City of Paso Robles – City Council Comments 805 1 -865-7276 Study Session:
Adult-Use Non-Storefront Retail Cannabis
and Cannabis Regulatory Permit
City Council Study Session
May 19, 2026
City of Paso Robles – City Council Comments 805-865-7276 2 Public Comments call 805-865-7276
"Medicinal cannabis" means cannabis or cannabis products intended to be sold or donated for use pursuant to the California Compassionate Use Act of 1996 by a medicinal cannabis patient who possesses a physician’s recommendation, or in compliance with California Health and Safety Code Section 11362.1.
also referred to as - medical marijuana
“Adult-use cannabis” means cannabis or cannabis products intended for adults who are 21 years of age and older and who do not possess a physician’s recommendation. also referred to as - commercial cannabis, recreational cannabis “Non-storefront retail” or “non-storefront retailer” means a cannabis business that is closed to public access and conducts sales exclusively by delivery as defined in California Business and Professions Code Section 26070(a)(2), and requires a Type 9 (Non-Storefront Retailer) license from the California Department of Cannabis Control. also referred to as – cannabis delivery office, delivery business Cannabis Definitions
City of Paso Robles – City Council Comments 805-865-7276 3 Public Comments call 805-865-7276
▪ 1996 – California Compassionate Use Act of 1996 (Prop 215) ▪ 2015 – Medical Marijuana Regulation and Safety Act (MMRSA) ▪ 2016 – Prop 64 legalized “adult use of marijuana” (personal use legalized statewide, commercial use as allowed by zoning) ▪ 2016 – Paso Robles Ordinance 1036 (medicinal delivery offices = only commercial activity allowed) ▪ 2017 – California Medicinal and Adult Use Cannabis Regulations and Safety Act (MAUCRSA) ▪ 2018 – Paso Robles Ordinances 1051 and 1052 (medicinal delivery offices by TUP) ▪ 2018 – Paso Robles Measure I-18 (maximum cannabis tax rates established) ▪ 2019 – Paso Robles Ordinance 1072 and 1073 (medicinal delivery offices by CUP) ▪ 2020 – Paso Robles Ordinance 1104 (setting cannabis business tax rates) ▪ July 19, 2022 – Council provided direction to staff to develop a cannabis framework ▪ October 18, 2022 – Council adopted Ordinance 1126 (temporarily allowing adult use cannabis delivery businesses for one year) ▪ August 19, 2025 - Council directed staff to bring an ordinance to allow existing medical cannabis delivery businesses to deliver adult-use cannabis permanently
▪ February 10, 2026 – Planning Commission recommended amendments to PRMC Chapter 21.60 to allow commercial cannabis delivery offices ▪ Dispensary discussion will come at a future time
Paso Robles Cannabis Regulation History
City of Paso Robles – City Council Comments 805-865-7276 4 Public Comments call 805-865-7276
Paso Robles
2022 Cannabis Delivery Office
Location Map
City of Paso Robles – City Council Comments 805-865-7276 5 Public Comments call 805-865-7276
City of Paso Robles – City Council Comments 805-865-7276 6 Public Comments call 805-865-7276
▪ Request for a cannabis framework
▪ Ordinance 1126
– Temporarily allowed commercial cannabis delivery offices for 1 year (expired October 18, 2023)
▪ Resolution 22-144
– Limits the number of commercial cannabis delivery
businesses to 3
– Named the 3 businesses permitted:
▪ Conditional Use Permit 19-06 (1124 Black Oak Drive)
– Dub’s Green Garden (1 delivery office space)
– Aquamarine Green (1 delivery office space)
▪ Conditional Use Permit 21-26 (2805 Black Oak Drive)
– Kinfolk Holistics (1 delivery office space)
2022 Council Action
City of Paso Robles – City Council Comments 805-865-7276 7 Public Comments call 805-865-7276
1124 Black Oak (CUP 19-06)
1. Dub’s Green Garden
▪ In operation
▪ Last remitted cannabis taxes 3/31/26 (due quarterly)
2. Aquamarine Green
▪ Owner passed away
▪ Lease at 1124 Black Oak Drive has ended
▪ Last remitted cannabis taxes 10/31/25 (reported $0 on 3/31/26)
3. Vacant tenant space
2805 Black Oak Drive (CUP 21-26)
4. Kinfolk Holistics
▪ Sold to Pacifica Companies (Sacramento)
▪ Last remitted cannabis taxes 4/6/23 (last reported $0 on 3/31/25) ▪ Business license has not been renewed yet for FY 2026-27 ▪ Building permit B22-0518 issued in 2022, never finaled Existing Businesses and Conditional Use Permits
1124 Black Oak (CUP 19-06)
2805 Black Oak Drive (CUP 21-26)
City of Paso Robles – City Council Comments 805-865-7276 8 Public Comments call 805-865-7276
▪ Public hearing - February 10, 2026
▪ Amendment to PRMC Chapter 21.60 to allow adult-use non-storefront retail cannabis
– Repeal and replace existing cannabis regulations
– Allow 3 commercial cannabis delivery offices
– RSC and C-3 zoning districts
– 600-foot separation requirement from public parks and City-owned parks (in addition to existing separation requirement for schools, daycare centers, and youth centers)
– Addition of sign limitations
▪ restricting onsite signage to no more than 20 square feet total, ▪ precluding the use of highway-oriented signs and off-premises signs – Addition of Police Department right-of-entry
▪ Planning Commission recommendation is to approve the Zoning Amendment and to allow more than 3 commercial cannabis delivery offices ▪ Operating a non-storefront retail cannabis business will not vest any operator for a future dispensary location, should Council choose to allow them Planning Commission Recommendation
C-3
City of Paso Robles – City Council Comments 805-865-7276 9 Public Comments call 805-865-7276
Jurisdiction Allowed
Use
Quantity
Allowed
Quantity
Issued
CUP
Required
Regulatory Permit
Required
Notes
Arroyo Grande No 0 0 N/A N/A
Atascadero Yes No cap 0 Yes No, annual review required
Grover Beach Yes 4 4 Yes Yes Required to operate out of a dispensary Morro Bay Yes No cap 0 No Yes
Pismo Beach No 0 0 N/A N/A
City of SLO Yes No cap 1 Yes Yes 1 dispensary has permission to deliver SLO County Yes No cap 7 Yes No, annual review required Oceano, Nipomo, Arroyo Grande, 2 inland north county.
Cannabis Delivery Office Regulations by Jurisdiction
City of Paso Robles – City Council Comments 805-865-7276 10 Public Comments call 805-865-7276
▪ State Regulated - City has no control of legal deliveries originating from outside the City
▪ Statewide, deliveries account for about 25% of sales
(Flowhub.com)
▪ There are 11 business licenses for cannabis deliveries – 9 licenses are active (1 pending approval, 1 delinquent) – 3 businesses are located in Paso Robles city
– 6 licenses regularly (at least 2x per fiscal year) report to the City
▪ 4 licenses regularly report sales and remit taxes
Deliveries from Outside the City
City of Paso Robles – City Council Comments 805-865-7276 11 Public Comments call 805-865-7276
Fiscal Year Delivery Revenue Penalty Revenue Total Revenue FY 2020-21 $ 5,860 $ - $ 5,860
FY 2021-22 $ 16,600 $ - $ 16,600
FY 2022-23 $ 30,296 $ 3,087 $ 33,384
FY 2023-24 $ 66,646 $ 109 $ 66,756
FY 2024-25 $ 66,072 $ - $ 66,072
FY 2025-26 TO-DATE $ 50,744 $ 2,047 $ 52,791
GRAND TOTAL FYs 2020-26 $ 241,465
Cannabis Tax Payments
City of Paso Robles – City Council Comments 805-865-7276 12 Public Comments call 805-865-7276
▪ Current process requires approval of a Conditional Use Permit – Land use entitlement (zoning compatibility, buffers from sensitive sites, traffic, noise, etc.) – Site specific (runs with the land, not the operator)
– One-time approval
– Time-consuming to revoke
– Leaves a gap in oversight
▪ Proposed Cannabis Regulatory Permit
– Operational standards (security plan, background checks, odor control, record-keeping) – Specific to an operator/business entity
– Ongoing monitoring and regulatory oversight (annual renewal) – Simpler revocation process
– Requires amendment to Title 5 (Permits and Regulations) What is a Cannabis Regulatory Permit?
City of Paso Robles – City Council Comments 805-865-7276 13 Public Comments call 805-865-7276
Topic Discussion Recommendation
1. Resolution 22-144 • 3 businesses named to temporarily deliver adult-use cannabis
• Only 1 still in operation
• Repeal Resolution 22-144
2. Delivery Office
Numeric Cap
• In cities with no cap, there is no
overconcentration
• The cap creates unnecessary
competition/false market
• The cap creates the appearance of a
vested right to a future dispensary
• Easier to track sales and monitor
businesses from locations in Paso Robles
• Planning Commission recommended the City
allow more than 3 adult-use non-storefront
retail businesses
• Staff recommends eliminating the limit entirely
3. Cannabis
Regulatory
Permit
• Allows for ongoing monitoring and
regulatory oversight
• Simpler to revoke for bad actors
• Staff recommends the amendments (Chapter
21.60 and Title 5) are adopted concurrently
4. Existing
Conditional Use
Permit
Amendment
• Existing CUPs are limited to delivery of
medicinal cannabis
• Existing CUPs do not require approval of a
regulatory permit
• Staff recommends existing medical cannabis
non-storefront retailers be required to amend
their CUP (Planning Commission approval) if
they want to add adult-use cannabis deliveries
City of Paso Robles – City Council Comments 805-865-7276 14 Public Comments call 805-865-7276
Council Direction
1. Resolution 22-144? keep, repeal, amend
2. Cap Delivery Offices? No cap, 3 max, other number
3. Cannabis Regulatory Permit? Yes / No
4. Existing CUP amendments? Yes / No
City of Paso Robles – City Council Comments 805-865-7276 15 Public Comments call 805-865-7276
City of Paso Robles – City Council Comments 805-865-7276 16 Public Comments call 805-865-7276
Jurisdiction Quantity
Allowed
Quantity in
Operation
Grover Beach 4 4
Morro Bay 2 2
City of SLO 3 2
County of SLO 0 0
Dispensaries