Table of Contents
Section 1: Analysis for the CORE Storefront Dispensary Survey .......................................... 3 Introduction: .................................................................................................................................. 3 Survey Analysis Summary ............................................................................................................ 3 Conclusion .................................................................................................................................... 6 Section 2: Analysis for the Storefront Dispensary RFQ Survey ............................................. 7 Introduction ................................................................................................................................... 7 Survey Analysis Summary ............................................................................................................ 7 Conclusion: ................................................................................................................................... 8 Section 3: Storefront Dispensary RFQ Interviews ................................................................... 9 Introduction ................................................................................................................................... 9 Interview Summary ....................................................................................................................... 9 Conclusion: ................................................................................................................................... 9
Section 1: Analysis for the CORE Storefront Dispensary Survey Introduction:
The objective of this survey was to gather insights and information from verified CORE participants. The survey data consists of 58 responses, with a demographic breakdown revealing 57 verified CORE participants and one non-CORE participant. This survey was conducted in October 2023.
Survey Analysis Summary
Desire for More Storefront Opportunities:
There are 50 respondents that agreed there should be more than ten storefront opportunities made available for CORE participants. Only seven respondents disagreed.
Reasons Provided Supporting More Opportunities:
• Expertise and experiences
• Diversity
• Equity
• Creation of generational wealth
• At least half of the storefront permits should be CORE, as promised by Council • Opportunities to make more profits from existing businesses • Create a healthy competition among dispensaries
• Strengthen the CORE program
• Want an opportunity to open a dispensary
• Believe that some of the 10 RFQ candidates cannot open their storefront • Less corporate control in the cannabis industry
• Free market; no cap on storefront
• More storefronts to serve the Sacramento population
Yes
88%
No
12%
Do you believe there should be more
than 10 storefront opportunities made
available for CORE participants?
Yes No
• Most mentioned reasons:
o There were 12 respondents that mentioned at least half of the storefront permits should be CORE, as promised by Council
o There were 13 respondents that mentioned equity
Reasons Against More Opportunities:
Oversaturation means there will be less profit for current dispensary owners
Opinions on Additional Time for Opening Storefronts:
Twenty-four respondents believe that the ten highest scores should be given additional time if they are not able to open a storefront dispensary within the allotted three years.
There were 33 respondents that believe there should be no additional time.
Reasons Provided Supporting Additional Time:
• Newcomers to the industry should get additional time
• Additional time is needed for equity
• Securing investment and the high cost of opening a storefront • The requirements to open a storefront are difficult
• Have skin-in-the-game
• It depends on the time they need to open a storefront • Most mentioned reasons:
o The requirements to open a storefront are difficult
o Securing investment and the high cost of opening a storefront
Yes
42%
No
58%
Do you think the 10 highest scorers should
be given additional time if they are not
able to open a storefront dispensary
within the allotted 3 years?
Yes No
Reasons Provided Against Additional Time:
• Three years is enough; it should not take that long.
• The requirements are clear
• People lied on the RFQ
• We should not wait for years to have a chance to open a storefront • The timeline should be followed as stated in the RFQ/rules • Give opportunities to other CORE members
• Most mentioned reasons:
o 19 respondents mentioned that three years is enough or that it should not take that long to open a storefront
o Nine respondents mentioned giving opportunities to other CORE members
Recommended Methods to Allot Storefront Opportunities:
• Given to the next highest scorers of the previous RFQ • Lottery/random selection
• RFQ
• RFQ and interview
• CORE members who have been involved in the program since the beginning • Award to those who have demonstrated that they are able to complete a project • Half go to the next highest scorers of the previous RFQ, and half go to the RFQ process
• Committee process
• By readiness
• Character assessment and interview
• Most mentioned recommendations to allot opportunities:
o 12 respondents mentioned the opportunities should be given to the next highest scorers of the previous RFQ
o Eight respondents mentioned the lottery or random selection process o Eight respondents mentioned using the RFQ process as last time
Reasons Provided for CORE Participants Wanting to Open a Storefront:
• Existing businesses: vertical integration
• Experience and expertise
• More diversity
• Promises made
• Serve community
• Continue family tradition in the legal cannabis industry • Life-changing: economic opportunities or building generational wealth • Safe location for customers to shop
• Victims of the War on Drugs
• Most mentioned reasons:
o Nine respondents mentioned that they have existing businesses, and this would be a part of their vertical integration plan
o 12 respondents mentioned that their storefront would serve the community in many ways
o Eight respondents mentioned the opportunity for a storefront would help them build generational wealth and provide an economic opportunity for their family and community.
Additional comments and suggestions:
• Diversity to be represented in the cannabis industry
• Assuring the businesses are managed by CORE
• How many black people with no white or other races as co-owners own a dispensary in Sacramento?
• Cohorts 1, 2, and 3 should be given priority over newly approved core participants
• Less taxes
• Award storefronts to current operators
• Lower barriers to entry
• Should consider opening M1 and M2 zoning for cannabis • Fight for extensions before focusing on extending the program • No tax for CORE in the first 3 years of operation
• The original “RFQ” was a DISASTER
• Veterans should have priority
• Attaching the conditional use permit (CUP) to the business rather than to the property
• Stop changing the rules
• Appreciation to OCM
Conclusion
Nearly 90% of respondents agreed that the City Council should expand the opportunities for storefront dispensaries in Sacramento, particularly with the goal of having 50% of them owned and operated by CORE participants. Some CORE participants oppose this idea, citing concerns about oversaturation leading to reduced profits for existing dispensary owners. Despite this opposition, the survey overwhelmingly supports more opportunities for storefront dispensaries.
While 58% of respondents reject the notion of OCM requesting an extension from Council, arguing that the allotted three-year timeline is sufficient, 42% believe an extension is needed due to the challenging nature of meeting requirements and securing investments for CORE participants.
If additional storefront dispensary permits are to be awarded, respondents suggest three allocation methods: RFQ process, awarding to the next highest scorers from the previous RFQ, or a lottery/random selection process.
Respondents desiring to open a storefront dispensary often have existing cannabis businesses and seek vertical integration. Their motivations include serving the community, assisting those affected by the War on Drugs, and creating generational wealth for their families.
Section 2: Analysis for the Storefront Dispensary RFQ Survey
Introduction
The objective of this survey was to compile insights and information from the ten RFQ participants. The survey encompasses responses from six participants, including two who have successfully opened their storefront dispensaries and four who are still in the process. As of the time of this analysis, out of the 10 RFP highest scorers, only four have successfully opened their storefront dispensaries. This survey was conducted in October 2023.
Survey Analysis Summary
Anticipation Timeline to Open:
• One respondent stated they need less than one month.
• Two respondents stated they need two to six months.
• One respondent stated they need more than six months.
Challenges Respondents are Facing:
• Accident (destroyed building)
• Planning Department’s processes are long
Yes
50%
No
50%
Can you meet the deadline of April 1,
2023, to open
your storefront dispensary?
Yes No
Proposed Extension Timeframe:
• Two respondents prefer a 6-month extension
• One respondent prefers a 12-month extension
Ways that OCM can Provide support:
• Extension of the deadline
• Expedite the planning process
• Tax revenue allocation to support CORE start-ups
• Increase grant funds
Additional Comments and Suggestions:
• A personal assessment for qualification is needed
• Emphasis on the need for an extension
• Advocacy for awarding more permits to open storefront dispensaries
Conclusion:
At the time of analysis, only four out of the ten RFQ participants have successfully opened their storefront dispensaries, while the remaining six face April 1, 2024. The survey analysis reveals at least 30% of the top scorers anticipate needing an extension of 6 to 12 months.
Respondents' calls for future personal assessments for qualification and emphasis on the need for an extension underscore the needs to refine the RFQ criteria and scoring system, ensuring that the highest scorers are adequately equipped for success in opening a storefront dispensary in the timeline allotted.
Yes
75%
No
25%
Are you in favor of the Office of Cannabis
Management approaching the City
Council to request an extension after the
April 1, 2024, deadline?
Yes No
Section 3: Storefront Dispensary RFQ Interviews
Introduction
The objective of these interviews was to provide a space to discuss with the six RFQ participants who had not obtained a BOP, any additional information they would like to share that was not captured in the Storefront Dispensary RFQ Survey, as well as what additional support OCM can assist with. These interviews took place in December 2023.
Interview Summary
Six interviews were offered to the RFQ participants who had not obtained a BOP and five participated in the interview process. The five interviewed RFQ participants want OCM to advocate for an extension beyond April 1, 2024 even if they stated they could make the deadline in the written survey. The anxieties surrounding the looming deadline and potential to not be open by April 1, 2024 were the driving factors behind the responses and the rush to open a storefront. Any additional time would ease the burden the participants are facing of losing the opportunity in front of them. Each participant is also unique in their journey to opening a storefront and individually has faced and/or is facing varying challenges. One participant endured multiple CUP hearings to rehabilitate their future storefront, while another was required to install new water and sewer pipes, as well as post stop signage and install sidewalks. Unfortunately, another experienced a fire and has been forced to find another location.
Investing and funding were also discussed as challenges participants have faced and/or are currently facing. Three participants discussed how difficult it is to navigate investors who are “wolves in sheep’s clothing” (referring to exploitative partners/investors). As well as other financial barriers traditional businesses typically do not encounter (i.e. banking and conventional loan procurement). On-going issues with partners/investors around ownership and control of storefronts led to several participants pivoting to new locations and searching for new partners, which also contributed to delays in opening. This also goes hand-in-hand with lack of capital, as well as mentions of no access to generational wealth to tap into to get ahead without investors and partners. Supply-chain disruptions, as well as access to affordable contractors were also noted during these interviews as points of frustrated.
Conclusion:
At the time of interviews, only four out of the ten RFQ participants have successfully opened their storefront dispensaries, while the remaining six face the April 1, 2024 deadline. It was important to not only conduct a quantitative assessment utilizing the Storefront Dispensary RFQ survey, but a qualitative approach as well to capture the personal journey each RFQ participant has gone through over the course of three years. These personal anecdotes provide insight into the struggles of those striving to achieve their dreams of opening a storefront dispensary in the City of Sacramento.
ORDINANCE NO. 2020-0035
Adopted by the Sacramento City Council
October 13, 2020
An Ordinance Amending Section 5.150.350 of the Sacramento City Code, Relating to Storefront Cannabis Dispensaries
BE IT ENACTED BY THE COUNCIL OF THE CITY OF SACRAMENTO:
SECTION 1.
Section 5.150.350 of the Sacramento City Code is amended to read as follows:
5.150.350 Limit on storefront cannabis dispensary permits.
A. Notwithstanding any contrary provision in this chapter, the city shall not issue a new storefront cannabis dispensary permit if there are 40 or more valid storefront cannabis dispensary pe
rmits at the time an application is submitted.
B. Whenever the number of valid stor efront cannabis dispensary permits is less than 40, the city manager may issue an available permit through a process that is established by city council resolution. The process must, at a minimum, be consistent with this code and may:
1. Evaluate whether applicants will be able to successfully submit a complete application for a storefront cannabis dispensary permit;
2. Evaluate whether applicants will be able to successfully operate a storef ront cannabis dispensary; and
3. Utilize criteria reasonably necessary to protect t he public health, safety, and welfare.
Ordinance 2020-0035 October 13, 2020 Page 1 of 2
Attachment 6
Adopted by the City of Sacramento City Council on October 13, 2020, by the following vote:
Ayes: Members Ashby, Carr, Guerra, Hansen, Harris, Jennings, Schenirer, Warren and Mayor Steinberg
Noes: None
Abstain: None
Absent: None
Attest:
_____________________________________
Mindy Cuppy, City Clerk
The presence of an electronic signature certifies that the foregoing is a true and correct copy as approved by the Sacramento City Council.
Passed for Publication: Not applicable
Published: To be published in its entirety
Effective: November 12, 2020
Ordinance 2020-0035 October 13, 2020 Page 2 of 2
Mindy Cuppy
Digitally signed by Mindy Cuppy
Date: 2020.10.16 09:30:05
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