City of Fortuna
Cannabis Policy Study Session
Image Credit: Fortuna Chamber of Commerce
Mark Lovelace
Senior Policy Advisor
HdL Companies
About
HdL
• Municipal finance consulting firm providing revenue
and economic insights to local governments
• HdL Serves:
• 303 cities
• 48 counties
• 108 transaction districts
• We provide sales tax, property tax, business licensing, economic development, and cannabis management
• HdL has provided consulting services to over 175 local agencies to help develop cannabis policies
• Team includes former policymakers, law enforcement
and cannabis regulators with State, county and local
level experience
2 Objectives of Discussion
• Provide brief overview of cannabis policy in California, the Fortuna area and Humboldt County
• Take comments and input from the public
• Discuss and ask questions
• Consider key policy questions before providing direction to staff 3 Business
Types
4 CULTIVATOR
MANUFACTURER
TESTING LAB
DISTRIBUTOR
RETAIL
TESTING LAB
CONSUMER
Cannabis Business Types
5 State/Regional
Environment
6 CA CANNABIS LICENSES AS OF AUGUST 2025
4,775 Cultivation
537 Manufacturer
1,199 Retailers
260 Retailers Non-Storefront
877 Distributors
125 Distributor Transport Only
402 Microbusinesses
22 Testing Labs
46 Cannabis Event Organizers
8,162 Total
7 CANNABIS RETAILERS IN THE FORTUNA AREA
8 CANNABIS RETAILERS IN THE EUREKA AREA
9 RETAILERS IN THE ARCATA/McKINLEYVILLE AREA
10 11
Cannabis Business Types Allowed
City/County Cultivation Retail Wholesale Testing
Humboldt County Y Y Y Y
Eureka Y Y Y Y
Arcata Y Y Y Y
Fortuna N N N N
Rio Dell Y Y Y Y
Ferndale N N N N
Blue Lake N N N N
Trinidad N N N N
Cannabis Business Types Allowed by Jurisdiction
12 Cannabis Taxes and Rates
City/County Cultivation Retail Wholesale Testing
Humboldt County 10¢/20¢/30¢ - - -
Eureka - - - -
Arcata - - - -
Fortuna - - - -
Rio Dell $2/SF 2.0% 2.0% 2.0%
Ferndale - - - -
Blue Lake - - - -
Trinidad - - - -
Cannabis Business Tax Rates by Jurisdiction
POLICY
DISCUSSION
13 A REGULATORY SYSTEM CAN:
Give the local agency authority and
control over licensing decisions
Establish facility design and location
requirements
Impose operating restrictions that are
more stringent than the State
Enhance accountability for security and
product safety
14 15
ZONING AND
LOCATION
REQUIREMENTS
City can determine
allowable zones for
each business type
City can apply other
restrictions such as
setbacks from
schools, parks or
other sensitive uses
• Cannabis businesses cannot be
located within 600 feet of a
“sensitive use,” defined as a
school, day care center, or
youth center.
• Local jurisdictions have the
authority to increase/decrease
buffer distances, and/or expand
the definition of “sensitive use.”
STATE-MANDATED BUFFER ZONES
16 COMMUNITY PRIORITIES
1 2 3 4
Public Safety Public Health Neighborhood
and Land Use
Protection
Preventing
Youth Access
17 • Existing State Law:
• Security personnel on-site during all
hours of operation
• 24-hour video surveillance
• Alarm systems monitored by third-party
• Limited access areas
• Sign-in/sign-out procedures
• Employee badge requirement
• Criminal background checks of owners
PUBLIC SAFETY
• City Regulatory Authority:
• Motion sensor lighting
• On-site safe/vault
• Security patrol or presence when closed
• Annual compliance inspections/
financial audits
• Criminal background checks of
employees
• Limitations on amount of cannabis
goods in retail space
18 PUBLIC HEALTH
• Existing State Law:
• Third-party testing for mold, pesticides,
and other contaminants
• Product labeling / dosing
• THC concentration limits
• Daily purchase limits for customers
• No public consumption
• Dedicated public health program
funding through cannabis tax revenue
• City Regulatory Authority:
• Warning signage inside facility
• Display of CDPH health pamphlets
• Visibility restrictions
• Budtender training program
• Annual public health fee
• Allocation of tax revenues to fund local
public health programs
19 LAND USE PROTECTION
• Existing State Law:
• Sensitive use buffer requirements
• Cannabis waste disposal requirements
• Cannabis goods display only in retail area
• Opaque exit packaging requirement
• Shipment of cannabis goods may only be
accepted during business hours
• Mandatory 10PM closure
• City Regulatory Authority:
• Exterior lighting + landscaping
• Stringent facility design standards
• Strict enforcement of odor control
• Exterior waste receptacles and
scheduled cleaning
• Designated community liaison
• Prohibition on queue outside facility
• Further restrictions on hours of
operation (e.g. 9PM closure)
20 PREVENTING YOUTH ACCESS
• Existing State Law:
• Retailers cannot sell cannabis to persons
under 21 (or 18 with a valid doctor’s
recommendation)
• ID verification prior to entry
• Employee presence at all times
• Track and trace of cannabis goods
• Tamper-evident child-resistant packages
• Product warning labels
• Universal cannabis symbol:
• City Regulatory Authority:
• Underage decoy program
• Routine inspections
• Funding of youth prevention services
using cannabis tax revenues
• Annual license renewals with automatic
revocation for underage sales
• Prohibition on temporary signage
21 REVENUE GENERATING STRATEGIES
Standard fee to
recover City
administrative
costs
General tax to be
considered by the
voters
22 Operational /
Community
Benefit
Agreement
CANNABIS
RETAIL TAX
REVENUE
Annual Retail Cannabis Tax Revenue
Potential cannabis retail sales:
$3.5 million to $5.5 million
Potential cannabis tax revenue:
$180,000 to $320,000
Depending upon tax rate
Plus $45,000 in sales tax
23 Key Policy Decision
Does the City want to maintain the current prohibition
on commercial cannabis businesses
or
Does the City want to develop a program to permit
and regulate commercial cannabis businesses?
24 Key Policy Decisions
• Which business types to allow?
• Storefront retail? Delivery? Cultivation?
• Does the City want to limit the number of businesses? • Where would each business type be located?
• What kinds of buffers, setbacks and other restrictions? • What kinds of security measures?
• Does the City want to impose a revenue measure?
• Voter approved Tax? Operating agreements?
25 Questions?