health care advocacy and connection to ensure clients are receiving the health care they need, 5CHC is achieving lasting results. Since beginning services in 2012, 5CHC has developed its programs by looking at best practices from multiple providers; including a special focus of hiring those with lived experience as homeless and/or incarcerated. 5CHC endeavors to build trust, develop a sense of community, and respect. We serve as a client advocate, reducing barriers to services, and follow evidence-based models of care. 5CHC has consistently received high praise for program innovation, quality and outcomes. 5Cities Homeless Coalition is a key rapid re-housing and homeless prevention provider in San Luis Obispo County providing housing stabilization service, deposit, and rental assistance to those moving into permanent housing or those at-risk of homelessness. Since 2014 5Cities Homeless Coalition has been providing Rapid Re-Housing and Homeless Prevention services through a variety of funding sources including CalAIM (CenCal Health) ESG, CDBG, private foundations. In the 24-25 Fiscal Year, 5CHC assisted more than 500 people through RRH and Homeless Prevention services.

B.5. How will you document and maintain income status or presumed benefit status of each beneficiary? 5CHC has several methods for verifying income. Initial steps include self-certification of income by the client during intake assessment. This is followed by documentation collection, in which the clients provide proof of income (e.g. employment pay stubs, Cash-Aid report, child support, SSA Benefits award letter, etc.). If a client is working a cash-only job, we allow them to submit an employment verification form signed by their employer with appropriate contact information. Once documents are collected, case managers complete the Income Calculation sheet which calculates gross income for the household; calculations are then approved by the program manager. Annual gross income is used to determine AMI level based on household size. 5CHC understands documentation collection may be a barrier to some households and assists in whatever ways possible to obtain necessary documentation. Those verified to be currently homeless with no income documentation are presumed to be low-income. Re-determination for program eligibility occurs every 3 months for homelessness prevention clients and annually for rapid re-housing clients.

B.6. Briefly describe your agency’s record keeping system with relevance to the proposed project.

In keeping with our policies and procedures for this program, all client files are compiled and maintained according to a detailed program activity checklist, utilizing standard forms for all services. Included in this are reference notes for any required periodic updates or re-certifications. All applicable information is entered in HMIS at program entry, exit, and as appropriate for the project. 5CHC has staff dedicated to reviewing all client files regularly for accuracy and

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completeness. All payment requests include a detail of the client info, activity, funding source, and purpose. These requests for financial assistance become part of the client file and are cross referenced for appropriate documentation in the invoicing process. 5CHC also maintains a client walk-in and call log at our Access Center, noting the purpose of the call/visit. This is updated daily and is maintained by 5CHC’s Coordinated Entry Resource and Referral Specialists. Data from this log is often used to cross-reference prior contact with an individual who was not previously entered into a project in HMIS by 5CHC. All files are maintained electronically on 5CHC’s secure server, which is securely backed up daily off-site.

B.7. Identify all budgeted funds for project related costs. Include leveraged funding to exhibit financial sustainability of the project beyond the grant term if awarded.
5CHC’s total Homeless Prevention Budget is $623,939. Other sources of funding for this program include: CenCal Health (Cal AIM), CDBG 25-26, AG Arpa 23-26, HOME TBRA, City of Pismo Beach, County General Fund.

B.8. REQUIRED ACKNOWLEDGEMENT FOR FEDERAL GRANTS OR CONTRACTS. Does your organization certify that, if awarded funds, it will comply with the requirements as shown on "CDBG Example D-General Conditions" and "CDBG Example Exhibit E-Special Conditions"?
Yes
B.9. Does your organization comply with the Generally Accepted Accounting Principles (as outlined in 2 CFR § 200)? Yes

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C. Proposed Project & Project
Details
Completed by [email protected] on 10/9/2025 4:08 PM Case Id: 30576
Name: Homeless Prevention, South County, 5Cities
Address: Homeless Coalition - 2026 P.O. Box 558, 100 S. 4th Street, Grover Beach, CA 93483
C. Proposed Project & Project Details
Please provide the following information.

C.1. Name of Proposed Project
Homeless Prevention, South County
C.2. Project/Program Address
P.O. Box 558 100 S. 4th Street Grover Beach, CA 93483
C.3. Areas Served-Select all that apply
 City of Arroyo Grande
 City of Atascadero
 City of Grover Beach - Not eligible for CDBG or ESG
 City of Morro Bay
 City of Paso Robles
 City of Pismo Beach
 City of San Luis Obispo
 Unincorporated Community
Name of Unincorporated Community:

Avila Beach, Oceano, Nipomo
 Countywide
C.4. Provide a brief narrative of the proposed project, including projected outcomes:
5CHC seeks to continue its highly successful Homeless Prevention program to help families at-risk of homeless remain in their home. A change in this application is that 5CHC seeks to only provide services in South County (Avila to the Santa Barbara County Border). An anticipated 10 households (25 people) will receive assistance. 5CHC's track record has demonstrated that less than 5% of those served in the prior 24 months have fallen into homelessness after receiving assistance, this includes the highly vulnerable Transitional-Age Youth population.

C.5. For proposed projects serving individuals at risk of or experiencing homelessness, upload your organization's HUD Annual Performance Report (APR) or CE APR generated from HMIS for the previous 12-month period. The report should be run for a single project type and correspond to the project type (Emergency Shelter, Street

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Outreach, etc.) for which you are applying. This information will be used by the grant review committee to assess past performance, outcomes, and alignment with funding priorities. Please be sure to not include any Client PII, including Clarity ID, along with the reports. Many review committee members will not be HMIS users.

If your organization does not currently have a project in HMIS, please provide a comparable performance report that includes outcome data and performance metrics relevant to your proposed project type.

For guidance on how to run reports in HMIS, please visit the HMIS Knowledge Base.  HUD Annual Performance Report (APR)
5CHC HP FY24_25 Report.pdf
C.6. What is the level of need for this activity within SLO County? Please include data to support your answer.

It is abundantly documented that stable housing, health and self-sufficiency are the keys to addressing the challenges of homelessness. 5CHC is a community leader in providing these services to residents of San Luis Obispo County who are experiencing homelessness or who are at-risk; however, we are seeing an alarming spike in requests for assistance. According to a 2022 data analysis by Porch, an online home improvement and home-buying advice website, the San Luis Obispo area is the now second least affordable small metro area in the entire United States. It is estimated that rental rates have increased more than 60% in the last decade. The high cost of housing here in San Luis Obispo County is approximately 53% higher than the national average, according to Zillow with the median rental rate having increased $400. The County's most recent Point In Time Count clearly identifies the need for homeless prevention and rapid re-housing services, having identified 1175 individuals as homeless. One of the six policy recommendations made in the UCSF study, California Statewide Study of People Experiencing Homelessness, is to “expand targeted homelessness prevention (e.g., financial support, legal assistance) at service settings (e.g., social service agencies, healthcare settings, domestic violence services, community organizations) for both leaseholders and non-lease holders. Expand prevention and transition services at institutional exits (jails, prisons). Expand and strengthen eviction protections.” More than 80% of participants in this study, who were experiencing homelessness, believed receiving a one-time payment of $5,000-$10,000 would have prevented their homelessness. Those experiencing homelessness who lack rental history, have poor credit, lower income, or criminal history are especially challenged in the current housing market. 5CHC has utilized landlord incentives in prior projects and it has proved to be a vital component to secure housing for this population. 5CHC has assisted 77 individuals re-gain housing, who would not have otherwise been able to secure housing, with the landlord incentive program. Beyond assisting with rental assistance to prevent eviction, 5CHC also puts considerable resources towards utility assistance, car repairs, food assistance, etc. that are often symptomatic of growing financial instability. Without early intervention, these issues can easily compound and lead to increased housing instability and risk of homelessness. For the current year these requests have skyrockets, as several utility assistance programs were cut (both federally and by the State).

C.7. Please upload a timeline for key steps of project implementation.  Timeline *Required
5CHC Milestone Timeline .pdf
C.8. Is this effort new, continuing, or expanding? Please describe.

While this is a continuing program, 5CHC is seeking increased support for homeless prevention services. No new startPage 345 of 451 Printed By: Donna Hawkins on 10/13/2025 10 of 18
up activities are contemplated. 5CHC has been successfully administering its housing navigation programs since 2015.

C.9. Describe how the project will align with a (or multiple) Line(s) of Effort to support the San Luis Obispo Countywide Plan to Address Homelessness (2022-2027).

Fundamentally the plan seeks to house those who are experiencing homelessness, with a special focus on those who are chronically homeless and living unsheltered. The proposed project activities are directly aligned with both of these intents. Notably in Line of Effort 2 and Line of Effort 3 in the plan. Line of Effort 2: This program focuses efforts to reduce or eliminate the barriers to housing stability for those experiencing homelessness or at risk of homelessness, including prevention, diversion, supportive services, and housing navigation efforts by (2A) implementing "housingfocused case management and services across the region;" (2.C) Structuring services based on population need and geographical coverage by coordinating strategies across multiple agencies, and (2.D. subpoints 1-4) preventing “homelessness through expanded diversion efforts (also known as housing problem solving or family reunification) and homeless prevention capacity.” In order to stem the flow of those falling into homelessness in our county, and reach the County’s goal of reducing homelessness by 50%, additional resources are necessary to ensure fewer people enter the homeless services system. Homeless prevention is one of the most cost-effective strategies to reduce the incidence of homelessness in a community. According to the 2023 study by Notre Dame University’s Wilson Sheehan Lab for Economic Opportunities (LEO), in addition to helping individuals and families maintain their housing, the LEO study suggests this community-wide prevention program is cost-effective and yields benefits to the broader community. Researchers estimated that the Homelessness Prevention System produces $2.47 in estimated benefits for every $1 dollar spent on emergency financial assistance. For Line of Effort 3: Improve and expand data management efforts through HMIS and coordinated entry system to strengthen data-driven operational guidance and strategic oversight - 5CHC has expanded its HMIS team to include 2 FTE dedicated to data quality and compliance, in addition to program staff and 5CHC is now utilizing the freshly minted reports out of CLARITY to set performance goals across all 5CHC programs. For Line of Effort 4: Create, identify, and streamline funding and resources. These new HMIS reports are assisting 5CHC to refine its solicitations for funding, quantify our program effectiveness, and identify new revenue sources.

C.10. Select all population(s) expected to be served through this project:
 Adults with children
 Adults without children
 Elderly/Senior
 Parenting Youth
 Persons Experiencing Chronic Homelessness
 Persons At Risk of Homelessness
 Veterans
 Domestic Violence Survivors
 Persons with Disabilities
 Unaccompanied Youth (under 25 years of age)
 Individuals with Co-occurring Disorders (Substance Use and Mental Health)

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 Low – Moderate Income Persons or Households
C.11. How does your program/service complement and collaborate with existing efforts in the County? Describe how the program/project will increase capacity of services/housing for persons experiencing homelessness and atrisk persons in the County. 5CHC Homeless Services program is integrated in the local Continuum of Care (CoC), focusing on collaboration and strategic action. Homeless Prevention strategies are one of the initial efforts provided, throughout the compendium of services. In an effort to build core competencies of service providers within the CoC, 5CHC collaborates with area partners on evidence-based trainings (Housing Navigation, Mental Health First Aid, Trauma-Informed Care, Motivational Interviewing, etc.) 5CHC also has a program of providing staff trainings with other service professionals and partner agencies including weekly technical assistance meetings with CAPSLO's housing navigation team to discuss best practices, as apart of our Homeless Prevention partnership (General Fund contract). Additionally 5CHC is active with the Coordinated Entry Homeless Prevention Workgroup developing standardized assessments and policies. In 2024-25 5CHC provided multiple housing navigation trainings as part of the Supportive Housing Consortium's bi-monthly meetings. 5CHC seeks to streamline services through collaborative work with service providers throughout the County.

C.12. Describe any consultation with local jurisdictions to gain support for the project.

Please see the attached letters of support including those from the Cites of Arroyo Grande, Pismo Beach and Grover Beach; along with others.

C.12a. Please attach any letters of support or commitment from local governments or community partners.  Letters of Support *Required
PB 2025-10-05 5CHC Letter of Support.pdf
Lucia Mar.pdf
5CHC SLO SHC TBRA letter of support Oct 2025 .pdf
GB 5CHC Letter for Homeless Service Application.pdf
Dignity Health Letter 10.25.pdf
HTF 5CHC TBRA letter of support 10.25.pdf
CenCal Health Letter of Support Oct 2025.pdf
5CHC City of Arroyo Grande October 2025.pdf
C.13. Name partner agencies as applicable and describe how they will be participating in the delivery of the proposed activity.

C.14. Indicate the predicted, unduplicated performance outcome listed below:

Population Number of Individuals
Served
Number of Households
Served
Number of unsheltered persons to become sheltered
Number of people experiencing homelessness to be
entering permanent housing
Number of people experiencing Chronic Homelessness
served
Number of persons At-Risk of Homelessness served 25 10

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Number of Unaccompanied Youth served
Number of Youth At-Risk of Homelessness served
Number of persons in families with children served
Total 25 10

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D. Funding & Eligible Activities
Completed by [email protected] on 10/10/2025 2:08 PM Case Id: 30576
Name: Homeless Prevention, South County, 5Cities
Address: Homeless Coalition - 2026 P.O. Box 558, 100 S. 4th Street, Grover Beach, CA 93483
D. Funding & Eligible Activities
Please provide the following information.

D.1. Total Funding Requested
$43,427.00
D.1a. Please upload a Budget & Budget Narrative for the project for which you are applying. The budget narrative should include FTEs to be provided. Please include the value of any matching funding. Project budget must include committed and anticipated funding for total project cost--not just for funding requested in this application.  Budget and Budget Narrative *Required
HP Budget Oct 25.pdf
D.2. Are you requesting CDBG funds?
Yes
D.2a. Amount of CDBG funds requested:
$43,427.00
D.2.b. Please indicate the amount you are requesting for each jurisdiction:

Jurisdiction Amount
Arroyo Grande $9,688.00
Atascadero $0.00
Morro Bay $0.00
Paso Robles $0.00
Pismo Beach $4,513.00
San Luis Obispo $0.00
County $29,226.00
TOTAL $43,427.00
D.2c. Estimated number of unduplicated persons to benefit from CDBG funds:
40 D.2d. Estimated number of unduplicated households to benefit from CDBG funds:
25 D.2.e. Please select the national objective that best applies to the proposed project. Please refer to "Basically CDBG" or the "CDBG Guide to National Objectives and Eligible Activities" for more information regarding CDBG national objectives.

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Low Moderate Income
LOW/MODERATE INCOME: Select which criteria the proposed project intends to qualify under to meet the Low/Moderate Income objective.

Low/Moderate Income Clientele
D.2.f. Identify all eligible activities that apply to the proposed project:
 Public Services -General
 Operating Costs of Homeless/AIDS Patients Programs
 Senior Services
 Handicapped Services
 Legal Services
 Youth Services
 Transportation Services
 Substance Abuse Services
 Services for Battered and Abused Spouses
 Crime Awareness or Neighborhood Cleanups
 Fair Housing Activities
 Tenant/Landlord/Housing Counseling
 Child Care Services
 Health Services
 Services for Abused and Neglected Children
 Mental Health Services
 Job Training and Job Placement Services
 Subsistence Payments, Homeless Assistance, Rental Housing Subsidies or Security Deposits  Assistance to microenterprises (technical assistance, business support services, and other similar services to owners of microenterprises or persons developing microenterprises) D.2g. Explain how the proposed project meets the selected National Objective:

Assistance will be provided to benefit a clientele who are defined by HUD to be principally L/M income persons and facing an imminent threat of homelessness. 5CHC's program requires information on family size and income so that it is evident that at least 51% of the clientele are persons whose family income does not exceed the L/M income limit.

Reference: §570.208(a)(2)(i)(B) and (C).

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D.2h. Will the services offered by your organization increase or expand as a result of CDBG assistance? Yes
D.2i. Explain how your services will increase or expand as a result of CDBG assistance:

Level of services is directly tied to amount of funds invested, resulting in more households served.

D.2j. Describe how the project will directly benefit the populations identified.

Funding will be used to provide short-term rental assistance, coupled with supportive services, to enable low-income families to remain in their home and not fall into homelessness. 5CHC has documented that less than 5% of those served in the last 24 months in this program have fallen into homelessness.

D.3. Are you requesting ESG funds?
No
D.3a. Amount of ESG funds requested:
$0.00
D.3b. Please upload your ESG Policies and Procedures for each activity for which you are applying.  ESG Policies and Procedures *Required
**No files uploaded
D.3.c. Identify all eligible activities and their amounts that apply to the proposed project:

Eligible Activities Amount Approximate Persons Served
Emergency Shelter $0.00 0
Street Outreach $0.00 0
Rapid Re-Housing $0.00 0
Homelessness Prevention $0.00 0
HMIS $0.00 0
TOTAL $0.00 0
D.3.d. ESG Matching Funds (1:1 Match Required)
Funding Source Amount
TOTAL $0.00
D.4. Are you requesting General Fund Support funds?
No
D.4a. Amount of GFS funds requested:
$0.00
D.4b. Identify all eligible activities that apply to the proposed project:

Amount Approximate
Persons Served
Emergency Shelters $0.00 0
Safe Parking $0.00 0
Essential Services for Persons Experiencing Homelessness $0.00 0

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Warming Centers $0.00 0
Street Outreach $0.00 0
Tenant Based Rental Assistance-TBRA $0.00 0
TOTAL $0.00 0

Printed By: Donna Hawkins on 10/13/2025 17 of 18
E. Supplemental Documents
Completed by [email protected] on 10/1/2025 5:37 PM Case Id: 30576
Name: Homeless Prevention, South County, 5Cities
Address: Homeless Coalition - 2026 P.O. Box 558, 100 S. 4th Street, Grover Beach, CA 93483
E. Supplemental Documents
Please note that all documents uploaded into this application must be less than 100 MB in file size. We cannot accept documents via email or through another platform, such as Dropbox or Google Drive. Applicants may split larger documents into multiple smaller files, label them appropriately with “part X of X” and then upload them directly into this application.

Do not upload password-protected documents into this application. All password-protected documents will be removed during threshold review and this may negatively impact scoring of your application.

Documentation
Please upload any other documentation that should be considered during review of your application. Multiple files may be uploaded if needed.
 Supplemental Documentation
Cool, Tuesday HCD - Great Job Email.pdf
Cool, Tuesday HCD - File Completeness Email.pdf
Cool, Tuesday HCD - Metrics Email.pdf

Printed By: Donna Hawkins on 10/13/2025 18 of 18
Submit
Completed by [email protected] on 10/10/2025 2:11 PM Case Id: 30576
Name: Homeless Prevention, South County, 5Cities
Address: Homeless Coalition - 2026 P.O. Box 558, 100 S. 4th Street, Grover Beach, CA 93483
Submit
Please provide the following information.
 The applicant certifies that all information contained in this application, and supporting documentation, given for the purpose of obtaining assistance, is true and complete to the best of the applicant’s knowledge.  I hereby certify that our organization has complied with all applicable laws and regulations pertaining to the application and is an eligible applicant for the requested funding. The organization proposes to provide the program services or complete the project identified in this application. If this application is approved and this organization receives the requested funding this organization agrees to adhere to all relevant Federal, State, and local regulations and other assurances as required by the County.
 I hereby certify that the organization is fully capable of fulfilling its obligation under this application, as stated herein.
 I further certify that the information provided in this Funding Application is correct, accurate, and complete.

In addition, the content of the application shall be incorporated as part of the written agreement and, as such, will be used to monitor performance. Activities, commitments, and representations described in the written agreement that are not subsequently made a part of the program/project as funded shall be considered a material contract failure and may result in a repayment of all awarded funds and/or suspension from participation in future funding rounds.

Authorized Representative Signature
Janna Nichols
Electronically signed by [email protected] on 10/10/2025 2:10 PM Authorized Representative Title
Executive Director

Printed By: Donna Hawkins on 10/13/2025 3 of 21
A. Applicant Information
Completed by [email protected] on 9/23/2025 9:57 AM
Case Id: 30580
Name: Minor Home Repair, Community Action
Partnership of San Luis Obispo County, Inc. -
2026
Address: 3970 Short St., Suite 110, San Luis Obispo, CA 93401--4547
A. Applicant Information
Please provide the following information.

PRIMARY APPLICANT INFORMATION-LEAD AGENCY
A.1. Organization Name
Community Action Partnership of San Luis Obispo County, Inc.

A.2. Type of Organization
Non-Profit
A.2.a. Define Other:

A.3. UEI Number: For more information, visit SAM.GOV
GBL8FWWVCLC5
A.3.a. Please upload proof of active SAM.gov registration for your organization.  Proof of Active SAM.gov Registration *Required
SAM-CAPSLO Registration 2025-2026 screenshot.jpg
A.4. Address
1030 Southwood Dr. San Luis Obispo, CA 93401
A.5. Is the organization faith based?
No
A.6. Date of Incorporation
12/09/1965
A.7. Please upload the following documentation:
 Organizational Chart *Required
CAPSLO Org Chart 1-25.pdf
 Incorporation Documents *Required
25-26 Cert of Liability Insurance.pdf
ATTACHMENT 3

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Articles of Incorporation.pdf
 General Liability Insurance *Required
25-26 Cert of Liability Insurance.pdf
Articles of Incorporation.pdf
A.8. REQUIRED ACKNOWLEDGEMENT OF INSURANCE REQUIREMENTS. Has your organization read and understood the insurance requirements listed in “Example Exhibit D - General Conditions”? Yes
A.9. Annual Operating Budget
$111,548,450.00
A.10. Number of Full-Time Paid Staff
892
A.11. Number of Part-Time Paid Staff
26 A.12. Number of Volunteers
1,334

CONTACT INFORMATION
A.13. Contact Person Name
Jim McNamara
A.13a. Contact Person Title
CAPSLO Energy Director
A.13b. Phone Number
(805) 541-4122
A.13c. Email
[email protected]

FINANCE CONTACT INFORMATION
A.14. Finance Contact Person Name
Joan Limov
A.14a. Finance Contact Person Title
Chief Financial Officer
A.14b. Finance Phone Number

Printed By: Donna Hawkins on 10/13/2025 5 of 21
(805) 544-4355
A.14c. Finance Email
[email protected]

Printed By: Donna Hawkins on 10/13/2025 6 of 21
B. Applicant Capacity
Completed by [email protected] on 10/10/2025 2:36 PM
Case Id: 30580
Name: Minor Home Repair, Community Action
Partnership of San Luis Obispo County, Inc. -
2026
Address: 3970 Short St., Suite 110, San Luis Obispo, CA 93401--4547
B. Applicant Capacity
Please provide the following information.

B.1. Describe your organization’s history of receiving and managing grants from County/State/Federal sources.

Since its inception in 1965, CAPSLO has received and successfully managed a variety of grants that address the unmet needs of low-income and vulnerable individuals and families through County, State, and Federal sources. County grants include but are not limited to CBO/PHG, Departments of CDBG, Social Services (DSS), Public Health, Behavioral Health, Probation, ESG, General Funds, and more recently, Coordinated Entry and PLHA grants. State grants include but are not limited to the Office of Emergency Services, Office of Child Abuse Prevention, Department of Education, Department of Social Services, and Community Services and Development (CSD), which designates the organization as a Community Action Agency because it distributes funds from the Community Services Block Grant (CSBG). Federal - The majority of CAPSLO's funding comes from the Administration for Children and Families, Office of Head Start, which the agency has been receiving since 1965, but also Substance Abuse and Mental Health Services Administration (SAMHSA) and the Department of Veteran Affairs. The Energy Division, the focus of this application, receives funding from CSD for the Low-Income Home Energy Assistance Program (LIHEAP), Department of Energy for the Weatherization Assistance Program (DOE WAP) and Bipartisan Infrastructure Law Weatherization Assistance Program (Bil WAP), the Area Agency on Aging, Santa Barbara County CDBG, City of Pismo Beach, City of Santa Maria, andPG&E.

B.2. Briefly list any recent development projects your organization has proposed, is currently working on, and/or has recently completed (regardless of funding source).

In the past five years, the agency completed 34 Prado as a licensed substance use disorder facility and two Head Start child care centers are nearing completion in Atascadero and Salinas. Energy Services has completed an average of 40 larger home repair projects per year over the past four years.

B.3. Briefly describe your organization’s auditing requirements (as outlined in 2 CFR § 200.500 and 24 CFR § 5.801), including those for the proposed project.

CAPSLO undergoes an agency-wide, rigorous audit process annually by the firm of Brown Armstrong Certified Public Accountants. The process includes inquiry and observation to understand and evaluate CAPSLO’s internal controls, confirmations, interim testing and compliance audits, and substantive procedural analysis. Critical audit areas include compliance with federal and state awards, expenses for program and support services, accounts payable and accrued liabilities, program revenue and unearned deferred revenue, cash, property and equipment, and long-term debt. A summary of the audit is formally presented by Brown Armstrong to both the Audit and Finance Committees of the Board as well as the full Board of Directors and senior management annually.

B.3.a. Please upload your organization's Most Recent Financial Audit.  Most Recent Financial Audit *Required
Audit 2024.pdf

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B.4. Briefly describe your organization’s record keeping system with relevance to the proposed project.

Client and household demographic data is captured, including household income, size, disability status, age, services provided, etc. Appropriate income documentation is required, which includes one of the following: recent pay-stubs, bank statements, income tax returns, or proof of participation in an approved alternative low-income program (provided the income thresholds are equal to or lower than the HUD identified income levels). All copies of client household data are kept in client files, and recorded in Hancock Software, the Energy Service's program database, and in CAPSLO's agency-wide database, ClientTrack. The agency will be transitioning from ClientTrack to WIPFLI starting October 1; full backup of client data is ensured.

B.5. Describe how your organization will document and maintain income status of each beneficiary in compliance with regulations?
Energy Services will collect income documentation from all household members and documentation of home ownership as part of the enrollment process for each beneficiary. All documents will be kept in client files along with completed applications.

B.6. Describe your project staff’s experience and capacity to comply with Section 3 requirements (as outlined in 24 CFR Part 75).

The Energy Services Director is responsible for all areas of the Weatherization, Utility Assistance, and Home Repair programs, including staff supervision; budgeting and financial management; program administration; achievement of each program's goals and objectives; marketing and promotion; research and new program development; technical support and construction management; quality control; and continuous program improvement in San Luis Obispo, Monterey, Santa Cruz, and northern Santa Barbara counties. Under the supervision of the Program Director, three Crew Supervisors oversee all construction and home repair work, monitor quality, and ensure compliance with program standards and building codes. Energy Outreach Specialists conduct site visits, interview clients, complete intake applications, collect income documentation and proof of home ownership, and conduct pre-assessments for the home repair projects. Administrative staff, including Program Specialists and Finance Specialists, organize client files, process building permit applications, schedule work and prepare invoices and reports. Under supervision of the Crew Supervisor, Installers and Technicians inspect homes to determine materials needed and repairs to be made; install weatherization measures and perform home repairs on designated homes for funded programs; and maintain accurate records of work performed and materials used on the job. Repairs are carried out by CAPSLO staff who work under the company's contractor's license (#623259). The Program Director, along with administrative and field staff, average over 20 years of experience in all aspects of the program. They participate in annual training and updates with SLO County Adult Protective Services staff.

B.7. If the County allocated funds to your organization in previous years, do any of those funds remain unspent? Yes
B.7.a. Please provide the following information:

Project Name Funding Source and Year Remaining Amount
Minor Home Repair County of San Luis Obispo 2025 $64,550.00 Minor Home Repair City of Pismo Beach $18,600.00
We have projects lined up and are
working on them daily.
$0.00
$83,150.00
B.8. Does your organization comply with the Generally Accepted Accounting Principles as outlined in 2 CFR § 200? Yes

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Printed By: Donna Hawkins on 10/13/2025 9 of 21
C. Proposed Project & Project
Details
Completed by [email protected] on 10/10/2025 2:55 PM
Case Id: 30580
Name: Minor Home Repair, Community Action
Partnership of San Luis Obispo County, Inc. -
2026
Address: 3970 Short St., Suite 110, San Luis Obispo, CA 93401--4547
C. Proposed Project & Project Details
Please provide the following information.

C.1. Name of Proposed Project
Minor Home Repair
C.2. What is the estimated total project completion cost? $675,266.00
C.3. Project/Program Address(es)
3970 Short St., Suite 110 San Luis Obispo, CA 93401--4547 C.4. Accessor's Parcel Number(s).

There will be separate Accessor's Parcel Numbers for each home repair project. These will be collected at the time of client intake and enrollment.

C.5. Areas Served-Select all that apply
 City of Arroyo Grande
 City of Atascadero
 City of Morro Bay
 City of Paso Robles
 City of Pismo Beach
 City of San Luis Obispo
 City of Grover Beach - Not eligible for CDBG or HOME
 Unincorporated Community
Name of Unincorporated Community:
 Countywide
C.6. Will the project require any acquisitions?
No

Printed By: Donna Hawkins on 10/13/2025 10 of 21
C.6.a. Please upload the following documentation:
 Appraisal of Property *Required
**No files uploaded
C.6.b. What is the proposed purchase amount?
$0.00
C.6.c. What is the anticipated escrow closing date?
C.7. Will the current owner, residential occupants, and/or commercial occupants be displaced by the project? No
C.7.a. Please upload the following documentation:
 Relocation Plan or Certified Tenant Notifications *Required **No files uploaded
C.7.b. Will the displacement be temporary or permanent? C.7.c. How long will the displacement last?
C.7.d. Describe how the relocation costs will be paid. Include these costs in your Sources and Uses document.

C.8. Provide a complete description of the proposed project and proposed outcomes:

The project involves the completion of minor home repairs and accessibility improvements in homes occupied by lowand very low-income members of the community. The agency will perform outreach and work with its partners to identify households that qualify for this assistance and have needs that can be met through the program. Once projects are identified, the program will develop a project description and cost estimate for each project and submit that information to County staff for review and approval. Approved projects will then be scheduled for work to be completed by agency staff. The outcome is to help vulnerable members of our community remain safely in their own homes, improving their self-sufficiency and independence and thereby reducing homelessness and dependency.

C.8.a. Number and Unit Type (size) of Proposed Units Created and/or Rehabilitated:

Unit Type (Size) Created Units Rehabbed Units
Single-family homes 0 35
Manufactured homes 25
C.8.b. Of the total number of new units created, how many will be deed-restricted? 0 C.9. Please upload a timeline for key steps of project implementation. Include key steps or phases of project implementation such as, but not limited to, the following: predevelopment, financing, use permitting, construction

Printed By: Donna Hawkins on 10/13/2025 11 of 21
permitting, demolition, grading, construction finance close, construction milestones, placed in service date, permanent loan conversion, etc.
 Timeline *Required
C9 Timeline for key steps of project implementation.pdf C.10. Please upload a complete set of drawing/plans. Also include any maps or photos available.  Maps, Photos, Drawings, Plans *Required
Minor Home Repair does not possess any maps.pdf
C.11. Please upload the Most Recent Market Study for the project. The market study is required for HOME funding.

It is not required but is recommended for all other funding.  Most Recent Market Study
**No files uploaded
C.12. Describe site and neighborhood standards including proximity to services, transportation, and employment:

This will vary. The program will involve completing projects on homes located throughout the County of San Luis Obispo and cities identified.

C.13. Describe in detail the current zoning designation of the project site.

N/A
C.14. Describe in detail the current land use of the project site.

N/A
C.15. Explain how the site’s current land use and zoning designation are, or are not, consistent with the proposed project.

N/A
C.16. Provide an explanation of efforts and a timetable to obtain the necessary jurisdictional amendments to bring forth the project.

N/A
C.17. Have necessary Land Use Permits and/or Construction Building Permits been issued? No
C.17a. If yes, what is their current expiration date(s)? C.17b. If no, indicate when the permit(s) will be applied for or issued:

We will obtain construction building permits when and if they are needed.

C.18. Describe how the project will align with a Line of Effort (or multiple Lines of Effort) to support the San Luis

Printed By: Donna Hawkins on 10/13/2025 12 of 21
Obispo Countywide Plan to Address Homelessness (2022-2027).

Minor Home Repair aligns best with the county's "Line of Effort 2: Focus efforts to reduce or eliminate the barriers to housing stability for those experiencing homelessness or at risk of homelessness, including prevention, diversion, supportive services, and housing navigation efforts." This project is a supportive service for one of the county's identified beneficiary groups -- older adults/medically fragile. Minor Home Repair keeps this population safely housed and helps prevent homelessness by amending substandard housing and accessibility issues.

C.19. Select all population(s) expected to be served through this project and include number of units expected for each chosen population:
 Low-/moderate-income households
Expected number of units:
60  Multifamily
Expected number of units:
 Age Restricted (including seniors)
Expected number of units:
 Persons Experiencing Homelessness
Expected number of units:
 Persons with Disabilities
Expected number of units:
45  Person Experiencing Chronic Homelessness
Expected number of units:
 Farmworkers
Expected number of units:
5  Veterans
Expected number of units:
10

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 Domestic Violence Survivors
Expected number of units:
 Unaccompanied Youth (under 25 years of age)
Expected number of units:

C.20. Has your organization previously received a grant to serve any of the populations expected to be served?? Yes
C.20a. Provide a brief description of those grant activities and the outcomes you achieved:

Since 1980, we have received multiple federal, state and local grants to serve the populations expected to be served.

These include Low-Income Home Energy Assistance Program (LIHEAP), Department of Energy Weatherization Assistance Program (DOE WAP), Area Agency on Aging Senior Home Repair Program, and CDBG Home Repair Programs with San Luis Obispo and Santa Barbara counties as well as local municipalities. LIHEAP and DOE WAP support the weatherization of over 250 homes per year on average, providing diagnostic testing (blower door test, duct system testing and sealing, combustion appliance safety testing, replacement of furnaces, water heaters and cooking appliances, installation of weathering measures like attic insulation, door weatherstripping, windows, water saving measures, and carbon monoxide and smoke alarms. Energy Services completes minor repairs, like the installation of grab bars and handrails, for approximately 500 households per year in our Senior Home Repair Program, funded by the Area Agency on Aging. Energy Services completes from 40 to 100 larger Home Repair projects with the CDBG-funded Minor Home Repair Program, which covers San Luis Obispo and Northern Santa Barbara counties.

C.21. Please name partner agencies as applicable and describe how they will participate in the delivery of the proposed project:

Minor Home Repair and other programs targeted at seniors, the disabled, and lower income households benefit from mutual referral of clients for services. Clients are referred to CAPSLO for home repair services by service providers, such as the Department of Social Services’ (DSS) Adult Protective Services, the Social Security Administration, the Area Agency on Aging, in-home health service providers, food service providers (food pantries, Meals That Connect, Senior Nutrition), and other senior services. This program, along with County senior-serving programs, cross-refer to one another when additional support services are identified. Programs work together to ensure the safety and independence of San Luis Obispo County seniors. This program has consistently been supported by local jurisdictions, evidenced by the many years of CDBG funding received by both SLO County, City of Pismo Beach, City of Santa Maria and, more recently, County of Santa Barbara.

C.22. Does the proposed project have support from the community? Yes
C.22a. Please upload any letters of support or commitment from local governments or community partners.  Letters of Support
Letter of Support for Minor Home Repair Program in Morro Bay - 2026 CDBG Funding.pdf

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C.23. Has an environmental review been completed, CEQA and/or NEPA?  Yes - CEQA Review Complete
 No - CEQA Review Not Complete
 Yes - NEPA Review Complete
 No - NEPA Review Not Complete
 Yes - Both Have Been Completed
 No - Neither Have Been Completed
C.24. Has a Phase I or Phase II environmental assessment been conducted for the property? No
C.24a. Please upload the following documentation:
 Environmental Assessment, Phase I or II *Required
**No files uploaded
C.25. Has a Phase I or Phase II archeological/historical survey been conducted at the project site? No
C.25a. Please upload the following documentation:
 Archeological/Historical Survey, Phase I or II *Required **No files uploaded
C.26. List and describe any known hazards-e.g., asbestos, radon, lead-based paint, storage tanks – aboveground, underground. Please enter “N/A” if not applicable.

Lead-based paint may be present in homes built prior to 1978. CAPSLO is an EPA-certified contractor and field staff have completed applicable training in lead-safe work practices.

C.27. Is the project on a property designated or been determined to be potentially eligible for designation as a local, state, or national historical site?
No
C.28. Are the building(s)/structure(s) located on a historic site or within a local historic district? No
C.29. Is the project located within a 100-year and/or 500-year flood zone? Yes
C.29a. How will the project mitigate potential flooding on the site? There will be multiple projects, some of which may be located within designated flood zones, which will be addressed in the environmental review process for each project.

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C.29b. Does your organization have flood insurance for the project site? No
C.30. Will demolition be required?
No
C.31. Are there any existing buildings on the project property that were constructed prior to 1978? Yes
C.31a. Has an asbestos risk assessment report(s) been prepared for the building(s)? No
C.31b. Has the building(s) been abated for asbestos?
No
C.31c. Has a lead hazard risk assessment report(s) been prepared for the building(s)? No
C.31d. Has the building(s) been abated for lead paint?
No
C.31e. Will children occupy the building(s)?
Yes
C.31f. Indicate the age range of the children that will occupy the building:
0-18

Printed By: Donna Hawkins on 10/13/2025 16 of 21
D. Funding & Eligible Activities
Completed by [email protected] on 10/10/2025 2:56 PM
Case Id: 30580
Name: Minor Home Repair, Community Action
Partnership of San Luis Obispo County, Inc. -
2026
Address: 3970 Short St., Suite 110, San Luis Obispo, CA 93401--4547
D. Funding & Eligible Activities
Please provide the following information.

D.1. Total Project Funding (include all Sources and Uses of funding) $675,266.00
D.1.a. Please upload a Sources & Uses document for your proposed project:
 Sources and Uses *Required
Minor Home Repair Funding Sources and CDBG Allocation.pdf D.1.b. Please upload all Commitment Letters for Funds. Required to demonstrate the 25% HOME matching funds; not required but recommended for all other funding requests.  Commitment Letters for Funds *Required
Letter of Support for Minor Home Repair Program in Morro Bay - 2026 CDBG Funding.pdf D.1.c. How do you plan to fund the operation and maintenance costs (if any) associated with this project? Are these funds available now? If not, when will they be available? There are no maintenance costs associated with this project. The work involves providing home modifications on individual homes. Regarding D.1.a, Sources and Uses, a program breakout of funding sources and CDBG requests is attached.

D.1.d. Please upload the 20-Year Pro Forma for the project to demonstrate continued viability and affordability of the project for at least 20 years.
 Pro Forma (20-year) *Required
Pro Forma form.docx
D.2. Are you requesting HOME funds?
No
D.2.a. Amount of HOME funds requested:
$0.00
D.2.b. Proposed number of HOME-assisted (deed-restricted) units:

Printed By: Donna Hawkins on 10/13/2025 17 of 21
D.2.c. HOME Matching Funds:

Sources Amount
$0.00
D.2.d. Identify all eligible activities that apply to the proposed project:
 Acquisition
 Rehabilitation
 Relocation
 Demolition
 Site Preparation
 New Construction
 Multi-Family
 Single Family
D.2.e. Please indicate the number and type of all units CREATED Unit Type 30% AMI 31 to 50% AMI 51 to 80% AMI Unrestricted Resident
Manager
81% and higher
AMI
Total 0 0 0 0 0
D.2.f. Is your project for REHABILITATION of existing units only? Please indicate the number and type of all EXISTING Units:

Unit Type 30% AMI 31 to 50% AMI 51 to 80% AMI Unrestricted Resident
Manager
81% and higher
AMI
Total 0 0 0 0 0
Please indicate the number and type of all units AFTER rehabilitation Unit Type 30% AMI 31 to 50% AMI 51 to 80% AMI Unrestricted Resident
Manager
81% and higher
AMI
Total 0 0 0 0 0
D.3. Are you requesting CDBG funds?
Yes
D.3.a. Amount of CDBG funds requested:

Printed By: Donna Hawkins on 10/13/2025 18 of 21
$545,626.00
D.3.b. Identify all eligible activities that apply to the proposed project:
 Acquisitions
 Rehabilitation
 Demolition
 Clearance and Site Preparation - In anticipation of a HOME funded project D.3.c. Are at least 51% of the units in the project designated as low-/moderate-income units? Yes
D.3.d. How many new deed-restricted units will be constructed with CDBG funds? 0 D.3.e. Estimated number of unduplicated households to benefit from CDBG funds:

Beneficiary Type Estimated Number
Unduplicated Households 60
D.3.f. Please select the national objective that best applies to the proposed project.

Please refer to "Basically CDBG" or the "CDBG Guide to National Objectives and Eligible Activities" for more information regarding CDBG national objectives.

Low Moderate Income
LOW/MODERATE INCOME: Select which criteria the proposed project intends to qualify under to meet the Low/Moderate Income objective.

Housing
SLUM OR BLIGHT: Select which criteria the proposed project intends to qualify under to meet the Slums or Blight objective
D.3.g. Explain how the proposed project meets the selected National Objective:

Minor Home Repair provides disabled, elderly, or low-income individuals and families who do not have sufficient resources to make necessary safety- and access-related repairs and/or improvements to their homes. Home repairs include installation of health and safety devices, grab bars, handrails, smoke alarms, carbon monoxide detectors, handheld showerheads, minor plumbing, carpentry, electrical, and drywall. Accessibility-related repairs include widening of entryways and hallways, ramps, wheelchairs lifts, or other larger improvements that are needed to allow access to, from, and inside the home. These critical services allow individuals to remain in their home and avoid costly institutionalization. When screening clients in need, several factors are considered, including health and safety, disability, economic need, and age. In 2023, there were 80,448 persons over age 60; the median age was 70. The county has a larger proportion of seniors over 65 at nearly 22% than the state at 15% or nation at 17%; this has significant repercussions on the county’s economy, housing, and health care systems. Among those over 60, 7.6% (5,987) were below the 100% federal poverty level in 2023. Among those 65 and over, 6.8% (4,067) of the county’s population were in poverty. This does not include seniors under the 200% poverty level. Among those over 60 in the

Printed By: Donna Hawkins on 10/13/2025 19 of 21
county, 26.7% had a disability.

D.3.h. REQUIRED ACKNOWLEDGEMENT FOR FEDERAL GRANTS OR CONTRACTS. Does your organization certify that, if awarded funds, it will comply with the requirements as shown as “Example Exhibit D - General Conditions” and “Example Exhibit E - Special Conditions”.

Yes

Printed By: Donna Hawkins on 10/13/2025 20 of 21
E. Supplemental Documents
Completed by [email protected] on 10/10/2025 2:26 PM
Case Id: 30580
Name: Minor Home Repair, Community Action
Partnership of San Luis Obispo County, Inc. -
2026
Address: 3970 Short St., Suite 110, San Luis Obispo, CA 93401--4547
E. Supplemental Documents
Please note that all documents uploaded into this application must be less than 100 MB in file size. We cannot accept documents via email or through another platform, such as Dropbox or Google Drive. Applicants may split larger documents into multiple smaller files, label them appropriately with “part X of X” and then upload them directly into this application.

Do not upload password-protected documents into this application. All password-protected documents will be removed during threshold review and this may negatively impact scoring of your application.

Documentation
Please upload any other documentation that should be considered during review of your application. Multiple files may be uploaded if needed.
 Supplemental Information
EPA Letter of Approval Certification.pdf
EPA ApprovalCertificate_NAT-33515-4.pdf
Bureau of Household Goods & Services - CAPSLO License.pdf CSLB LIcense - CAPSLO.pdf

Printed By: Donna Hawkins on 10/13/2025 21 of 21
Submit
Completed by [email protected] on 10/10/2025 2:57 PM
Case Id: 30580
Name: Minor Home Repair, Community Action
Partnership of San Luis Obispo County, Inc. -
2026
Address: 3970 Short St., Suite 110, San Luis Obispo, CA 93401--4547
Submit
Please provide the following information.
 The applicant certifies that all information contained in this application, and supporting documentation, given for the purpose of obtaining assistance, is true and complete to the best of the applicant’s knowledge.  I hereby certify that our organization has complied with all applicable laws and regulations pertaining to the application and is an eligible applicant for the requested funding. The organization proposes to provide the program services or complete the project identified in this application. If this application is approved and this organization receives the requested funding this organization agrees to adhere to all relevant Federal, State, and local regulations and other assurances as required by the County.
 I hereby certify that the organization is fully capable of fulfilling its obligation under this application, as stated herein.
 I further certify that the information provided in this Funding Application is correct, accurate, and complete.

In addition, the content of the application shall be incorporated as part of the written agreement and, as such, will be used to monitor performance. Activities, commitments, and representations described in the written agreement that are not subsequently made a part of the program/project as funded shall be considered a material contract failure and may result in a repayment of all awarded funds and/or suspension from participation in future funding rounds.

Authorized Representative Signature
Elizabeth "Biz" Steinberg
Electronically signed by [email protected] on 10/10/2025 2:57 PM Authorized Representative Title
Chief Executive Officer

Item 11.a.

MEMORANDUM
TO: City Council
FROM: Matthew Downing, City Manager
BY: Brian Pedrotti, Director of Community Development
Dave Culver, Chief of Police
Nicole Valentine, Director of Administrative Services
Aleah Bergam, Management Analyst
SUBJECT: Study Session on Cannabis Regulation Policy Direction DATE: December 9, 2025
RECOMMENDATION:
1) Conduct a study session and direct staff to:
a) Proceed with the preparation of a local cannabis tax ballot measure (and draft tax language) to be placed on a future municipal ballot, for consideration at a future City Council meeting; and
b) Upon passing of a tax ballot measure, proceed with drafting regulations to allow commercial retail cannabis uses and return with zoning, permit process and a draft ordinance; and
2) Find that providing direction to staff to proceed to draft regulations to allow specified commercial cannabis uses and preparing a local cannabis tax measure is not a project subject to the California Environmental Quality Act (“CEQA”) because it has no potential to result in either a direct, or reasonably foreseeable indirect, physical change in the environment. (State CEQA Guidelines, §§ 15060, subd. (c)(2)-(3), 15378).

IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

This item is identified on the Council Goals Workplan for Fiscal Years 2025-27. There is no fiscal impact resulting from the discussion of these issues. However, the City did contract with HdL Companies to prepare a Market Retail Analysis report provided as Attachment 1. There were sufficient funds in the City Manager's Office Contract Services account to fund the study.

If the City determines to allow some type of cannabis businesses in the City, a fee schedule should be established for cost recovery of staff time needed to process applications and administer any related program. Revenues from taxing commercial cannabis activities will depend on the percentage of tax approved by voters and

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established by the City Council, but would be estimated at approximately $460,000 with a 6% City tax.

BACKGROUND:

California State Law
On November 5, 1996, California voters passed Proposition 215, also known as the Compassionate Use Act. This landmark initiative permitted the medical use of cannabis, making California the first state to legalize cannabis for medical purposes.

On November 8, 2016, voters approved Proposition 64, the Control, Regulate, and Tax Adult Use of Marijuana Act (AUMA). This measure legalized the possession and recreational use of cannabis for adults aged 21 and over. While most personal-use provisions took effect immediately on November 9, 2016, the commercial licensing aspects became effective January 1, 2018.

On June 27, 2017, Governor Jerry Brown signed Senate Bill 94, merging previous medical and recreational cannabis regulations into a single framework known as the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA). This legislation repealed the earlier Medical Cannabis Regulation and Safety Act (MCRSA) and consolidated key provisions under AUMA, creating a unified regulatory structure codified in the California Business and Professions Code. MAUCRSA’s general provisions under Business and Professions Code Section 26000, et seq., establish the Department of Cannabis Control (DCC) as the primary state agency for licensing and regulation, emphasizing public safety, environmental protection, and equity, including mandatory track-and-trace systems (Bus. & Prof. Code, § 26067-26068) using unique identifiers for all commercial cannabis.

A central tenet of MAUCRSA is the preservation of local control. Under Section 26200 of the Business and Professions Code, cities and counties maintain the authority to prohibit or regulate commercial cannabis businesses within their jurisdictions. The state cannot approve a cannabis business license if it conflicts with local ordinances. However, jurisdictions are prohibited from banning the delivery of cannabis from licensed businesses located outside their boundaries.

The regulatory structure established by MAUCRSA governs every aspect of the legal cannabis supply chain—including cultivation, manufacturing, testing, distribution, and retail—whether for medicinal or adult use. This includes Business and Professions Code Chapter 3 (Licensing), detailing over 20 license types (e.g., Type 1-5 for cultivation by size, Type 6-7 for manufacturing, Type 8 for testing, Type 9 for non-storefront retail/delivery, Type 10 for storefront retail, Type 11 for distribution, Type 12 for microbusiness, Type 13 for distributor transport-only, Type 14 for event organizers), requiring background checks, financial disclosures, and compliance with labor laws (e.g., fair wages, worker safety under Labor Code). License requirements under Business and Professions Code Sections 26050-26055 mandate applicants to demonstrate compliance

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with local laws, provide security plans, and adhere to environmental standards, including water usage reporting to the State Water Resources Control Board and energy efficiency mandates to reduce greenhouse gas emissions. Additionally, Business and Professions Code Sections 26130-26140 govern quality assurance and testing, requiring all cannabis products to be tested by licensed labs for potency, contaminants (e.g., pesticides, heavy metals), and accurate labeling, with non-compliance potentially resulting in recalls or license revocation. Initially, regulation was distributed among multiple state agencies, but in 2021, enforcement and oversight were consolidated under a single agency: the DCC.

The DCC is responsible for licensing businesses, ensuring regulatory compliance, promoting public health and safety, and reducing illegal cannabis activity through education, enforcement, and support for local jurisdictions.

In September 2025, Governor Gavin Newsom signed AB 564, that reverses a 25% tax increase on California’s legal cannabis industry and sets the state’s cannabis excise tax rate at 15% until 2028, allowing legal businesses to remain competitive and promoting the industry’s long-term growth. Under Revenue and Taxation Code Section 34010, et seq., this aligns with the existing cannabis tax structure, imposing a 15% excise tax on all cannabis sales (adjusted by AB 564 to remain at 15% until June 30, 2028), with the cultivation tax eliminated in 2022, and exempting medical sales from state sales/use tax but subject to excise. Environmental and health regulations further require commercial operations to comply with the California Environmental Quality Act (CEQA), waste discharge requirements, and pesticide use restrictions (Food and Agricultural Code), while Health and Safety Code Section 11362.3 prohibits cannabis use in workplaces or where tobacco smoking is banned. These provisions ensure state oversight complements local control to emphasize safety, equity, and sustainability.

Arroyo Grande Municipal Code (AGMC)
The City Council adopted Ordinance No. 675 in January 2016, which added Chapter

16.62 to Title 16 of the AGMC. This prohibited medical cannabis dispensaries, cooperatives, and collectives, deliveries of medical cannabis, and the cultivation of cannabis within the City.

The City Council subsequently determined that it was appropriate to allow limited cultivation and strictly regulated deliveries of medical marijuana, and on June 28, 2016, adopted Ordinance No. 678, amending AGMC Chapter 16.62 to allow limited indoor cultivation of medical marijuana and adding Chapter 5.95 relating to delivery services.

On November 9, 2016, the AUMA, also known as Proposition 64, became effective, authorizing certain personal use and cultivation of marijuana at a private residence and creating a state licensing and regulatory scheme for various commercial marijuana activities and on October 10, 2017, City Council adopted Ordinance No. 687 to amend and clarify the provisions in the AGMC relating to marijuana (cannabis) in order to continue to prohibit all commercial cannabis activity within the City, except for limited

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delivery as permitted by then-existing Chapter 5.95, to ban outdoor cannabis cultivation, and reasonably regulate indoor cannabis cultivation.

In December 2017 and June 2018, the State implemented a new comprehensive licensing and regulatory system for cannabis based upon emergency regulations adopted in December 2017 and June 2018, including the adoption of regulations requiring background checks of licensees, requirements related to premises, testing and quality control of cannabis, a “track and trace” system for all commercial cannabis activity, and procedures relating to delivery. In response, the City Council adopted Ordinance No. 694 on August 14, 2018, repealing Chapter 5.95 of the AGMC relating to the local regulation of cannabis delivery services and modifying Chapter 16.62 (Attachment 2) to remove references to the City’s permitting requirements, specify that deliveries require State permitting, and clarify that deliveries must originate from outside of the City.

Council Goals Workplan
In the current Council Goals workplan for Fiscal Year 2025-27, under the Council Goal of “Pursue New Revenue Sources”, Council has directed staff to Consider Cannabis as a Means of Economic Development, with the subtasks as listed below:

1.2a Evaluate cannabis operations that bring in revenue

1.2b Conduct study session with the City Council regarding potential cannabis ordinance

1.2c Conduct study session with the City Council regarding potential cannabis development agreement

1.2d Prepare and adopt cannabis ordinance, if directed by the City Council

1.2e Evaluate feasibility of Cannabis Tax, if directed
ANALYSIS OF ISSUES:

Status of the Industry in California and the Central Coast In California, the retail cannabis industry is in a state of flux, marked by financial struggles for legal businesses, intense competition from a thriving illicit market, and shifting tax policies. While the legal market continues to grow in terms of production and units sold, sales revenue is declining, leading to consolidation and business failures.

Declining sales and falling prices
 Lowest quarterly sales: The first quarter of 2025 saw California's lowest quarterly legal cannabis sales in five years, down 30% from the market's peak in early 2021 (Attachment 3).
 Lower prices, not volume: Despite an increase in the number of units sold, total sales revenue has decreased, indicating that consumers are purchasing cheaper products.
 Michigan surpasses California: California's once-dominant position as the largest legal market is being challenged. In 2024, Michigan sold more cannabis products per month than California.

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The dominant illicit market
 Outselling legal products: The black market for cannabis continues to outsell the legal market by a significant margin. The March 2025 report (Attachment 3) estimated that unlicensed cannabis sales accounted for 60% of consumption in California in 2024.
 High prices for legal goods: High taxes, fees, limited availability, and compliance costs in the legal market drive up consumer prices, making illicit products more attractive. For example, in Los Angeles, which has a 10% tax rate, illegal shops are thriving while legal businesses struggle to compete.  Enforcement has limited effect: While the state's Unified Cannabis Enforcement Task Force has seized hundreds of millions in unlicensed cannabis, it only represents a small fraction of the total illegal production.

Taxes and fees
 State Tax: In September 2025, Governor Gavin Newsom signed, AB 564, that reverses a 25% tax increase on California’s legal cannabis industry and sets the state’s cannabis excise tax rate at 15% until 2028, allowing legal businesses to remain competitive and promoting the industry’s long-term growth.  Local taxes: Some of the largest retail markets in the state, such as Los Angeles and San Jose, have local tax rates as high as 10%. San Luis Obispo has a 6% tax rate, Morro Bay and Grover Beach are 5%.

Regulatory and market challenges
 Business failures and consolidation: The challenging market conditions have led to widespread business failures and consolidation, with thousands of licensed companies going out of business.
 Limited retail access: Many cities and counties still prohibit cannabis businesses, creating a patchwork of access for consumers and potentially encouraging the black market.
 Regulatory maze: Complex and continuously evolving regulations, along with federal prohibition, create hurdles for business owners seeking capital, locations, and stable operations.

The market is still resilient
 Recent policy changes: The state eliminated the cultivation tax in 2022 and shifted the excise tax collection point to retailers, an effort to simplify administration.  Support for social equity: State initiatives are aimed at lowering barriers to entry for new business, including fee waivers and deferrals.
 Some businesses succeed: Despite the overall trend, some businesses are adapting and surviving by focusing on consolidation and competitive pricing. Some craft cannabis dispensaries have even expanded.

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 Licensed market still growing: In 2024, licensed cannabis production and units sold increased despite the decrease in overall revenue, suggesting the legal market is still expanding in terms of volume.

Crime and Security plans
Staff spoke with police department staff from Morro Bay, San Luis Obispo, and Grover Beach. None of those cities reported any issues associated with significant changes in criminal activity due to the presence of cannabis retail storefronts. All of those cities noted that the high level of security required for each storefront is a good deterrent to criminal issues and is an important design requirement. All the cities interviewed require that retailers provide and maintain a comprehensive security plan that includes cameras, onsite security, ID checks, and secure areas where product deliveries occur. These secure areas typically include a fenced carport or vehicle garage that is attached to each retailer where deliveries are handled.

The City could adopt a set of requirements for crime prevention in a proposed cannabis ordinance. There is also an opportunity in the permitting process to add or enhance security provisions, and each store would need to submit a security plan to the City's satisfaction.

Neighboring Jurisdictions Cannabis Tax Revenue History
Table 1: Cannabis Tax Revenue by Jurisdiction*
FY 2021 FY 2022 FY 2023 FY 2024 FY 2025
Paso Robles 5,860 16,600 30,297 66,647 70,261
San Luis Obispo - 998,874 1,127,74
4 1,116,49
5 1,000,000
Grover Beach 2,424,9
14 1,515,59
0 1,198,03
7 1,066,48
9 1,070,000
Morro Bay 220,000 512,944 502,149 469,133 448,678
*estimates/budgeted
Paso Robles is the only jurisdiction receiving revenue from cannabis delivery companies operating in the City. Morro Bay, San Luis Obispo, and Grover Beach allow a variety of commercial license types, including retail. San Luis Obispo and Grover Beach have seen year-over-year declines in overall tax revenue. San Luis Obispo has two storefronts and averages $1 million per year in tax revenue. Grover Beach has four storefronts and averages around $1 million per year in tax revenue. Morro Bay has two storefronts and averages around $500,000 per year.

Regulatory Options for Consideration
As a first step, the City Council should determine whether it wants to allow commercial cannabis businesses, and if so, how it wants to regulate commercial cannabis businesses.

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The City Council could allow all or some of the cannabis business types recognized under state law and regulations (i.e., cultivators, manufacturers, testing laboratories, retailers, distributors, microbusinesses, cannabis event organizers, and processors). To aid the discussion at this initial meeting, staff recommends that the City Council first provide direction on the following topics:

1. Allow or not Allow Cannabis Businesses. Does the City want to allow cannabis businesses? Furthermore, does the City want to allow only medical cannabis businesses, or both medical and adult use cannabis businesses?

2. Types of Cannabis Businesses to Allow. Which types of cannabis businesses does the City want to allow? Under state law, cannabis businesses are required to apply for specific licenses based on their operations. The City may allow any, all or none of these types to operate within the City and City authorization is required before a state license can be issued; however, it should be noted that cannabis delivery emanating from legal sources outside the City and transporting cannabis to citizens within the City is currently allowed under state law and occurring, although the legality of this state authorization has been challenged in court by certain cities and counties. Prop 64 allows local jurisdictions to ban delivery; however, the state has adopted a regulation allowing a licensed delivery operation to deliver anywhere, even in jurisdictions that ban it.

The main license types are:

Storefront Retail (Dispensary)
License
Retail cannabis businesses are
authorized to sell cannabis and
cannabis products directly to
consumers.

Cultivation License
Businesses with a cultivation license
are authorized to grow cannabis for
distribution.

Manufacturing License
Cannabis manufacturers produce
infused products, edibles,
concentrates, and extracts.

Distribution License
These businesses transport cannabis
products from growers or
manufacturers to retailers.

Non-Storefront Retail (Delivery)
License
Delivery services that transport
cannabis products directly to
consumers
Testing License
Testing labs are licensed to test
cannabis products for potency,
contaminants, and compliance with
safety standards.

Cannabis Event Organizer License
Organizers can host licensed events
where people sell and consume
cannabis.

Microbusiness
Businesses that do at least three of the
following activities at one location
(cultivation, manufacturing, distribution

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or distribution transport-only, retail –
storefront or non-storefront
The City can choose to authorize one or more of the above-mentioned license types. For example, Grover Beach’s regulations allow retail, distribution, manufacturing, testing laboratory, cultivation, nursery, microbusiness, and mobile deliveries. Each category carries different land‑ use impacts and regulatory needs, so the Council must decide which activities it wants to attract.

3. Location and Zoning. What type of restrictions should apply to cannabis land uses? Zoning is a critical aspect of ensuring cannabis businesses are appropriately situated within the community. Based on the City of Arroyo Grande’s relatively limited size, available land area, and limited zoning types, some of these uses may not be practical or possible. The following zoning considerations are proposed based on license types:

Storefront Retail (Dispensary)
Retail dispensaries should be located
in commercial or mixed-use districts,
away from schools, parks, and
residential neighborhoods.

Cultivation
Cultivation businesses are best suited
for industrial or agricultural zoning
districts.

Manufacturing
Manufacturing facilities should be
located in industrial zones, particularly
areas with access to transportation
infrastructure for distribution.

Distribution
Distribution businesses are typically
located in industrial or commercial
zones with good access to
transportation networks.

Non-Storefront Retail (Delivery)
Delivery operations can function within
commercial or industrial zones and
should have clear routes for
transportation.

Testing
Testing facilities can be located in
commercial or industrial zones as they
generally have minimal impact on
surrounding areas.

Cannabis Events
Cannabis events can be held in
industrial, commercial, or mixed-use
districts, away from schools, parks, and
residential neighborhoods.

The City could also establish a cannabis overlay zone, separation requirements to avoid clustering of cannabis land uses or proximity to schools, parks, or residential uses and security and operating requirements (e.g., the use of licensed security guards, designated hours of operation, prohibition against on-site consumption, installation of adequate odor control devices and ventilation systems, and limitations on access to minors).

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Note that state law provides for a minimum 600-foot buffer from any school, day care center, or youth center that is in existence at the time the license is issued (Bus. & Prof. Code § 26054(b). However, this section explicitly allows the DCC or a local jurisdiction to establish a different radius, which may be greater or lesser than 600 feet. Staff has created a set of maps that identify commercial-zoned properties that are outside of the restricted areas (Attachment 4). The City has the authority to increase the buffer distance and/or expand the entities subject to the buffer, including requiring a minimum distance from parks or residentially zoned properties. The City can also decrease the buffer, although staff does not recommend decreasing the buffer to less than 500 feet, to mitigate against potential legal issues. While state law permits reductions below 600 feet, such decreases could invite disputes related to public health and youth protection concerns, including possible challenges from community groups or appeals arguing that the reduction fails to adequately safeguard sensitive uses (e.g., under general principles of reasonable regulation in MAUCRSA or local zoning authority).

Additionally, buffers significantly below the state default may raise indirect federal considerations, such as enhanced penalties for cannabis distribution within 1,000 feet of schools under the federal Controlled Substances Act (21 U.S.C. § 860), though federal enforcement in state-legal markets is currently limited. Staff's recommendation aligns with public health best practices that prioritize caution to avoid these risks.

4. Number of Allowed Businesses. How many cannabis businesses does the City want to allow? Under AUMA, the City can choose to limit the total number of allowed businesses within its jurisdiction. The City of Grover Beach limits the number of retailers and/or microbusinesses with a retailer use to four (4).

5. Types of Permits. What type of permit(s) will be required? Some cities have imposed conditional use permit requirements for cannabis land uses, while others have required annual, renewable regulatory permits. Some cities require both a land use permit and an annual renewable regulatory permit.

A conditional use permit is a one-time discretionary land use permit that requires a Planning Commission decision at a public hearing. Conditional use permits are entitlements that run with the land, not the operator, and would transfer with ownership of the property unless abandoned or revoked. A regulatory permit is renewed annually and is not a land use entitlement that “runs with the land.” Furthermore, the City Council could designate the approval authority for annual regulatory permits to be staff, the Planning Commission, or the Council. Any decisions made by staff would be subject to appeal to the Planning Commission, and in turn any decisions made by the Planning Commission would be subject to appeal to the City Council.

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6. Permit Processing/Procedures. How will the City process cannabis land use applications? The City could take a number of approaches: (1) first come, first served; (2) lottery; and/or (3) scoring system. Under a lottery system, pre-qualified applicants meeting applicable standards would be selected at random to apply for the required cannabis land use permit and/or regulatory permit. Under a scoring system model, applicants would receive a score based on a review of their applications. Those applicants who receive the highest scores would then be recommended for approval to the decision making authority. If this selection method is used, it is important to ensure that objective scoring criteria be developed and used.

7. Revenue. How will the City recover its regulatory costs and/or generate revenue from commercial cannabis activity? The City could do so through a regulatory fee, a tax, community benefit agreements, or development agreements.  Regulatory Fees: If the City requires a regulatory permit to conduct commercial cannabis operations, it can establish a regulatory fee by resolution of the City Council. A regulatory fee may be charged to each cannabis business to cover the City’s reasonable, incurred regulatory costs of issuing licenses and permits, performing investigations, inspections, and audits, and administrative enforcement directly associated with the business. These fees can vary based on the license type and may not exceed the City’s reasonable costs. The City Council may adopt this fee at a noticed public hearing after making findings applicable to other similar permit/license fees.
 Tax Considerations
A regulatory fee that exceeds the costs of regulation is considered a tax.

The City may levy (subject to voter approval) a tax on cannabis businesses for the privilege of selling, cultivating, or processing cannabis within City limits. Any such tax would be owed on top of the existing statewide taxes established under the Cannabis Tax Law (Rev. & Tax. Code, § 34010, et seq.) and all other applicable sales and use taxes. State law imposes an excise tax of 15% of gross receipts from the retail sale of cannabis or cannabis products, on top of generally applicable sales and use taxes. The City may impose an additional sales and use tax on nonmedical cannabis, but may not impose a sales and use tax on medical cannabis. If these revenues could be used for general governmental purposes, this would constitute a “general tax” and require approval by only a simple majority of voters (50% +1). If the City desired to earmark cannabis business license tax revenues for specific purposes, this would constitute a “special tax” and require approval by 2/3rds of voters. Any subsequent increases to an adopted tax would require additional voter approval.

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 Example: 5%–10% local tax on gross receipts of cannabis sales.  Example: $50–$150 per kilogram of cannabis cultivated.  Example: $1-$3 per square footage of cultivation site, levied annually.  Development Agreement/Community Benefit Contributions: A Development Agreement (DA) can be used by a local government as a tool to negotiate and secure community benefits, such as non-monetary and monetary contributions from a cannabis business seeking to operate within the jurisdiction and impose business-specific zoning and other requirements. While cannabis taxes require voter approval, a DA allows municipalities to enter into a binding contract with the retailer as part of the entitlement approval process. Through this agreement, the retailer may voluntarily agree to provide ongoing financial contributions, such as a percentage of gross sales or fixed annual payments, or other non-monetary contributions, which can help offset community impacts and support public services, without being levied as a tax. However, staff cautions that employing DAs for cannabis businesses warrants significant scrutiny, given their traditional application to major developments with extensive infrastructure needs or long-term planning elements, as opposed to more routine commercial operations. Any negotiated contributions must be rigorously justified to directly correspond with the business’s impacts and the City’s regulatory expenses, in strict adherence to state statutes (e.g., Government Code §§ 65864, et seq., and associated fee regulations).

Failure to do so risks reclassifying these contributions under expansive tax and fee definitions, which could invite legal challenges and hinder effective execution. Consequently, staff strongly recommends prioritizing a voterapproved ballot measure as the preferred strategy, since it ensures transparency through community participation, uniform treatment across businesses, and compliance with proven revenue mechanisms outlined in Propositions 26 and 218. This method enhances stability, reduces exposure to disputes, and avoids the complexities and potential inequities of case-bycase bargaining.

8. Medical vs. Recreational
 Medical Marijuana Dispensaries: These dispensaries are for individuals who have a valid medical marijuana recommendation from a licensed physician. To purchase from a medical dispensary, patients need a Medical Marijuana Identification Card (MMIC), which provides them with certain legal protections and can offer higher possession limits. There is no minimum age limitation to obtain an MMIC, as long as the individual has a valid medical marijuana recommendation. Cities cannot prohibit the delivery of medicinal cannabis to patients or their primary caregivers.

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 Recreational (Adult-Use) Dispensaries: These dispensaries are open to any adult 21 years or older without the need for a medical recommendation.

No MMIC is required.
 Taxation
 Medical Dispensaries: Medical marijuana purchases are exempt from the state-level sales and use tax in California, although they are still subject to local taxes. This makes medical cannabis generally less expensive than recreational cannabis.
 Recreational Dispensaries: Recreational cannabis is subject to the state sales and use tax (15%), which makes it more expensive than medical marijuana in many cases.

9. Policy Context
 A cannabis tax could provide a new, locally controlled revenue stream to support general City services or be structured for specific purposes.

However, there are other potential ballot measures that staff is in the process of evaluating and will be asking for direction from Council regarding upcoming ballot measure placement. The other potential ballot measures that may also appear on the same ballot include a statewide water-related measure, and a possible increase to the City’s Transient Occupancy Tax (TOT). The timing and number of measures presented to voters should be carefully considered to avoid ballot fatigue and ensure clarity regarding the purpose and impact of each proposal.

Community Outreach
On November 20, 2025 staff conducted a FlashVote Survey on cannabis to gather community input on cannabis policy. The community is split with 45% of residents opposing commercial cannabis and 40% supporting commercial cannabis. The remaining respondents fall in the “neutral” and “not sure” categories. Among locals willing to consider any cannabis activity, the preferred business type was retail storefront (55%) with a cap on two or fewer retail permits issued (33%). Of those supportive of commercial cannabis, there is support of a local cannabis tax on sales (47%) and hours of operation consistent with the State standard, 6:00am – 10:00pm (53%). The top location preferred by residents in support of commercial cannabis is the E. Grand Avenue Corridor (42%).

See Attachment 5 for the survey results and FlashVote URL here1.

Retail Market Analysis
City staff contracted with HdL companies, a tax/financial consultant, for a potential cannabis retail market analysis (Attachment 1) for the City of Arroyo Grande to help inform the development of a potential cannabis regulatory and tax program.

1 https://www.flashvote.com/arroyo-grande-ca/surveys/cannabis-11-25

Item 11.a.

City Council
Study Session on Cannabis Regulation Policy Direction
December 9, 2025

The analysis includes estimates for the number of cannabis retailer that may seek to locate in the City, as well as estimates for the gross receipts and tax revenue that may be generated from a cannabis business tax. The analysis also includes additional general discussion of considerations for allowing other cannabis business types.

ALTERNATIVES:

The following alternatives are provided for the Council’s consideration:

1. Direct staff to proceed with the preparation of a local cannabis tax ballot measure (and draft tax language) to be placed on a future municipal ballot, for consideration at a future City Council meeting, and upon passing of a tax ballot measure, proceed with drafting regulations to allow commercial retail cannabis uses and return with zoning, permit process and a draft ordinance;

2. Instead of a tax ballot measure to collect revenue, pursue a development agreement approach that guides the conditions of each specific cannabis business;

3. Maintain existing prohibitions; or

4. Provide other direction to staff.

ADVANTAGES:

Allowing commercial cannabis businesses could provide new local revenue through taxes or development agreements, create jobs, and encourage private investment in underutilized areas. Local regulation also offers greater oversight of operations, product safety, and security, helping reduce illegal market activity and aligning the City’s policies with regional and voter trends.

DISADVANTAGES:

Potential drawbacks include community concerns related to youth exposure, public health, and neighborhood compatibility, as well as increased demands on enforcement and staff resources. Federal restrictions, regulatory complexity, and possible nuisance issues such as odor or aesthetics may also pose challenges for implementation and ongoing administration.

ENVIRONMENTAL REVIEW:

Providing direction on cannabis regulation is not a project subject to the California Environmental Quality Act (“CEQA”) because it has no potential to result in either a direct, or reasonably foreseeable indirect, physical change in the environment. (State CEQA Guidelines, §§ 15060, subd. (b)(2)-(3), 15378.) Alternatively, providing direction on cannabis regulation is exempt from CEQA on the basis that it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment. (State CEQA Guidelines, § 15061, subd. (b)(3).)

Item 11.a.

City Council
Study Session on Cannabis Regulation Policy Direction
December 9, 2025

PUBLIC NOTIFICATION AND COMMENTS:

The Agenda was posted at City Hall and on the City’s website in accordance with Government Code Section 54954.2.

ATTACHMENTS:

1. Cannabis Retail Market Analysis for Arroyo Grande

2. Arroyo Grande Municipal Code, Title 16, Chapter 16.62, Cannabis

3. Condition and Health of the Cannabis Industry

4. Cannabis Locations – Eligible Properties Map

5. Cannabis FlashVote Survey Results

120 S. State College Blvd. Suite 200 | Brea, CA 92821 | 714.879.5000 | hdlcompanies.com November 24, 2025
Aleah Bergam
Management Analyst
City of Arroyo Grande
300 E Branch St
Arroyo Grande, CA 93420
Re: Cannabis Retail Market Analysis
The City of Arroyo Grande currently prohibits all commercial cannabis businesses. The City Council recently provided direction to staff to explore alternative revenue measures, including the possibility of generating revenue by allowing commercial cannabis businesses. It is anticipated that any such cannabis businesses would be subject to either a voter-approved tax or negotiated Community Benefit Agreements as a means to generate revenue for the City.

The Arroyo Grande City Council is scheduled to discuss this issue at its December 9th City Council meeting, at which time it may provide direction to staff to begin the process of developing a commercial cannabis program, which would likely include both a regulatory ordinance and a cannabis tax measure. A tax measure would have to be approved by the City’s voters at a general election, with the next opportunity being the November, 2026 election. City staff are currently preparing information for the City Council’s December 9th meeting.

To assist with this, the City has requested that HdL provide a fiscal analysis of the cannabis retail market in the Arroyo Grande region to help guide and inform the City’s discussion and decisionmaking process. The City has requested that this analysis show the number and locations of other cannabis retailers within the same service area, cannabis tax rates in nearby jurisdictions, and projections for the amount of revenue that could potentially be generated from a tax on cannabis retailers. This analysis also provides a general overview of some of the issues and considerations for allowing cannabis retailers and other types of cannabis businesses.

HdL shall be available to provide additional assistance as needed or requested, including a presentation of the report at a City Council meeting, or as otherwise desired by the City.

Cannabis Retail Market in the Arroyo Grande Region
The City of Arroyo Grande is located in coastal San Luis Obispo County adjacent to the beachfront cities of Grover Beach and Pismo Beach and to the unincorporated community of Oceano. These communities are all contiguous to each other but are otherwise separated from other nearby cities by stretches of highway traversing coastal canyons and rural farmlands.

Arroyo Grande has a population of around 18,400 people, making it the largest city in the immediate area. The neighboring cities of Grover Beach and Pismo Beach have populations of 12,700 people and 8,100 people, respectively, while the community of Oceano has a population of 7,200 people. There are an additional 4,400 people or so living in the surrounding unincorporated area, including Avila Beach, for a total nearby population of around 50,800 people.

Attachment 1

2 The City of Arroyo Grande is located
along the north/south Highway 101
corridor which connects it with the
larger cities of San Luis Obispo (17
miles to the north) and Santa Maria
(16 miles to the south). Other cities
and communities in the area include
the City of Guadalupe and the
unincorporated communities of
Nipomo, Callender/Woodlands, and
Orcutt. The total population of this
region is around 270,000 people.

These cities and communities are
shown in Figure 1.

The City of Arroyo Grande does not
currently allow any cannabis
businesses, nor does the City of
Pismo Beach. The City of Grover
Beach allows all types of cannabis
businesses including both storefront
retail and non-storefront delivery
services. Storefront cannabis retailers
are not allowed in the unincorporated
areas of San Luis Obispo County,
though all other cannabis business
types are allowed, including nonstorefront delivery services.

Retail studies show that 93% of consumers generally prefer to travel no more than 15 to 20 minutes to make most routine purchases. Grover Beach and Oceano are immediately adjacent to Arroyo Grande and so cannabis retailers there fall within this distance. Retailers in Guadalupe, Nipomo and Callender/Woodlands also fall within this distance.

HdL has found that consumers in rural areas are willing to drive a bit further to make cannabis purchases due to the greater distances between communities and the relative scarcity of cannabis retailers1. Extending this driving time up to 30 minutes brings in the cities of Santa Maria and San Luis Obispo, and the community of Orcutt.

The City of Santa Maria is the largest city in the nearby region with a population of 111,000, followed by the City of San Luis Obispo with a population of 47,100. Adding in the communities of Orcutt (32,000), Nipomo (18,200), Callender/Woodlands (3,200, combined) and Guadalupe (8,000) brings the total population of the region to around 270,000. The actual population is likely somewhat higher as we have not included the disbursed population of the rural areas. 1 There are only around 1,800 licensed cannabis retailers in all of California, compared with over 23,000 places to buy tobacco or vape products and nearly 80,000 places to buy alcohol.

Figure 1:

Attachment 1

3 There are 4 storefront retailers located in the City of Grover Beach, 1 in Guadalupe and 2 in the City of San Luis Obispo. All of the other cannabis retailers are non-storefront delivery services located in the unincorporated County, which does not allow storefront retail. There are 4 of these in Oceano and 1 each in Callender, Nipomo and Orcutt, some of which are cannabis microbusinesses that include a retail component. The number of cannabis retailers in each of these communities and their distance to or from Arroyo Grande is shown in Figure 2, below. Their locations are also shown in the map in Figure 1, on the previous page.

Figure 2:

Figure 2 shows that there are a total of 14 cannabis retailers in the overall area, giving an average of 1 retailer for every 19,000 people. 8 of these are located in Grover Beach and Oceano, immediately adjacent to Arroyo Grande. These coastal communities, along with the City of Pismo Beach, are somewhat isolated from other nearby communities by natural separators, making them a “micro market”. There are 8 retailers within this local area, for a retail density of 1 retailer for every 6,000 people or so. This shows that the retail cannabis market in the immediate Arroyo Grande area has a retail density more than 3 times higher than in the broader overall region.

HdL has generally observed an average retail density of around 1 cannabis retailer for every 18,000 to 20,000 people across California, which we use as a very general benchmark for comparison purposes, only. This figure is an average based on a very wide range, with some areas having one retailer for more than 100,000 people and others having one retailer for fewer than 1,000 people. The success of cannabis retailers appears to have more to do with their business model and how they have designed their business to fit within the local market, rather than with a simple calculation of their proportional share of the market.

City/Community Distance
(Miles)
Population Number of
Retailers
Retailers per
Capita
Arroyo Grande 0 18,400 0 - Grover Beach Adjacent 12,700 4 3,175 Oceano* Adjacent 7,200 4 1,800
Pismo Beach Adjacent 8,100 0 - Other Unincorportated Adjacent 4,400 0 - Nearby Total 50,800 8 6,350 Callender/Woodlands* 6 3,200 1 3,200
Nipomo* 9 18,200 1 18,200
Guadalupe 12 8,000 1 8,000
Santa Maria 16 110,000 0 - San Luis Obispo City 17 47,100 2 23,550 Orcutt* 24 32,000 1 32,000
Region Total 269,300 14 19,236
Population and Retailers in Nearby Jurisdictions
* Unincorporated community
Region Total includes communities shown in Nearby Total Attachment 1

4 Figure 3, below, provides a more detailed look at the locations of cannabis retailer within the immediate area. As can be seen, the cannabis retailers in Grover Beach and Oceano are all clustered along Highway 1, which suggests that they are located to serve tourists and visitors.

The retailers in Oceano are all non-storefront delivery services, so they are located in light industrial areas that have quick access to the Highway 1 corridor.

While the retail density in the immediate area is already higher than average and higher than the region as a whole, there are still opportunities to reach a different portion of the local market.

Research by HdL shows that cannabis consumers have a strong preference for making purchases at walk-in locations when possible, rather than by delivery, and will generally opt to do their shopping at the nearest and most convenient location. Among retailers that offer both instore purchases and delivery, sales by delivery generally tend to account for only 5% to 10% of sales, though this can be as high as 20% or 30% depending upon the availability of storefront retailers within the surrounding area.

Storefront retailers located along the Highway 101 corridor could capture sales from through traffic, particularly if located in the Regional Commercial (RC) zone with other destination stores.

Storefront retailers in this location would likely also be better positioned to capture sales from residents of Pismo Beach than the existing locations in Grover Beach.

Storefront retailers in Arroyo Grande could also be located so as to be more conveniently accessible to residents of both the City and of neighboring Grover Beach, such as in the Gateway Mixed-Use (GMU) and Fair Oaks Mixed-Use (FMU) zones along Grand Avenue. We believe that either of these locations would provide the best opportunity for cannabis retailers in the City of Arroyo Grande to capture cannabis sales from area residents, rather than focusing on tourists.

Figure 3:

Attachment 1

5 Cannabis Tax Rates
Figure 4, below, shows all of the jurisdictions within the local region and notes whether each allows or prohibits cannabis retailers. Of the 6 cities and 2 counties, only Arroyo Grande, Pismo Beach and Santa Maria completely prohibit cannabis retailers. San Luis Obispo County allows non-storefront cannabis delivery services but prohibits storefront cannabis retailers. While Santa Barbara County allows both storefront and non-storefront cannabis retailers, our survey did not identify any retailers within the unincorporated County that deliver to addresses in Arroyo Grande.

Figure 4 also shows the current rates for cannabis taxes or community benefit fees for cannabis retailers among these nearby jurisdictions. These rates are remarkably consistent and show far less range or variation than we usually see within a region. All of the cities and counties in the region charge a rate of 6.0%, other than Grover Beach which sets its rate at 5.0%. The average among all of these jurisdictions is 5.8%. The City of Guadalupe does not have a cannabis tax and instead requires that businesses enter into Community Benefit Agreements (CBA’s) to provide

6.0% of their gross receipts as revenue to the City. These agreements also require the business to pay an additional 1.5% of their gross receipts to non-profit organizations in the community, bringing their total commitment up to 7.5%.

Figure 4:

Of these 14 retailers, 8 are storefront retailers (some of which also conduct sales by delivery) and 6 are non-storefront delivery-only retailers. HdL surveyed these retailers and found that 8 of them deliver to addresses in the City of Arroyo Grande. However, due to the large concentration of retailers located in Grover Beach and Oceano, we doubt that deliveries from retailers in outlying areas would amount for any significant portion of sales.

As noted previously, cannabis sales made by delivery amount to only a small portion of overall cannabis sales when consumers have the option of making walk-in purchases. A survey of over 100 cannabis retailers showed that storefront retailers average $6.5 million, while non-storefront delivery services average just $1.3 million. As with any average, these figures are based upon a wide range, with some retailers making over $30 million in annual sales and other making less than $1 million.

City/County Storefront Delivery
Only
Total Deliver to
Arroyo Grande
Tax or Fee Rate
Arroyo Grande - - - - - Grover Beach 4 0 4 2 5.0%
Guadalupe1
1 0 1 1 6.0%
Pismo Beach - - - - - San Luis Obispo City 2 0 2 1 6.0% San Luis Obispo County - 6 6 2 6.0%
Santa Barbara County 1 0 1 0 6.0%
Santa Maria - - - - - Total / Average 8 6 14 6 5.8%
Cannabis Retail Types Allowed in Nearby Jurisdictions
Red or - indicates not allowed; Green indicates allowed 1 The City of Guadalupe also requires and additional 1.5% contribution to non-profit organizations for a total rate of 7.5%.

Attachment 1

6 Cannabis Tax Revenues
In Figure 5, below, we have calculated the potential revenues that could be generated from a tax on cannabis retailers in the City of Arroyo Grande. Starting with the City’s population of 18,400, we have added the population of the other cities and unincorporated communities in the immediate area, giving us a total retail market area population of 50,800. The area of Arroyo Grande, Grover Beach and Pismo Beach attracts around 2 million visitors per year2, which increases the size of the local market. Assuming an average length of stay of 2 days, this influx of tourists would equal an additional 11,000 full-time residents, giving us a total equivalent fulltime population of 61,800 people.

The regional cannabis market is already well served by 4 storefront retailers in Grover Beach and 4 non-storefront delivery services in Oceano. We assume that these existing retailers currently have captured essentially 100% of the market, other than incidental sales by delivery services from Callender, Guadalupe and San Luis Obispo. While new retailers in the City of Arroyo Grande would likely not add to the overall sales in the area, they would still be able to recapture some portion of the market from existing retailers.

Given the City’s advantages with its proximity to Pismo Beach and its location along Highway 101, we believe that well-placed retailers within the City of Arroyo Grande could potentially capture up to 40% of the local market over time. Importantly, this assumes that the City of Pismo Beach does not choose to allow cannabis retailers in the near future. We have applied a 60% leakage factor to account for that portion of the market that would remain with existing retailers, bringing our adjusted service area population down to 24,720 people.

Figure 5:
2 https://reachcentralcoast.org/pismobeach/#:~:text=Located%20along%20historic%20Highway%20101,2%20million%20tourists%20a%20year.

Category Estimate
1 Population of Arroyo Grande 18,400
2 Population of surrounding area 32,400
3 Total service area population 50,800
4 Equivalent population increase from tourism 11,000
5 Total equivalent full-time population 61,800
6 Assumed leakage to other existing retailers 60%
7 Adjusted service area population 24,720
8 Percentage of population that uses cannabis 16%
9 Consumer base (number of cannabis users) 3,955
10 Average transaction amount $57
11 Transaction frequency (per month) 2
12 Monthly gross receipts $450,893
13 Annual gross receipts $5,410,714
Estimated Gross Receipts for Cannabis Retailers
Attachment 1

7 Data from the Substance Abuse and Mental Health Services Administration’s (SAMHSA’s) annual National Survey on Drug Use and Health (NSDUH) indicates that 16% of Californians use cannabis on a regular basis (within the past month). This is an increase from previous figures in 2020 showing 13% regular usage. While there are other estimates suggesting use rates of 25% or more, we believe the NSDUH figures to be the most data-based. Applying this figure to our adjusted service area population brings our consumer base down to around 4,000 people.

Assuming an average purchase amount of $57 and an average frequency of twice monthly produces gross receipts of around $451,000 per month or $5.4 million per year3.

In Figure 6, below, we have applied a range of tax rates to our estimate of gross receipts. Applying a rate of 4.0% would generate annual revenues of a little over $200,000 for the City. A rate of

5.0%, consistent with the City of Grover Beach, would produce revenues of around $270,000 and a rate of 6.0%, consistent with other jurisdictions in the area, would produce around $325,000. A higher rate of 7.0% would generate a little less than $380,000 in annual revenue for the City of Arroyo Grande.

Figure 6:

Retail cannabis sales would also capture regular sales tax and any applicable transactions and use taxes4. The City would collect an additional $54,000 from the 1.0% Bradley-Burns uniform local sales tax, and would also generate $81,000 from Measure O-06 and Measure E-24.

Combined, a 6.0% tax on retail cannabis sales under our above scenario would generate around $460,000 in annual revenue for the City of Arroyo Grande. 3 In researching this report we noted that the City of Grover Beach budgeted for $1.3 million from its cannabis tax in FY 2023/2024 and $1.2 million in FY 2024/2025. The City of Grover Beach has a cannabis tax rate of 5.0%, which would indicate total gross receipts of over $26 million. These figures are far higher than the estimates provided here and include other non-retail cannabis businesses. We have provided a more conservative figure here. 4 Medicinal cannabis sales made to persons who present a state-issued Medical Marijuana Identification Card (MMIC) would be exempt only from the base state and local sales tax, but all other cannabis taxes and transaction taxes would still apply. There are currently fewer than 3,000 MMIC cards issued in all of California, making their impact on revenue projections de minimis. Cannabis sales made by delivery to addresses in other jurisdictions may be subject to apportionment, which could impact these projections. 14 Averaged annual gross receipts (from Line 16) $5,410,714 15 Cannabis Business Tax Rate:
16 4.00% $216,429
17 5.00% $270,536
18 6.00% $324,643
19 7.00% $378,750
20 21 Bradley-Burns 1.0% Local Sales Tax $54,107
22 Arroyo Grande Measure O-06 $27,054
23 Arroyo Grande Measure E-24 $54,107
24 Total Sales and Transactions Taxes $135,268
25 Total City Revenue (assuming 6.0% tax rate) $459,911 Estimate of Cannabis Tax Revenues
Attachment 1

8 Issues Affecting the Statewide Cannabis Market
The State of California applies an excise tax of 15% on all retail sales of cannabis and cannabis products. This rate increased up to 19% as of July 1 as a condition of previous legislation (AB 195, 2022) that eliminated the state’s separate cannabis cultivation tax. That increase was rolled back to 15% with Governor Newsom’s signing of AB 564 which became effective as of October 1, 2025.

The State’s cannabis excise tax is
applied on top of any local
cannabis tax, so that the resulting
cumulative tax rate is greater than
the sum of its parts. Figure 4 shows
how state and local taxes are
applied to a hypothetical sale of
$100. Assuming a local cannabis
tax rate of 6.0%, the various state
and local taxes add up to a total of

29.75%. However, when they are
applied on top of each other, the
cumulative tax rate is 32.57%,

2.82% higher than the sum of the
individual tax rates.

The federal spending bill signed by President Trump on November 12, 2025, bans all hempderived products containing any variety of intoxicating THC derivatives (THCA, Delta 8 THC, etc.).

This issue has generated a great deal of concern that it is a step towards recriminalizing cannabis, but this is not the case. The ban on hemp-derived THC derivatives was done to close an unintended loophole created by the 2018 farm bill that legalized hemp production for fiber and was not intended to allow for any intoxicating uses. By only addressing Delta 9 THC as found in cannabis, the farm bill allowed the emergence of a burgeoning industry that synthesized powerful THC derivatives that were infused into unregulated drinks, edibles and vape products that were sold at liquor stores, gas stations and smoke shops, directly competing with licensed and regulated cannabis products.

Hemp-derived THC products were already banned in California in 2024. Banning these products does not affect cannabis-derived THC products and actually strengthens the market for licensed cannabis products by preventing unfair competition from unregulated hemp-based products.

Figure 7:

Rate Amount
Purchase Amount $100.00
Local Cannabis Business Tax 6.00% $6.00
Subtotal $106.00
State Cannabis Excise Tax 15.00% $15.90
Subtotal $121.90
State and Local Sales Taxes 8.75% $10.67
Total Due $132.57
Total Taxes 29.75% $32.57
Total Cumulative Tax Rate 32.57%
Difference 2.82%
State and Local Cannabis Tax Calculation
Attachment 1

A.

B.

Chapter 16.62 - CANNABIS
Footnotes:
--- (1) ---
Editor's note— Ord. No. 687, § 2, adopted Oct. 10, 2017, amended Ch. 16.62 in its entirety to read as herein set out.

Former Ch. 16.62, §§ 16.62.010—16.62.080, pertained to medical marijuana, and derived from Ord. No. 675, § 3, adopted Jan. 26, 2016; and Ord. No. 678, §§ 3—5, adopted June 28, 2016.

16.62.010 - Purpose and findings.

By adoption of this chapter, with the exception of deliveries into the city of Arroyo Grande by state licensed cannabis retailers, it is the city council's purpose and intent to: prohibit commercial cannabis activity, including but not limited to medical cannabis dispensaries, cooperatives and collectives; outdoor cultivation of cannabis; and manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, or sale of cannabis and cannabis products, and the location of premises for retail or non-storefront retail cannabis businesses; and to reasonably regulate the ability of individuals to cultivate not more than six cannabis plants indoors for personal noncommercial use, as permitted by the Adult Use of Marijuana Act (AUMA, Proposition 64), and Health and Safety Code Sections 11362.1 and 11362.2. These regulations are adopted pursuant to the AUMA and the city of Arroyo Grande's authority under Article XI, Section 7 of the California Constitution, in order to promote the health, safety, and general welfare of the residents and businesses within the city of Arroyo Grande and prevent adverse impacts which such activities may have on nearby properties and residents.

Pursuant to the city of Arroyo Grande's police powers authorized in Article XI, Section 7 of the California Constitution, the city has the power to regulate permissible land uses within its boundaries and to enact regulations for the preservation of public health, safety and general welfare of its residents and community. Further, pursuant to Government Code Sections 38771 through 38775, the city also has the power through the city council to declare actions and activities that constitute a public nuisance.
(Ord. No. 687, § 2, 10-10-2017; Ord. No. 694, § 2, 8-14-2018)

16.62.020 - Application.

The provisions of this chapter shall apply generally to all property within the boundaries of the city wherein any of the conditions herein specified are found to exist. However, nothing in this chapter is intended, nor shall it be construed, to burden any defense to criminal prosecution under the provision of state law relating to the use of medical cannabis.
11/20/25, 10:24 AM Arroyo Grande, CA Code of Ordinances about:blank 1/5
Attachment 2

(Ord. No. 687, § 2, 10-10-2017)

16.62.030 - Administration.

The chief of police, or the chief's designee and/or the director of community development, or the director's designee, are charged with the responsibility of administering this chapter and exercising the authority conferred thereby.
(Ord. No. 687, § 2, 10-10-2017)

16.62.040 - Definitions.

Consistent with the definitions set forth in state laws relating to cannabis, including but not limited to the Medicinal and Adult-Use Cannabis Regulation and Safety Act (Business and Professions Code Sections 26000 et seq.), the following words shall have the following meaning:
"Accessory structure" means a legally existing fully enclosed detached structure no larger than that is fully enclosed with walls for all perimeters of the building, including, without limitation, a storage shed located on the same legal parcel as a private residence. "Cannabis" means all parts of the plant genus Cannabis savita Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture or preparation of the plant, its seeds or resin, and includes "cannabis", "medical cannabis", "cannabis product" and "medical cannabis product", as otherwise defined in Business and Professions Code Sections 26001(f) and (ai). "Commercial cannabis activity" means any cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery or sale of cannabis or cannabis products, including but not limited to medical cannabis cooperatives and collectives. "Cultivation" shall have the meaning as set forth in Business and Professions Code Section 26001(l) and also means the planting, growing, harvesting, drying, processing or storage of one or more cannabis plants or any part thereof in any location, indoor or outdoor, including a fully enclosed and secure building. "Delivery" shall have the meaning as set forth in Business and Professions Code Section 26001(p) (m). "Dispensary" shall mean any facility, location, establishment or similar entity that cultivates, distributes, delivers, supplies or processes cannabis for medical purposes relating to a qualified patient or primary caregiver, pursuant to state law and in accordance with Health and Safety Code Section 11362.5 et seq. A dispensary shall include a dispensing collective or cooperative and shall include a mobile dispensary and delivery service.
"Primary caregiver." This shall have the meaning set forth in Health and Safety Code Section 11362.7(d). 11/20/25, 10:24 AM Arroyo Grande, CA Code of Ordinances about:blank 2/5
Attachment 2

A.

B.

C.

1. 2.

3. 4.

5. 6.
"Qualified patient." This shall have the meaning set forth in Health and Safety Code Section 11362.7(f). (Ord. No. 687, § 2, 10-10-2017)

16.62.050 - Cultivation.

Except for limited indoor cultivation for personal use as provided in subsection C. herein and as permitted by Health and Safety Code Section 11362.2, no person or persons owning, leasing, occupying, or having charge or possession of any parcel of real property in the city of Arroyo Grande, including primary caregivers and qualified patients, collectives, cooperatives or dispensaries, shall allow such parcel to be used for the cultivation of cannabis. Cultivation of cannabis in violation of this chapter within the city of Arroyo Grande for any purpose is prohibited, and is expressly declared to be a public nuisance.

The prohibition contained in this section is intended to constitute an express prohibition on all outdoor and indoor cultivation of cannabis in the city of Arroyo Grande, except for limited indoor cultivation for personal use.

The limited indoor cultivation of six or fewer live cannabis plants for personal use is permitted within a private residence, or inside an accessory structure to a private residence located upon the grounds of a private residence that is fully enclosed and secure, subject to the following restrictions and standards, and only to the extent such cultivation is authorized by state law:

Pursuant to Health and Safety Code Section 11362.2, "private residence" means a house, an apartment unit, a mobile home, or other similar dwelling. A total of six living plants may be planted, cultivated, harvested, dried, or processed at a single private residence at one time.

No more than fifty (50) contiguous square feet of the interior of the private residence, shall be devoted to the cultivation of cannabis. The cannabis plants being cultivated shall not exceed ten (10) feet in height.

The area used for cultivation shall comply with California Building, Electrical and Fire Codes as adopted by city of Arroyo Grande.

The cannabis cultivation shall be concealed so that it is not visible from the exterior of the property, the public right-of-way, and/or neighboring properties.

The lighting for the cultivation shall not exceed twelve hundred (1,200) watts. The use of flammable or combustible products, including but not limited to, propane and butane for cultivation and processing is prohibited. If cultivation is in an accessory structure, light shall not emanate or be visible from outside the accessory structure.

The cannabis cultivation shall not adversely affect the health or safety of the occupants of other properties in the vicinity by creating dust, glare, heat, noise, noxious gasses, odor, smoke, traffic, vibration or other impacts and shall not be maintained in a manner so as to constitute a hazard due to use or storage of materials, processes, products or wastes. 11/20/25, 10:24 AM Arroyo Grande, CA Code of Ordinances about:blank 3/5
Attachment 2

7. A.

B.

1. 2.

3. 4.

5. Nothing in this subsection is intended, nor shall it be construed, to preclude any landlord from limiting or prohibiting cannabis cultivation by tenants. (Ord. No. 687, § 2, 10-10-2017)

16.62.060 - Commercial cannabis activity, medical cannabis collectives, cooperatives and dispensaries prohibited.

Except as provided in Section 16.62.070 related to deliveries into the city of Arroyo Grande, all commercial cannabis activity, including but not limited to medical cannabis collectives, cooperatives and dispensaries (including mobile dispensaries), cultivation, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, or sale of cannabis and cannabis products, and the location of premises for any retail or non-storefront retail cannabis businesses, are not permitted in or upon any premises in the city of Arroyo Grande.

A medical cannabis dispensary shall not include the following uses, so long as such uses comply with this code, Health and Safety Code Section 11362.5 et seq., and other applicable law:

A clinic licensed pursuant to Chapter 1 of Division 2 of the Health and Safety Code.

A health care facility licensed pursuant to Chapter 2 of Division 2 of the Health and Safety Code.

A residential care facility for persons with chronic life-threatening illness licensed pursuant to Chapter 3.01 of Division 2 of the Health and Safety Code.

A residential care facility for the elderly licensed pursuant to Chapter 3.2 of Division 2 of the Health and Safety Code.

A hospice or a home health agency licensed pursuant to Chapter 8 of Division 2 of the Health and Safety Code.
(Ord. No. 687, § 2, 10-10-2017; Ord. No. 694, § 3, 8-14-2018)

16.62.070 - Deliveries.

It shall be unlawful for any person to deliver cannabis or cannabis products or engage in activities that constitute delivery of cannabis or cannabis products anywhere within the boundaries of in the city of Arroyo Grande, except for cannabis retail businesses with physical premises located outside of the city of Arroyo Grande that are licensed by the State Bureau of Cannabis Control. Notwithstanding any provision of this chapter, nothing herein is intended to prohibit the transportation of cannabis or cannabis products on public roads by a licensee duly licensed and acting in compliance with Division 10 of the Business and Professions Code (Business and Professions Code Sections 26000 et seq.). (Ord. No. 687, § 2, 10-10-2017; Ord. No. 694, § 4, 8-14-2018) 11/20/25, 10:24 AM Arroyo Grande, CA Code of Ordinances about:blank 4/5
Attachment 2

A.

B.

16.62.080 - Violations and penalties.

Any person that violates any provision of this chapter shall be guilty of a separate offense for each and every day during any portion of which any such person commits, continues, licenses, or causes a violation thereof, and shall be punished accordingly.

A violation of any provision of this chapter shall be subject to any enforcement remedies available under the law and/or the Arroyo Grande Municipal Code. In addition, the city may enforce a violation of this chapter by means of civil enforcement through a restraining order, a preliminary or permanent injunction, nuisance abatement procedures, or by any other means authorized by law. Notwithstanding any other provision of this code, no conduct which is protected from criminal prosecution pursuant to the Compassionate Use Act (Health and Safety Code Sections 11362.5) and/or the Medical Marijuana Program Act (Health and Safety Code Sections 11362.7— 11362.85) shall be made subject to criminal prosecution by this code. Violation of any provision in this chapter is a misdemeanor unless the city attorney authorizes issuance of an infraction citation or files a complaint charging the offense as an infraction; or the court, upon the prosecutorial recommendation of the city attorney, determines that the offense is an infraction. (Ord. No. 687, § 2, 10-10-2017)
11/20/25, 10:24 AM Arroyo Grande, CA Code of Ordinances about:blank 5/5
Attachment 2

Health of the Cannabis Industry in California

Condition and Health of the
Cannabis Industry in California
Supplemental Report
Gavin Newsom, Governor
State of California
Tomiquia Moss, Secretary
Business, Consumer Services and Housing Agency
Nicole Elliott, Director
Department of Cannabis Control
Published March 3, 2025
Attachment 3

Health of the Cannabis Industry in California

Executive Summary
The State of California began regulating commercial cannabis activity on January 1, 2018, in parallel with the start of adult use (non-medical) cannabis sales. The last seven years have been marked by economic adjustments, including as pre-existing cannabis businesses transitioned into the regulatory and licensing framework.

Licensed cannabis market
During this transitionary period, the licensed cannabis market has seen both positive momentum as well as challenges.

The challenges include:
• Taxes, fees and other compliance costs can make it expensive to produce licensed cannabis.
• Wholesale prices for harvested cannabis have been declining since the fourth quarter of 2020, and retail sales revenues have been decreasing since 2021. • Some businesses are consolidating or exiting the market, consistent with other emerging markets.

Externalities exacerbate these conditions. Licensed businesses compete with illegal cannabinoid products, including those chemically altered to mimic the intoxicating effects of cannabis products. Federal prohibition of cannabis and treatment under the Internal Revenue Code continue to restrict cannabis businesses and limit opportunities for financing and investment utilized routinely and by other markets during periods of economic change.

Despite these challenges, the California licensed market continues to grow:
• Licensed production of cannabis plants is increasing, and wholesale prices are stabilizing.
• Retail sales volume (units sold) in licensed stores is increasing. • Licensed retail is expanding in some local jurisdictions which, as of two years ago, offered no local consumer access to the regulated market.

Cannabis consumption in California
Cannabis use rates in California are consistent with other states that have legalized.

The share of Californians that use cannabis has been increasing for more than a decade, beginning in 2011 and continuing through adult-use legalization, consistent with national trends.

Attachment 3

Health of the Cannabis Industry in California

Approximately 40% of the cannabis consumed in California is obtained from the licensed, regulated marketplace. The share of licensed consumption has increased from 25% in 2019 and in parallel with greater enforcement, public awareness campaigns and policy changes to create greater legal market access.

Continuing to move a greater share of consumers away from illicit sources and into the licensed market is critically important, because cannabis purchased from illicit sources poses serious public health and safety risks.

Unlicensed cannabis market
The size of the illicit market in California does not appear to be increasing, and the amount of cannabis illicitly grown and produced in California is estimated to be relatively stable today compared to production levels prior to adult-use legalization.

However, a qualitative review of the data suggests that the size of the illicit market may be on the lower end of the estimated range. The State of California’s multiagency enforcement efforts, including those co-led by the Department as a part of California’s Unified Cannabis Enforcement Task Force, appear to be restraining expansions of the illicit market.

As long as there is a patchwork of legalization across the country and high demand for California-grown cannabis, there will be an illicit cannabis market. The most effective ways to eliminate the illicit market include:
• Decreasing costs for licensed businesses
• Increasing costs for illicit cannabis
• Shifting more consumers from unregulated to licensed cannabis Overall outlook
Despite the challenges the California cannabis market faces, 2024 saw the most licensed cannabis produced and a steady increase of the volume of licensed cannabis sold since the introduction of the cannabis regulatory framework in January 2018. The share of total cannabis consumption supplied by the licensed market remains stable at around 40 percent.

Cost reductions or avoided cost increases for licensed businesses, a strong regulatory system, targeted policy reforms, and continued enforcement and consumer education can support further shifts in consumer demand and promote market stability.

Attachment 3

Health of the Cannabis Industry in California

About This Report
This report is submitted in accordance with California Revenue and Taxation Code Division 2 Part 14.5 Chapter 3 §34020.1. It provides an overview of the condition and health of California’s cannabis industry. This reporting requirement was established by Assembly Bill 195 (Committee on Budget), a trailer bill implementing the Budget Act of 2022.

The report includes the following information:
(1) How many local jurisdictions have permitted commercial cannabis activity (2) How many local jurisdictions have not permitted commercial cannabis activity (3) Information or analysis concerning the potential expansion or contraction of the cannabis market in the state, which may include information concerning any increase in retail cannabis sales and activity in the illicit market (4) How many equity licensees have been approved by the Department of Cannabis Control
(5) In what counties the state equity licensees are located (6) The health of the Cannabis Tax Fund, and any future projections of Cannabis Tax Fund revenues
(7) Information on the viability of cannabis businesses in the state, and the ability to continue to operate cannabis businesses in the state, from a general and equity licensee standpoint
(8) The impacts of the suspension of the cultivation tax, including whether that suspension resulted in a decrease in retail cannabis prices or increased participation in the legal cannabis market
The Department of Cannabis Control recently commissioned a cannabis market report (California Cannabis Market Outlook Executive Summary and California Cannabis Market Outlook Full Report), which is submitted in fulfillment of the requirements for items 3, 7, and 8. This report includes additional information and recommendations to strengthen the state’s legal cannabis market.

This supplement contains additional data and insights addressing the remaining reporting requirements (items 1, 2, 4, 5, and 6).

Attachment 3

Health of the Cannabis Industry in California

Supplemental Report on the Health of the
Cannabis Industry in California
Local Regulation of Cannabis Businesses
Cannabis businesses in California are regulated at the state and local level. State law designates local jurisdictions as either the city or county in which the business is physically located:
• Businesses located in an incorporated city are regulated by the city. • Businesses located in an unincorporated portion of a county are regulated by the county.

The city or county can decide whether to license all cannabis business types, license some types but prohibit others, or prohibit all cannabis businesses.

The Department has an online data tool which shows where cannabis business are allowed within the state. Overall:
• 46% of cities and counties allow at least one type of cannabis business • 54% of cities and counties do not allow any type of cannabis business • 57% of cities and counties do not allow any retail cannabis businesses (1) How many local jurisdictions have permitted commercial cannabis activity As of July 2024:

Jurisdiction Type Number that allow at least one type of commercial cannabis activity
Percent
Cities 220 out of 481 46%
Counties 30 out of 58 52%
Total 250 out of 539 46%
*San Francisco, which is both a city and county, is included in this data as a county.

See Exhibit 1 for a detailed listing.

Attachment 3

Health of the Cannabis Industry in California

(2) How many local jurisdictions have not permitted commercial cannabis activity
As of July 2024:

Jurisdiction Type Number that prohibit all commercial
cannabis activity
Percent
Cities 261 out of 481 54%
Counties 28 out of 58 48%
Total 289 out of 539 54%
*San Francisco, which is both a city and county, is included in this data as a county.

See Exhibit 1 for a detailed listing.

Equity Cannabis Business Licensing
The criminalization of cannabis has had a profound and lasting impact on Californians and communities across the country. The long-term consequences of cannabis prohibition continue to affect individuals with past cannabis convictions, their families, and the communities in which they live.

Starting a cannabis business presents challenges for all entrepreneurs, but it can be particularly difficult for those who have been harmed by cannabis criminalization. To address these disparities, California’s cannabis equity initiatives are designed to reduce barriers to enter the cannabis industry for those most impacted by the War on Drugs.

An equity business can be recognized by the Department if 50% of their ownership:
• Meet state equity criteria, which includes cannabis-related arrests or convictions, household income, or residency in areas disproportionately impacted by the War on Drugs
• Attest to their participation in a local jurisdiction’s cannabis equity program Statewide counts of cannabis equity businesses can be challenging because businesses may qualify under one or both of the criteria above, and not all participants in local equity programs seek recognition as an equity business at the state level.

The Department provides financial assistance to cannabis equity businesses through state license fee waivers and deferrals. Waivers became available starting January 1, 2022, but funding was exhausted in February 2024. Deferrals, which began on January 1, 2023, continue to remain available.

Attachment 3

Health of the Cannabis Industry in California

Although license fee waiver funding is depleted, the Department of Cannabis Control continues to review waiver requests to determine eligibility for two state programs that provide financial assistance for cannabis equity businesses:
• The Vendor Compensation Program, administered by the California Department of Tax and Fee Administration, allows cannabis equity retailers to retain 20% of the cannabis excise tax they have collected on retail sales. This program ends on December 31, 2025.
• The Cannabis Equity Tax Credit, administered by the Franchise Tax Board, allows cannabis equity businesses to receive a $10,000 tax credit. This tax credit is available through the 2027 calendar year.
(4) How many equity licensees have been approved by the Department of Cannabis Control.

As of February 3, 2025, there are 2,103 active equity licenses across 42 counties. This total includes 8 cannabis event organizer licenses, which are not associated with a specific local jurisdiction.

Attachment 3

Health of the Cannabis Industry in California

(5) In what counties the state equity licensees are located.

County Number of
Equity Licenses
Alameda 114
Butte 2
Calaveras 17
Contra Costa 4
Del Norte 2
El Dorado 2
Fresno 4
Humboldt 487
Imperial 2
Inyo 3
Kern 12
Kings 1
Lake 35
Lassen 1
Los Angeles 567
Marin 2
Mendocino 267
Merced 1
Mono 2
Monterey 18
Napa 2
Nevada 56
County Number of
Equity Licenses
Orange 6
Riverside 15
Sacramento 77
San Bernardino 10
San Diego 3
San Francisco 67
San Joaquin 1
San Luis Obispo 4
San Mateo 1
Santa Barbara 2
Santa Cruz 28
Shasta 4
Solano 3
Sonoma 32
Stanislaus 6
Tehama 1
Trinity 222
Tulare 2
Ventura 3
Yolo 7
No County Listed* 8
Total 2,103
*“No County Listed” refers to cannabis event organizer licenses, which are not associated with a specific local jurisdiction.

Attachment 3

Health of the Cannabis Industry in California

Cannabis Taxes
(6) The health of the Cannabis Tax Fund, and any future projections of Cannabis Tax Fund revenues.

The Department of Cannabis Control does not manage California’s cannabis taxes, however, the information provided here is the result of consultation with the Department of Finance and California Department of Tax and Fee Administration (CDTFA).

Cannabis Tax Fund
The Governor’s proposed budget, published in January 2025, describes estimated revenues and expenditure allocations for the California Cannabis Tax Fund (3314).

Exhibit 2 includes a detailed accounting for fiscal years 2023-24, 2024-25, and 2025- 26, and below is a summary:
2023-24 2024-25 2025-26
Beginning Balance $469,563 $538,434 $468,205
Annual Cannabis Tax
Revenue**
$629,373 $603,741 $761,903
Total Revenues $1,098,936 $1,142,175 $1,230,108
Total Expenditures $560,502 $673,970 $468,205
Balance of Tax
Receipts
$538,434 $468,205 $619,947
*All figures are in millions
** These figures include costs associated with the Vendor Compensation Program for cannabis equity retailers.

Cannabis Tax Revenues
CDTFA publishes data related to cannabis tax revenues through an open data portal.

This data is available on a quarterly basis and is displayed below:

Attachment 3

Health of the Cannabis Industry in California

Summary of trends:
• Cannabis tax revenue began to rise as businesses became licensed under the state’s regulatory framework in 2018 and continued throughout 2019. • During the pandemic, cannabis tax revenues saw a temporary surge, peaking at over $800 million in fiscal year 2021-22. This increase aligned with nationwide trends for cannabis and other discretionary adult-use products and was further fueled by Americans receiving multiple stimulus checks. • This tax revenue surge has since subsided. Tax revenues have decreased closer to pre-pandemic levels due to a variety of factors, including lower retail sales prices.
• The Governor's Budget projects that cannabis tax revenues will be $762 million in fiscal year 2025-26, approximately 6 percent lower than the peak revenues seen in fiscal year 2021-22. This figure includes the Vendor Compensation Program for equity retailers and reflects the assumption that the cannabis excise tax rate will increase to 19 percent as of July 1, 2025.

Cannabis Tax Policy
California’s cannabis tax policy has evolved over time to simplify administration and enhance industry compliance. Key changes include:
• Effective July 1, 2022, the cultivation tax, which taxed cannabis flowers, leaves, and fresh cannabis plants at various rates per ounce, was eliminated. • As of January 1, 2023, the point of taxation for cannabis products was permanently moved from wholesale to retail, meaning the 15% cannabis excise tax is now collected directly by retailers.
$-
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
2018 2019 2020 2021 2022 2023 2024
Cannabis Market Tax Revenues
Cannabis Tax
Attachment 3

Health of the Cannabis Industry in California

• The cannabis excise tax was established at rate of 15% for three fiscal years, beginning in 2023. Starting July 1, 2025, CDTFA must adjust the excise tax rate every two years, but the new rate may not exceed 19%.

Attachment 3

Health of the Cannabis Industry in California

APPENDIX
Attachment 3

Health of the Cannabis Industry in California

Exhibit 1
Where cannabis businesses are allowed and prohibited throughout the state
Attachment 3

Health of the Cannabis Industry in California

County and City Ordinances on Cannabis Business Activity Alameda County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Alameda
County Allowed Allowed Allowed Allowed Allowed Allowed
Alameda Allowed Allowed Allowed Allowed Limited Allowed Albany Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Berkeley Allowed Allowed Allowed Allowed Allowed Allowed Dublin Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Emeryville Allowed Allowed Allowed Allowed Prohibited Allowed Fremont Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Hayward Allowed Allowed Allowed Allowed Allowed Allowed Livermore Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Newark Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Oakland Allowed Allowed Allowed Allowed Allowed Allowed Piedmont Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Pleasanton Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited San Leandro Allowed Allowed Allowed Allowed Prohibited Allowed Union City Limited Limited Limited Limited Limited Limited Alpine County
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Alpine County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Amador County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Amador
County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Amador City Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Ione Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Jackson Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Plymouth Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Sutter Creek Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Attachment 3

Health of the Cannabis Industry in California

Butte County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Butte County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Biggs Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Chico Allowed Allowed Allowed Allowed Prohibited Allowed Gridley Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Oroville Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Paradise Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Calaveras County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Calaveras
County Allowed Prohibited Allowed Prohibited Allowed Allowed Angels Camp Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited City and County of San Francisco
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing City and
County of San
Francisco
Allowed Allowed Allowed Allowed Allowed Allowed
Colusa County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Colusa
County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Colusa Allowed Allowed Allowed Allowed Allowed Allowed
Williams Prohibited Prohibited Allowed Allowed Allowed Allowed Attachment 3

Health of the Cannabis Industry in California

Contra Costa County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Contra Costa
County Limited Allowed Allowed Allowed Limited Allowed
Antioch Allowed Allowed Allowed Allowed Allowed Allowed Brentwood Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Clayton Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Concord Limited Limited Limited Limited Prohibited Allowed Danville Prohibited LimitedMedical Only Prohibited Prohibited Prohibited Prohibited El Cerrito Allowed Prohibited Prohibited Prohibited Prohibited Prohibited Hercules Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Lafayette Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Martinez Limited Limited Limited Limited Prohibited Limited Moraga Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Oakley Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Orinda Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Pinole Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Pittsburg Prohibited Prohibited Allowed Allowed Prohibited Allowed Pleasant Hill Prohibited LimitedMedical Only Prohibited Prohibited Prohibited Prohibited Richmond Allowed Allowed Allowed Allowed Allowed Allowed San Pablo Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited San Ramon Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Walnut Creek Prohibited Limited Prohibited Prohibited Prohibited Prohibited Del Norte County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Del Norte
County Allowed Prohibited Prohibited Allowed Allowed Prohibited Crescent City Allowed Allowed Allowed Allowed Limited Allowed El Dorado County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing El Dorado
County Allowed Allowed Allowed Allowed Allowed Allowed
Placerville Allowed Allowed Allowed Prohibited Prohibited Allowed South Lake
Tahoe Allowed Allowed Allowed Allowed Allowed Allowed
Attachment 3

Health of the Cannabis Industry in California

Fresno County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Fresno
County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Clovis Prohibited Prohibited Prohibited Prohibited Prohibited Allowed Coalinga Allowed Allowed Allowed Allowed Allowed Allowed Firebaugh Allowed Allowed Allowed Allowed Allowed Allowed Fowler Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Fresno Allowed Allowed Allowed Allowed Limited Allowed
Huron Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Kerman Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Kingsburg Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Mendota Allowed Allowed Allowed Allowed Allowed Allowed Orange Cove Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Parlier Allowed Allowed Allowed Allowed Allowed Allowed Reedley Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited San Joaquin Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Sanger Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Selma Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Glenn County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Glenn County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Orland Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Willows Allowed Allowed Prohibited Prohibited Prohibited Prohibited Humboldt County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Humboldt
County Allowed Allowed Allowed Allowed Allowed Allowed
Arcata Limited Limited Allowed Allowed Allowed Allowed
Blue Lake Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Eureka Allowed Allowed Allowed Allowed Allowed Allowed
Ferndale Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Fortuna Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Rio Dell Allowed Allowed Allowed Allowed Allowed Allowed Trinidad Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Attachment 3

Health of the Cannabis Industry in California

Imperial County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Imperial
County Allowed Allowed Allowed Allowed Allowed Allowed
Brawley Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Calexico Allowed Allowed Allowed Allowed Limited Allowed Calipatria Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited El Centro Allowed Prohibited Prohibited Prohibited Prohibited Prohibited Holtville Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Imperial Allowed Prohibited Prohibited Prohibited Prohibited Prohibited Westmorland Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Inyo County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Inyo County Allowed Allowed Allowed Allowed Allowed Allowed Bishop Allowed Allowed Prohibited Prohibited Prohibited Prohibited Kern County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Kern County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Arvin Prohibited Allowed Allowed Allowed Limited Allowed Bakersfield Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited California City Allowed Allowed Allowed Allowed Allowed Allowed Delano Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Maricopa Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited McFarland Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Ridgecrest Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Shafter Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Taft Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Tehachapi Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Wasco Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Attachment 3

Health of the Cannabis Industry in California

Kings County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Kings County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Avenal Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Corcoran Limited Limited Prohibited Prohibited Prohibited Limited Hanford Limited Limited Allowed Allowed Limited Allowed Lemoore Allowed Allowed Allowed Allowed Allowed Allowed Lake County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Lake County Allowed Prohibited Allowed Allowed Allowed Allowed Clearlake Allowed Allowed Allowed Allowed Allowed Allowed Lakeport Prohibited Allowed Allowed Allowed Limited Allowed Lassen County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Lassen
County Allowed Prohibited Prohibited Prohibited Prohibited Allowed Susanville Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Los Angeles County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Los Angeles
County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Agoura Hills Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Alhambra Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Arcadia Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Artesia Prohibited Allowed Prohibited Prohibited Prohibited Prohibited Avalon
(Catalina
Island)
Prohibited LimitedMedical Only Prohibited Prohibited Prohibited Prohibited Azusa Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Baldwin Park Allowed Prohibited Allowed Allowed Limited Prohibited Bell Prohibited Prohibited LimitedMedical Only
Limited-Medical
Only
LimitedMedical OnlyLimitedMedical Only
Bell Gardens Limited Prohibited Prohibited Prohibited Prohibited Prohibited Bellflower Allowed Allowed Allowed Allowed Allowed Allowed Attachment 3

Health of the Cannabis Industry in California

Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Beverly Hills Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Bradbury Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Burbank Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Calabasas Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Carson Prohibited Prohibited Allowed Allowed Limited Allowed Cerritos Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Claremont Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Commerce Prohibited Allowed Allowed Allowed Limited Allowed Compton Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Covina Limited Prohibited Prohibited Prohibited Prohibited Limited Cudahy Prohibited LimitedMedical Only
LimitedMedical OnlyLimited-Medical
Only
LimitedMedical OnlyLimitedMedical Only
Culver City Allowed Allowed Allowed Allowed Limited Allowed Diamond Bar Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Downey Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Duarte Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited El Monte Allowed Allowed Allowed Allowed Limited Allowed El Segundo Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Gardena Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Glendale Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Glendora Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Hawaiian
Gardens Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Hawthorne Limited Limited Allowed Allowed Allowed Allowed Hermosa
Beach Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Hidden Hills Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Huntington
Park
LimitedMedical Only Allowed Prohibited Allowed Allowed Prohibited Industry Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Inglewood Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Irwindale Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited La Cañada
Flintridge Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited La Habra
Heights Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited La Mirada Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited La Puente Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited La Verne Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Lakewood Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Lancaster Allowed Allowed Allowed Allowed Allowed Allowed Attachment 3

Health of the Cannabis Industry in California

Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Lawndale Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Lomita Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Long Beach Allowed Allowed Allowed Allowed Allowed Allowed Los Angeles Allowed Allowed Allowed Allowed Allowed Allowed Lynwood Prohibited Allowed Allowed Allowed Limited Allowed Malibu Allowed Allowed Prohibited Prohibited Prohibited Prohibited Manhattan
Beach Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Maywood Allowed Allowed Allowed Allowed Limited Allowed Monrovia Prohibited Prohibited Prohibited Prohibited Prohibited Allowed Montebello Prohibited Allowed Allowed Allowed Allowed Allowed Monterey
Park Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Norwalk Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Palmdale Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Palos Verdes
Estates Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Paramount Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Pasadena Allowed Allowed Allowed Allowed Allowed Allowed Pico Rivera Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Pomona Allowed Allowed Allowed Allowed Limited Allowed
Rancho Palos
Verdes Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Redondo
Beach Limited Prohibited Prohibited Prohibited Prohibited Prohibited Rolling Hills Prohibited LimitedMedical Only
LimitedMedical Only Prohibited Prohibited Prohibited
Rolling Hills
Estates Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Rosemead Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited San Dimas Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited San Fernando Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited San Gabriel Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited San Marino Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Santa Clarita Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Santa Fe
Springs Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Santa Monica Limited Prohibited Prohibited Prohibited Prohibited Prohibited Sierra Madre Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Signal Hill Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited South El
Monte Limited Prohibited Prohibited Prohibited Prohibited Prohibited Attachment 3

Health of the Cannabis Industry in California

Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing South Gate Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited South
Pasadena Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Temple City Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Torrance Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Vernon Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Walnut Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited West Covina Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited West
Hollywood Allowed Allowed Prohibited Prohibited Prohibited Prohibited Westlake
Village Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Whittier Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Madera County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Madera
County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Chowchilla Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Madera Allowed Allowed Allowed Allowed Allowed Allowed
Marin County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Marin County Prohibited LimitedMedical Only Prohibited Prohibited Prohibited Prohibited Belvedere Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Corte Madera Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Fairfax LimitedMedical Only Allowed Prohibited Prohibited Prohibited Prohibited Larkspur Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Mill Valley Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Novato Prohibited Allowed Allowed Allowed Limited Allowed Ross Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited San Anselmo Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited San Rafael Prohibited Allowed Allowed Allowed Prohibited Allowed Sausalito Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Tiburon Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Attachment 3

Health of the Cannabis Industry in California

Mariposa County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Mariposa
County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Mendocino County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Mendocino
County Allowed Allowed Allowed Allowed Allowed Allowed
Fort Bragg Limited Allowed Limited Limited Limited Limited Point Arena Allowed Prohibited Allowed Allowed Allowed Allowed Ukiah Allowed Allowed Allowed Allowed Allowed Allowed
Willits Allowed Allowed Allowed Allowed Allowed Allowed Merced County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Merced
County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Atwater Allowed Allowed Allowed Allowed Limited Allowed Dos Palos Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Gustine Allowed Allowed Allowed Allowed Limited Prohibited Livingston Prohibited Prohibited Prohibited Allowed Limited Allowed Los Banos Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Merced Limited Allowed Allowed Allowed Limited Allowed
Modoc County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Modoc
County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Alturas Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Mono County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Mono County Allowed Prohibited Allowed Allowed Allowed Allowed Mammoth
Lakes Allowed Allowed Allowed Limited Limited Allowed
Attachment 3

Health of the Cannabis Industry in California

Monterey County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Monterey
County Allowed Prohibited Allowed Allowed Allowed Allowed Carmel-bythe-Sea Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Del Rey Oaks Limited Allowed Allowed Allowed Limited Allowed Gonzales Prohibited Prohibited Prohibited Limited-Medical Only
LimitedMedical Only Prohibited
Greenfield Allowed Allowed Allowed Allowed Limited Allowed King City Allowed Allowed Allowed Allowed Limited Allowed Marina Allowed Allowed Allowed Allowed Allowed Allowed
Monterey Limited Limited Limited Prohibited Prohibited Limited Pacific Grove Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Salinas Allowed Allowed Allowed Allowed Limited Allowed Sand City Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Seaside Allowed Allowed Allowed Allowed Allowed Allowed Soledad Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Napa County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Napa County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited American
Canyon Prohibited Allowed Allowed Allowed Limited Allowed Calistoga Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Napa Limited Limited Prohibited Limited Prohibited Prohibited St. Helena Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Yountville Prohibited Allowed Prohibited Prohibited Prohibited Prohibited Nevada County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Nevada
County Prohibited Prohibited Allowed Prohibited LimitedMedical Only Prohibited Grass Valley Allowed Allowed Allowed Allowed Limited Allowed Nevada City Allowed Allowed Allowed Allowed Limited Allowed Truckee Prohibited Allowed Prohibited Prohibited Prohibited Prohibited Attachment 3

Health of the Cannabis Industry in California

Orange County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Orange
County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Aliso Viejo Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Anaheim Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Brea Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Buena Park Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Costa Mesa Allowed Allowed Allowed Allowed Prohibited Allowed Cypress Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Dana Point Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Fountain
Valley Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Fullerton Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Garden Grove Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Huntington
Beach Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Irvine Prohibited Prohibited Prohibited Prohibited Prohibited Allowed La Habra Prohibited Allowed Allowed Prohibited Prohibited Allowed La Palma Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Laguna
Beach Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Laguna Hills Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Laguna
Niguel Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Laguna
Woods Allowed Prohibited Prohibited Prohibited Prohibited Prohibited Lake Forest Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Los Alamitos Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Mission Viejo Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Newport
Beach Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Orange Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Placentia Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Rancho Santa
Margarita Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited San Clemente Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited San Juan
Capistrano Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Santa Ana Allowed Allowed Allowed Allowed Allowed Allowed Seal Beach Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Stanton Allowed Allowed Allowed Allowed Limited Allowed Attachment 3

Health of the Cannabis Industry in California

Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Tustin Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Villa Park Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Westminster Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Yorba Linda Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Placer County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Placer County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Auburn Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Colfax Allowed Allowed Allowed Allowed Limited Allowed
Lincoln Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Loomis Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Rocklin Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Roseville Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Plumas County and Incorporated Cities
Jurisdiction Retail
(Storefront)
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(Delivery) Distribution Manufacturing Cultivation Testing Plumas
County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Portola Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Riverside County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Riverside
County Allowed Allowed Allowed Allowed Limited Allowed
Banning Allowed Prohibited Allowed Allowed Limited Allowed Beaumont Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Blythe Allowed Prohibited Allowed Allowed Allowed Allowed Calimesa Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Canyon Lake Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Cathedral City Allowed Allowed Allowed Allowed Allowed Allowed Coachella Limited Allowed Allowed Allowed Allowed Allowed Corona Allowed Allowed Allowed Allowed Prohibited Allowed Desert Hot
Springs Allowed Allowed Allowed Allowed Allowed Allowed Eastvale Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Attachment 3

Health of the Cannabis Industry in California

Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Hemet Allowed Allowed Allowed Allowed Limited Allowed
Indian Wells Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Indio Allowed Limited Prohibited Prohibited Prohibited Prohibited Jurupa Valley Allowed Prohibited Allowed Allowed Limited Allowed La Quinta Prohibited LimitedMedical Only Prohibited Prohibited Prohibited Prohibited Lake Elsinore Allowed Prohibited Allowed Allowed Limited Allowed Menifee Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Moreno Valley Allowed Allowed Allowed Allowed Allowed Allowed Murrieta Prohibited Prohibited Prohibited Prohibited Prohibited Allowed Norco Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Palm Desert Allowed Allowed Allowed Allowed Allowed Allowed Palm Springs Allowed Allowed Allowed Allowed Allowed Allowed Perris Allowed Allowed Allowed Allowed Limited Allowed
Rancho
Mirage Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Riverside Allowed Allowed Allowed Allowed Prohibited Allowed San Jacinto Allowed Prohibited Allowed Allowed Allowed Allowed Temecula Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Wildomar Allowed Allowed Allowed Allowed Allowed Allowed Sacramento County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Sacramento
County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Citrus Heights Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Elk Grove Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Folsom Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Galt Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Isleton Allowed Allowed Allowed Allowed Limited Allowed Rancho
Cordova Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Sacramento Allowed Allowed Allowed Allowed Limited Allowed San Benito County and Incorporated Cities
Jurisdiction Retail
(Storefront)
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(Delivery) Distribution Manufacturing Cultivation Testing San Benito
County Limited Allowed Allowed Allowed Allowed Allowed
Attachment 3

Health of the Cannabis Industry in California

Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Hollister Allowed Allowed Allowed Allowed Allowed Allowed San Juan
Bautista Allowed Allowed Allowed Allowed Allowed Allowed San Bernardino County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing San
Bernardino
County
Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Adelanto Allowed Allowed Allowed Allowed Allowed Allowed Apple Valley Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Barstow Allowed Allowed Allowed Allowed Limited Allowed Big Bear Lake Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Chino Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Chino Hills Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Colton Prohibited Prohibited Prohibited Allowed Limited Allowed Fontana Limited Limited Prohibited Prohibited Prohibited Prohibited Grand Terrace Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Hesperia Prohibited LimitedMedical Only Prohibited Prohibited Prohibited Prohibited Highland Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Loma Linda Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Montclair Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Needles Allowed Allowed Allowed Allowed Allowed Allowed Ontario Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Rancho
Cucamonga Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Redlands Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Rialto Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited San
Bernardino Allowed Limited Limited Limited Limited Limited Twentynine
Palms Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Upland Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Victorville Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Yucaipa Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Yucca Valley Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Attachment 3

Health of the Cannabis Industry in California

San Diego County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing San Diego
County Allowed Prohibited Allowed Allowed Allowed Prohibited Carlsbad Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Chula Vista Allowed Limited Allowed Allowed Limited Allowed Coronado Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Del Mar Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited El Cajon Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Encinitas Allowed Allowed Allowed Allowed Allowed Prohibited Escondido Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Imperial
Beach Allowed Allowed Prohibited Prohibited Prohibited Prohibited La Mesa Allowed Prohibited Allowed Allowed Allowed Allowed Lemon Grove Allowed Allowed Allowed Allowed Allowed Prohibited National City Allowed Allowed Allowed Allowed Allowed Allowed Oceanside Prohibited Limited Allowed Allowed Allowed Allowed Poway Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited San Diego Allowed Limited Allowed Allowed Limited Allowed San Marcos Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Santee Limited Limited Limited Limited Limited Limited
Solana Beach Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Vista Allowed Prohibited Allowed Allowed Prohibited Allowed San Joaquin County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing San Joaquin
County Prohibited Allowed Allowed Allowed Allowed Allowed Escalon Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Lathrop Allowed Prohibited Prohibited Prohibited Prohibited Prohibited Lodi Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Manteca Limited Prohibited Prohibited Prohibited Prohibited Prohibited Ripon Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Stockton Allowed Allowed Allowed Allowed Limited Allowed Tracy Limited Allowed Allowed Allowed Limited Allowed
Attachment 3

Health of the Cannabis Industry in California

San Luis Obispo County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing San Luis
Obispo
County
Prohibited Allowed Allowed Allowed Limited Allowed
Arroyo
Grande Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Atascadero Prohibited Allowed Prohibited Prohibited Prohibited Allowed Grover Beach Allowed Allowed Allowed Allowed Allowed Allowed Morro Bay Allowed Allowed Allowed Prohibited Prohibited Prohibited Paso Robles Prohibited Limited Prohibited Prohibited Prohibited Prohibited Pismo Beach Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited San Luis
Obispo Allowed Allowed Allowed Allowed Limited Allowed
San Mateo County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing San Mateo
County Prohibited Prohibited Prohibited Prohibited Limited Prohibited Atherton Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Belmont Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Brisbane Prohibited Allowed Allowed Allowed Prohibited Allowed Burlingame Prohibited Allowed Prohibited Prohibited Prohibited Prohibited Colma Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Daly City Allowed Allowed Prohibited Prohibited Prohibited Allowed East Palo Alto Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Foster City Prohibited Prohibited Prohibited Prohibited Prohibited Allowed Half Moon
Bay Prohibited Prohibited Prohibited Prohibited Limited Prohibited Hillsborough Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Menlo Park Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Millbrae Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Pacifica Allowed Allowed Allowed Allowed Prohibited Allowed Portola Valley Prohibited Prohibited Prohibited Prohibited Limited Prohibited Redwood City Allowed Allowed Prohibited Prohibited Limited Prohibited San Bruno Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited San Carlos Prohibited Prohibited Allowed Allowed Allowed Allowed San Mateo Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited South San
Francisco Prohibited Allowed Allowed Allowed Limited Allowed Attachment 3

Health of the Cannabis Industry in California

Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Woodside Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Santa Barbara County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Santa
Barbara
County
Allowed Allowed Allowed Allowed Allowed Allowed
Buellton Prohibited Prohibited Prohibited Prohibited Prohibited Allowed Carpinteria Prohibited Limited Limited Limited Prohibited Limited Goleta Limited Allowed Allowed Allowed Limited Allowed
Guadalupe Allowed Allowed Allowed Allowed Limited Allowed Lompoc Allowed Allowed Allowed Allowed Limited Allowed
Santa
Barbara Limited Limited Limited Limited Limited Limited Santa Maria Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Solvang LimitedMedical Only
LimitedMedical OnlyLimitedMedical OnlyLimited-Medical Only
LimitedMedical OnlyLimitedMedical Only
Santa Clara County and Incorporated Cities
Jurisdiction Retail
(Storefront)
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(Delivery) Distribution Manufacturing Cultivation Testing Santa Clara
County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Campbell Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Cupertino Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Gilroy Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Los Altos Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Los Altos Hills Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Los Gatos Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Milpitas Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Monte Sereno Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Morgan Hill Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Mountain
View Allowed Allowed Prohibited Prohibited Prohibited Prohibited Palo Alto Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited San Jose Allowed Allowed Allowed Allowed Limited Allowed Santa Clara Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Saratoga Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Sunnyvale Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Attachment 3

Health of the Cannabis Industry in California

Santa Cruz County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Santa Cruz
County Allowed Allowed Allowed Allowed Allowed Prohibited Capitola Allowed Prohibited Prohibited Prohibited Prohibited Allowed Santa Cruz Allowed Allowed Allowed Allowed Allowed Allowed Scotts Valley Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Watsonville Allowed Allowed Allowed Allowed Allowed Allowed Shasta County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Shasta
County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Anderson Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Redding Limited Limited Allowed Allowed Limited Allowed Shasta Lake Allowed Allowed Allowed Allowed Limited Allowed Sierra County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Sierra County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Loyalton Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Siskiyou County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Siskiyou
County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Dorris Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Dunsmuir Allowed Allowed Allowed Allowed Limited Allowed Etna Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Fort Jones Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Montague Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Mount Shasta Allowed LimitedMedical Only Allowed Allowed Allowed Allowed Tulelake Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Weed Allowed Allowed Prohibited Prohibited Limited Prohibited Yreka Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Attachment 3

Health of the Cannabis Industry in California

Solano County and Incorporated Cities
Jurisdiction Retail
(Storefront)
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(Delivery) Distribution Manufacturing Cultivation Testing Solano
County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Benicia Allowed Allowed Allowed Allowed Limited Allowed Dixon Allowed Allowed Prohibited Allowed Limited Allowed Fairfield Allowed Allowed Prohibited Allowed Prohibited Allowed Rio Vista Allowed Allowed Allowed Allowed Limited Allowed Suisun City Allowed Allowed Allowed Allowed Limited Allowed Vacaville Allowed Allowed Allowed Allowed Prohibited Allowed Vallejo Allowed Allowed Allowed Allowed Allowed Allowed Sonoma County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Sonoma
County Allowed Allowed Allowed Allowed Allowed Allowed
Cloverdale Allowed Allowed Allowed Allowed Allowed Allowed Cotati Allowed Allowed Allowed Allowed Allowed Allowed
Healdsburg Limited Allowed Allowed Allowed Prohibited Allowed Petaluma Prohibited Allowed Allowed Allowed Prohibited Allowed Rohnert Park Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Santa Rosa Allowed Allowed Allowed Allowed Limited Allowed Sebastopol Allowed Allowed Allowed Allowed Limited Allowed Sonoma Allowed Allowed Allowed Allowed Prohibited Allowed Windsor Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Stanislaus County and Incorporated Cities
Jurisdiction Retail
(Storefront)
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(Delivery) Distribution Manufacturing Cultivation Testing Stanislaus
County Allowed Allowed Allowed Allowed Allowed Allowed
Ceres Allowed Allowed Allowed Allowed Limited Allowed
Hughson Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Modesto Allowed Limited Allowed Allowed Limited Allowed Newman Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Oakdale Allowed Prohibited Allowed Allowed Allowed Allowed Patterson Allowed Prohibited Allowed Allowed Limited Allowed Riverbank Allowed Allowed Allowed Allowed Allowed Allowed Turlock Limited Limited Allowed Allowed Limited Allowed Attachment 3

Health of the Cannabis Industry in California

Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Waterford Allowed Allowed Allowed Allowed Allowed Allowed Sutter County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Sutter County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Live Oak Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Yuba City Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Tehama
County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Corning Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Red Bluff Limited Limited Limited Limited Limited Limited Tehama Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Trinity County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Trinity County Prohibited Allowed Allowed Allowed Allowed Allowed Tulare County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Tulare County LimitedMedical Only Prohibited Prohibited Prohibited LimitedMedical Only Prohibited Dinuba Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Exeter Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Farmersville Allowed Allowed Allowed Allowed Limited Allowed Lindsay Allowed Allowed Allowed Allowed Limited Allowed Porterville Allowed Allowed Prohibited Prohibited Prohibited Prohibited Tulare Allowed Prohibited Prohibited Prohibited Prohibited Prohibited Visalia Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Woodlake Allowed Allowed Allowed Allowed Limited Allowed Tuolumne County and Incorporated Cities
Jurisdiction Retail
(Storefront)
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(Delivery) Distribution Manufacturing Cultivation Testing Tuolumne
County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Sonora Allowed Allowed Prohibited Allowed Prohibited Allowed Attachment 3

Health of the Cannabis Industry in California

Ventura County and Incorporated Cities
Jurisdiction Retail
(Storefront)
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(Delivery) Distribution Manufacturing Cultivation Testing Ventura
County Prohibited Prohibited Allowed Prohibited Limited Prohibited Camarillo Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Fillmore Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Moorpark Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Ojai Allowed Allowed Prohibited Allowed Prohibited Allowed Oxnard Allowed Prohibited Allowed Allowed Limited Allowed Port Hueneme Allowed Allowed Allowed Allowed Limited Allowed Santa Paula Prohibited Prohibited Prohibited Prohibited Prohibited Allowed Simi Valley Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Thousand
Oaks
LimitedMedical Only Prohibited Prohibited Prohibited Prohibited Allowed Ventura Allowed Allowed Allowed Allowed Prohibited Allowed Yolo County and Incorporated Cities
Jurisdiction Retail
(Storefront)
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(Delivery) Distribution Manufacturing Cultivation Testing Yolo County Allowed Allowed Allowed Allowed Allowed Allowed Davis Allowed Allowed Allowed Allowed Prohibited Allowed West
Sacramento Allowed Allowed Allowed Allowed Limited Allowed Winters Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Woodland Limited Prohibited Limited Limited Prohibited Limited Yuba County and Incorporated Cities
Jurisdiction Retail
(Storefront)
Retail
(Delivery) Distribution Manufacturing Cultivation Testing Yuba County Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Marysville Allowed Allowed Allowed Allowed Limited Allowed Wheatland Prohibited Prohibited Prohibited Prohibited Prohibited Prohibited Attachment 3

Health of the Cannabis Industry in California

Exhibit 2
California Cannabis Tax Fund (3314) estimated revenues and expenditure allocation
Attachment 3

Health of the Cannabis Industry in California

California Cannabis Tax Fund (3314) Estimated Revenues and Expenditure Allocations
2025-26 GOVERNORS BUDGET – GOP 24 GOVERNMENT OPERATIONS 7600 California Department of Tax and Fee Administration - Continued California Cannabis Tax Fund (3314) Estimated Revenues & Expenditure Allocations REVENUES:
2023-24* 2024-25* 2025-26*
Beginning Balance $469,563 $538,434 $468,205
Cannabis Tax 629,373 603,741 761,903
Total Revenues $1,098,936 $1,142,175 $1,230,108
Allocation 1: Regulatory and Administrative
Governor's Office of Business and Economic Development (Equity Program) 15,758 15,765 15,766 Department of Fish and Wildlife - 10,681 9,456
Department of Pesticide Regulation - 2,752 2,752
State Water Resources Control Board - 17,739 17,768
Employment Development Department - 1,637 1,637
Department of Tax and Fee Administration - 10,666 10,698 State Controller's Office - 489 489
Statewide General Administration 13,181 13,807 21,390
Total Allocation 1 $28,939 $73,536 $79,956
Allocation 2: Specified Allocations for Research and Other Programs Public University/Universities in California 10,000 10,000 10,000 Governor’s Office of Business and Economic Development 50,000 50,000 50,000 University of San Diego Center for Medicinal Cannabis Research 2,000 2,000 2,000 Total Allocation 2 $62,000 $62,000 $62,000
Allocation 3: Percentage of Remaining Revenue Collection Youth Education Prevention, Early Intervention and Treatment Account 371,737 323,060 280,923 Environmental Restoration and Protection Account 123,913 107,687 93,641 State and Local Government Law Enforcement Account 123,913 107,687 93,641 Total Allocation 3 $619,563 $538,434 $468,205
Based on prior year actual tax collection
Less Funding Provided by General Fund per RTC 34019.1 -150,000 - - Total Expenditures $560,502 $673,970 $610,161
Balance of Tax Receipts $538,434 $468,205 $619,947
Note: Cannabis Tax Revenue includes an estimated reduction of $4.4 million in 2023-24, $4.1 million in 2024-25, and $2 million in 2025- 26 related to equity retailer relief.
* Dollars in thousands, except in Salary Range. Numbers may not add or match to other statements due to rounding of budget details Attachment 3

Attachment 4

Survey Results: Cannabis
 Survey Info - This survey was sent on behalf of the City of Arroyo Grande to the FlashVote community for Arroyo Grande, CA.

These FlashVote results are shared with local of cials
427
Total Participants
420 of 998 initially invited (42%)
7 others
Margin of error: ± 5%
Applied Filter:

Locals only
Participants for
lter:
298
Started:

Nov 19, 2025 11:06am PST
Ended:

Nov 21, 2025 11:00am PST
Target Participants:

All Arroyo Grande
Q1 The City of Arroyo Grande is exploring whether to allow commercial cannabis businesses - such as retail stores, cultivation, manufacturing, distribution, delivery, or testing labs - within City limits.

Would you support or oppose the City allowing some form of commercial cannabis businesses within City limits?
(298 responses by )
Response Time (ho…
1 9
17 25
33 41
49 0
100
200
Options Locals (298)
Strongly Oppose (1) 36% (107)
Somewhat Oppose (2) 9% (27)
Neutral (3) 13% (39)
Somewhat Support (4) 17% (52)
Strongly Support (5) 23% (69)
Not Sure 1% (4)
Attachment 5

Q2 If the City allowed commercial cannabis, which of the following types of businesses should be considered? (Choose all that apply)
(274 responses by )
Options Locals (274)
Retail (storefront sales to adults) 55% (151)
Delivery-only retail 42% (115)
Manufacturing (processing cannabis products) 31% (84)
Distribution (transporting cannabis between licensed businesses) 40% (109) Indoor Cultivation (growing cannabis plants indoor) 34% (93) Outdoor Cultivation (growing cannabis plants outdoor) 21% (58) Testing laboratories 41% (111)
Lounge (retail with on-site cannabis use) 23% (62)
Temporary cannabis event (1-4 day event with on-site use and sale) 23% (62) Attachment 4

Q3 Which of the following restrictions on cannabis sales in Arroyo Grande would you support, if any? (Choose all that apply)
(275 responses by )
Responses for "Other":
cannabis
allow
support sale
grover
city tax ag
want permit retail
required
public
use
business please
restrictive
beach
total
enough
police
smell three
fine
far
school
special
absolutely
bad drugs
limits
arroyo
kind
grande
oppose
village
dollars
community
hours
drive
collect
outlets
area
specific
Options Locals (275)
Two permits or less issued to sell cannabis 33% (92)
Three permits or more issued to sell cannabis 18% (49)
Hours of operation that are consistent with State regulations (6am – 10pm) 53% (147) Cannabis retailers should collect an extra local tax on cannabis sales 47% (129) Cannabis retailers should not collect an extra local tax on cannabis sales 11% (29) Shouldn’t have special restrictions on cannabis sales in Arroyo Grande 15% (41) Other: 23% (63)
Attachment 4

three or fewer permits issued
Should not allow cannabis sales
I would say no permits allowed. Grover is down the street and totally accessible for AG residents I don't know
Restricted hours 8 am - 4 pm
None
If law enf is a concern, tax / lrg, ltd license fee for enforcement 1000% NO Cannabis. Think about the kids not the DOLLARS! Taxes to support public safety. Specifically fire and police. 911 system will be impacted heavily.

Absolutely NO DRUGS here in Arroyo Grande!!!! The THC levels are so high they cause psychosis!!!!!! No cannabis in AG.

None
None!
I don’t support any cannabis in AG. Total disaster. They can drive to SLO, take bus or ride bike As far from residential and school properties as possible; Far away from the village of AG none
Strict energy efficiency requirements for indoor growers will not support cannabis in area
I do Not support any kind of cannabis sales in a.g. !!
Against it. Plenty of places nearby and we can find other sources of revenue for this very special.

No minors sales ; if cited more than 3 times/year- revocation of permit There are ENOUGH weed stores in GROVER!!!
More limited hours, like most retail spaces.

Should collect normal sales tax. not more than 4 retail outlets.

No sales allowed
Same as Grover Beach to drive healthy competition
None
None
Mail order online only
where in the city does the distance restrictions from schools etc, allow cannabis.

Three outlets would be fine but there may not be enough demand for all to make any money.

I do not support the idea of selling cannabis in the city limits Only allow if the city collects tax dollars
Drugs are bad.

Loaded questions and survey bias
Do not allow any cannabis businesses.

Specific locations such as rural area where there’s no smell. And no use in public. Tax the hell o Do not allow cannabis retailers in this city
No cannibus sales.

Don't allow it.

Strongly oppose cannabis facilities of any kind in Arroyo Grande.

Attachment 4

Don't allow any sale at all. People can get cannabis in Grover Beach.

None
No permits
None
I absolutely oppose Canabis in the community
None never not any please
Outdoor cultivation for personal use, no special screening required.

Total restriction- no cannabis
I don't want to see this type of business in the City, its bad enough that they're down in Grover I do not support retail sales of cannabis in AG
Do better. The extra tax isn’t with the added burden
Don't want ANY of this.
don't have them
The most restrictive requirements, please.

No Cannabis at all. Medical only prescribed by doctors and delivered to patient homes.

We need more fines and policing for use in public. I don't want to smell it in public.

Nowhere near the Village
No permits!!!!
Model it the same as Grover Beach
I dont want any cannabis business here.

Do not support cannabis at all
Please don't allow this in our community
Attachment 4

Q4 If storefront retail cannabis stores (marijuana dispensaries) were allowed in Arroyo Grande, where would be the best places to locate them? (Choose all that apply) (272 responses by )
Responses for "Other":

Where ever zoning allows those businesses i.e. retail, industrial, agricultural Downtown arroyo grande
As far from the city center as possible
Nowhere
wherever
nowhere
school grand
allowvillage cannabis
grover near cityarea
park town
kid
away busy
halcyon
possible
stores
arroyo
anywhere
retail
best
zoned
keep
frontage residential
ag
traffic
industrial
far
hall
road
location
along
way
el
want
real
camino
Options Locals (272)
Along the E. Grand Ave Corridor 42% (114)
West Branch shopping centers 36% (97)
East of the Village 19% (51)
Along Halcyon Road 33% (91)
Other: 29% (80)
Attachment 4

At city hall
Not on Halcyon Road - it is congested enough with poor markings that are hard to see at night/rain None
I don't want to impose my ideas for business owners who should be free to choose what is best None
None - Delivery only
None
Over by Courtland and E Grand, closer to Grover. Not an area where kids walk home to/from school.

Do NOT ALLOW
Nowhere
As close to Grover as possible.
frontage road by the freeway
None. Our kids already have major mental illness issues. Quit using them for $. SHAME ON YOU!!!! anywhere it doesn't disturb flow of traffic, and has ample parking Don’t allow storefront retail cannabis stores
None
None
No cannabis in AG
As far down E. Grand as possible closest to Grover Beach Plenty of problematic traffic through AG corridor as it is. NO STORES! none
nowhere in city
No Cannabis in arroyo grande!!!
Neither
No where
Nowhere!!
No opinion
Nowhere
Not where traditional retail is
Away from schools, please. Central to the city, not out of the way.

Nowhere would be best
East village nice, but too busy and too many students. Others are great options! None
Nowhere
none
Mail order online only
Left up to city council.

Commercial/Industrial zoned areas
Nowhere near any schools
Drugs are evil.

On the outskirts of town. I don’t want the at all!!!!
Along Station Way
Attachment 4

Shouldn't be allowed
Do not allow any at all.

I just can’t think of anywhere in our town, they should be.

El camino real
Nowhere
No cannabis stores
Halcyon Rd south of The Pike
Away from family shopping areas and residential neighborhoods Don't allow it.

Strongly oppose cannabid facilities of any kind in Arroyo Grande.

None at all
If you're gonna have it, do it in the village
No where
NO WHERE!!!
Out in the middle of nowhere, not by residence or schools or people.

Out in the county
Nowhere at all
No where
In San Luis Obispo, as they are.

El Camino Real frontage between Brisco and Oak Park Blvd No place.

Keep it in Grover
In the village next to town hall
Town of halcyon
I would be extremely disappointed if anywhere near the village or kid focused locations (parks etc) No where near schools, libraries, parks or housing.

Away from residential areas and routes frequented by kids going to/from school.

NOT on E Grand Ave!!!NOT near Berry Gardens! In a more rural location In the village
I do not support cannabis
None! Keep it out of our community!
any areas should be fair game. Up on West Branch, the Village, or along Grand.

Attachment 4

Q5 Any other comments or suggestions about commercial cannabis in Arroyo Grande? (114 responses by )
I appreciate the consideration of allowing commercial cannabis in AG. Personally, I view it as much less detrimental to the community than alcohol permits, which we question hardly at all.

Strongly oppose
Make sure storefronts aren't tacky or sweet looking
though a great opportunity for tax revenue, there are environmental impacts to growing, especially with water need and potential leeching into the soil that still has not been fully studied. This should be a cause of concern for our Agricultural areas. There should also be AT LEAST as strict of concerns as for the sale of Alcohol, and all state regulations should be followed with local regulations possibly being stricter.

We should not have cannabis sold
There are so many dispensaries and delivery options available already. Plenty of liquor and smoke shops too. We don't need this. What you do need is a place for kids and families to be - bowling alleys, ice rinks, public markets, etc.

If you decide to start that I would say keep on Grand Avenue close to Grover Beach. what we really need in Arroyo grande is a roller skating rink I think the old rite aid store should be changed into a roller skating rink it already has bathrooms and it used to have an ice cream station in there could be changed into a snack bar how about that and you can sell marijuana right there in the roller skating rink two people 18 years and above and then have a little separate room where people could go in and get high and then go roller skate I think that would be cool Use any taxes to repair roads in Arroyo Grande.

Not in favor of Cannabis sales in city. The way the survey is slanted it is already predetermined to be approved. The city needs to mange finances better rather than chase every new shiny fish to get revenue. The down stream costs need to be considered.

Please don't burden East Grand and Halcyon with this type of business.

I think this is a no brainer.

I wouldn't like any kind of manufacturing that would add the troublesome smell of cannabis.

These businesses need serious oversight / regulation / enforcement, like alcohol.

If AG approves commercial cannabis, the City should position itself to receive extra tax revenue to provide additional services to the community.

The flavor of the town will change adversely. Frequently strong stinky skill of marijuana will linger.

Extra revenue from sales tax would immeasurably help the City of Arroyo Grande as it has in Grover Beach.

Individual Responses AI-Generated Summary
cannabis
grover
need
tax
ag
allow city
beach arroyo grand
revenue
use
people
sale
business
community
already
money
think make
commercial
family
store
please
area
go
like
let strong
shop
grow available
plenty
bring
retail
away want
oppose
dispensary
school
place
impact
idea
consider
drug
change
year
see
enough
high
Attachment 4

The only reason I am entertaining the idea of cannabis in AG is for the increased taxes allowed on the businesses and the city’s need for revenue so that services are not cut in the interest of funding pensions. I have three children, nine-, 12-, and 13-years-old. Any location would have to be away from schools, playgrounds or where children bike/walk to/from school. Grand splits Harloe and Ocean View, so over by Courtland or Halcyon would be the only places that come to mind. Stoned driving is the same drunk driving.

Spending some of the tax revenue to train AGPD to test drivers for driving under the influence of weed would be a must.

Please do not allow Cannabis in AG. We are already loosing kids to vaping and smokeless tobacco! Not ok make that money!
I did not answer anything beyond the initial question because I am strongly opposed There will be a direct impact to fire, finance/city hall, and police. If revenue is coming in, it should reflect the departments that will be impacted.

I don't like the idea at all.

Please don’t follow Grover’s poor decisions. We don’t need a bunch of weed around our city. We just raised sales tax so we shouldn’t need revenue from weed sales. Please be smart and take the high road on this one.

We are spending oodles of money treating mental illness and training first responders on the issue, too. Why would you consider adding fuel to the fire? NO reason why the city should make revenue on the suffering of people who self medicate on this psychosis inducing drug. My family has first experience with this and I would not wish it on my worst enemy or city officials who are too stupid to understand this issue! Take a class from NAMI and see for yourselves what it does to people.

Limit storefront and visible advertisement/availability of cannabis sales and use. Allowing private businesses to operate discreetly will help generate tax revenue. I'm mostly in support due to financial reasons. I'd rather have consumers dump their money into Arroyo Grande businesses opposed to surrounding communities.

Prohibit all cannabis in Arroyo Grande. Grover has it; AG does not need it.

Don’t do it
Please don’t open any cannabis operations. People can go to slo to get what they want. There are plenty of dispensaries there I would be all for this if the funds made from this endeavor would be allocated to fix our road surfaces.

I don't know much about the cannabis business but I'm not opposed to it. I don't know how it's impacted Grover Beach from a safety standpoint but it appears to be working there.

Positive if commercial cannabis enhances the quality of business, social, and neighborhood. This is such a wonderful town and area to live in. Thanks for asking.

Do not allow
It'd be good for tax revenue, but I'm hesitant to have more than one or two retail storefronts. Usually not the highest rate clientele hangs about
Thank you for considering this change.

The city is kind of late to the game but I think there is still opportunity. If nothing else you would pull some tax revenue from GB I am not in favor of this. We have enough cannabis stores surrounding AG., we do not need any inside AG This survey makes it clear the decision has already been made to allow cannabis in AG. This has been a failure everywhere it’s tried.

When regulatory & law enforcement costs are factored in, this is a money loser. Our neighborhoods decay with no benefit except to the users. How about license existing liquor stores to sell cannabis too. Limits the damage at least Would not support allowing commercial cannabis in AG. There are plenty of existing sites close by (other cities) that serve this need.

Please do not add to already existing AG area problems by adding additional sources of trouble and negative impacts to AG residents' safety and quality of life. There are plenty enough intoxicated drivers and disruptive behaviors here already, and cannabis grow operations reek and pollute air & water. Please, no!
With a lot of cannabis in Grover I’m not sure we need it in AG. Growing and manufacturing it can be very smelly. I don’t want the AG farms changed to growing weed. And I don’t want the AG farms near the high school rezoned for houses and businesses. Don’t take the ag out of AG.

All this will do is hurt our community as a whole especially our young people. don't be taken in by the people who say it will create a lot of added revenue. The result (both physical and financial) will far outweigh any added revenue benefit. Cannabis is a gateway drug...don't let anyone tell you otherwise
I am Vehemently opposed to cannabis in Arroyo Grand!!!
I am against any cannabis sales.

Cannabis grow, processing and packaging emits a lot of very strong odors. You must be careful where you locate these operations to avoid public nuisance.
nO COMMENTS
Attachment 4

I do not want cannabis sold in AG.

Reject it and find other places. It cheapens the look and feel and is available nearby if wanted.

I like that thc is legal and that i can go to grover to get itand support grover. I would preferAG focus on bringing more inclusive businesses that are family and hang out friendly.

Not a fan of making recreational use easier for my neighbors.

Allow senior adults to find out if cannabis is a viable medication for their illness without judgement or repercussion.

We don't need cannabis in AG. There are 3 or 4 in Grover already.

Treat it similar to alcohol and let the free market play out.

Not near schools pleeeease
No commercial cannabis sales in AG
I really don’t mind the legal cannabis industry. I lived in Portland for a long while, and you wouldn’t even know you were living by a shop if it weren’t for the signs. Shops can be nice medicinal store fronts rather than hiding them away like Grover. I think Arroyo Grande is due for some shops at the least.

If you allow Cannabis Sales, into Arroyo Grande, it will bring the types of people you don’t want your kids around. It needs to be kept away from schools period! Let it stay in Grover Beach, but not here! I have a generally unfavorable opinion of dispensaries based on the undesireable areas I see the shops in other communities. plenty available in grover beach
The cannabis market in California is overly saturated. Arroyo grande is several years too late on this one.

Do not open this can of worms. The amount that is brought in is not worth the risk! If retail was allowed the storefront and signage appearance should be subtle and quiet.

City of AG needs to compete with other cities if they’re benefiting from allowing retail cannabis. Must collect tax dollars to make it worthwhile. If Grover Beach does not make money then do not follow that model. If GB does benefit then AG should as well.

I strongly object to commercial cannabis in any form in arroyo grande They can go to Grover beach Drugs are disgusting and bad for your health.

It’s a gateway drug. Only should be used in medical situations.

None
I do not believe the City of Arroyo Grande should regulate or allow cannabis sales in City limits. If it ultimately is allowed the less permits the better and a specific area of the City should be designated for such activity. A comprehensive permitting process with safeguards similar to the ordinance written by the City of Grover Beach should be included.

Don't do it. There are other ways to make money. Let Grover capture that market.

There are enough sources locally. Do not ruin AG by adding pot sales.

I think the city would only consider it if they would get extra tax off of it and I don’t think they should get extra tax. I think they should use the tax that people voted for properly now. I voted no.

No! No! No!
Tax the hell out of it.

Have the taxes collected go to a specific project each year or quarter... not just put into the general fund.

Stop giving taxes to other cities! Buy local, get additional sales taxes for our needs in A.G.! cannabis tax brings in tons of money, is far less harmful than alcohol, and has secondary effects of increasing other food/entertainment/social spaces revenues. nowhere that has implemented it has regretted it, and it is long overdue we catch up to the rest of the world in this specific industry
We HIGHLY support cannabis in Arroyo Grande!
Don’t need growers. All stores should be in stand alone buildings.

Don't allow it.

It is about time that we take away the stigma behind legal cannabis use. The more visibly and availability with dispensaries the better.

Let’s use the tax dollars for good.

I don’t think this is a good move for AG. Our residents can meet their cannabis needs in Grover or SLO.

Strict age verification procedures!
Attachment 4

Strongly oppose cannabis facilities of any kind in Arroyo Grande. It is a downhill slide into degradation of our community. Legalization was sold as harmless, even beneficial. But the data shows cannabis use fuels: • Mental illness • Psychosis • Crime and violence • A generation of addicted young people https://www.kcl.ac.uk/news/largest-ever-study-into-cannabis-use-investigates-risk-of-paranoiaand-poor-mental-health-in-the-general-population 27 August 2025 Largest ever study into cannabis use investigates risk of paranoia and poor mental health in the general population
It is completely unnecessary to allow cannabis in AG. People can get it in Grover Beach. I worry that people will use the cannabis after purchase and then drive their cars under the influence. We don't need to bring that danger to our quaint village and ruin the familyfriendly vibe of AG.

There’s already the 805 dispensary in Grover Beach. That’s enough Stop spending money on your salaries so that that you do not need to get taxes from cannabis Pot is to strong now
All Cannabis activity should be located in the Village
No cannabis
AG is a family centered community and does not need to include cannabis sales of any kind. There are multiple places in Grover and other nearby areas where cannabis can be purchased. Don’t put our families in jeopardy because you might make money or be able to tax cannabis shops. There are already too many such places available.

DO NOT PERMIT CANABIS IN A.G!!! WHY IS THIS A QUESTION!!! COME ON NOW! WHY ARE CONSTANTLY SLIDING DOWN A SLOPE TO DEEPER DYSFUNCTION!
It can bring a bad element to the community, create significant problem with how it smells, especially growing it. There are plenty of options in Grover Beach. Please do not allow such businesses here.

Outdoor cultivation for personal use - no spcial screening required This business is in the tanks. A sinking ship. City do your homework...Please not in Arroyo GRANDE I’d rather not see this at all in AG.

Is there any way for police to assess a person who is high while driving who has been involved in a wreck? Do not let this snake into the tent. It will ruin AG.

This is a BAD idea and it will ruin the charm of the community - when will this encroachment into good wholesome family values stop?
Why are we even considering this?
dont let drugs in
Cannabis retailers are a bad idea and do not result in the new revenue they were once thought to produce.

Don’t think we should have commercial cannabis in the city of AG. The one is Grover is enough. Don’t need more taxes on that our residents. We are taxed enough here in AG.

Why are there so many multi family homes being built by HASLO? This is a terrible idea for AG—really sad actually.

I personally don't care if people use it in their own homes. My issue is that since this has become legal, I smell it everywhere. More needs to be done to make sure this is not done in public places. Until that happens, I don't believe we need to bring in more shops that will just make the issue worse.

People can go to Grover Beach for their marijuana needs.

There are tons of cannabis commercial locations in Grover Beach just blocks away from my home… you use Berry Gardens as a dumping ground for everything you don’t want near the village area. Keep this AWAY from our homes! Use retail Space where the previous Emergency vet clinic was.

Meet with the City of Grover Beach and see how it’s worked out for them as far as tax revenue, and ask if they’d have changed anything
SLO, Grover Beach, Morro Bay all have brick-and-mortar stores and those cities profit from taxes. With adequate security, the risk to public safety is very minimal. Arroyo Grande has already missed out on the opportunity for many years and it's time to catch up.

I think there should be a limit on the amount of cannabis stores allowed. Like maybe only 2 in the city.

We dont need that business here. People can go to the Grover Beach.

Keep it out of our community!
I know some of the large facilities in Grover that were built are really struggling now and sitting empty or being sold at a loss. Thus I think we should be calculated in how we roll out any large indoor facilities. I would not like to see only certain parts of town be able to Attachment 4

have retail. If we as a city decide it is ok to have cannabis retail it should be allowed in any portions or the retail centers not just parts of town.
(c) Copyright 2013-2025 Governance Sciences Group, Inc., Patent pending Attachment 4