Retail Cannabis Study Session
September 9, 2026
Government Code Section 54
SB 343 Item #17
09/09/2026 REG CC
2 Presentation Outline
• Review of existing cannabis regulations
• Overview of key retail cannabis
considerations
oReview of potential approaches
oRecommended approach
• Discussion and Questions
• Next Steps
Current Cannabis
Regulations in SSF
• Ensure neighborhood compatibility
• Address potential safety and hazard issues
• Minimize potential environmental impacts
• Provide opportunities for economic development
• Provide safe access to medicinal cannabis
4 Purpose of Cannabis Programs and Regulations
5 Current Cannabis Regulations
2 Required
approvals
• Conditional
Use Permit (5
years)
• Operator’s
Permit
(renewed
annually)
1 Conditionally
Permitted Uses
• Delivery-only
retail
• Testing
• Manufacturing
• Distribution
• Indoor
cultivation
3 Geographic
limit
• Outside of
buffers
• E of Highway
101
4 600-foot Buffer
• Residential
• Sensitive uses,
including:
• Schools
• Daycare
centers
• Youth
centers
Where Cannabis Businesses Are Currently Allowed
6 Current active cannabis businesses
in South San Francisco:
• 3 delivery-only retailers E101
7 Current Cannabis Uses Conditionally Permitted
Allowed cannabis uses:
• Delivery-only retail
• Testing
• Manufacturing
• Distribution
• Indoor cultivation
Retail Storefront Cannabis:
Key Program Components
9 Key Program Components for Retail Cannabis
1 LOCATION Geographic limits, commercial / industrial districts, buffers from sensitive uses, overconcentration criteria
2 NUMBER OF RETAIL
STOREFORNTS Citywide cap, or initial cap
3 APPLICATION/PERMIT
PROCESS
Selection process, review and approval criteria, required permit, approving body
4 PERFORMANCE
STANDARDS
Security, safety / hazardous materials, design and
signage, transparency, odor control
5 FISCAL APPROACH Revenue potential, business viability, market interest
1. Location:
Where should storefront retail be
permitted?
Establish Buffers:
• Sensitive Uses
• Residential zoning districts
• Other Cannabis Uses (to avoid
overconcentration)
11 Location Approaches
Allow or restrict geographically:
• Set geographic limits (such as
only E of 101)
• Restrict in sensitive districts (such
as no Cannabis Uses in
the Downtown)
• Permit only in commercial
and/or industrial zones
• Designate one or more
“cannabis districts”, with one
retail cannabis use per district
Regional Context
12 13
Cannabis Location Approaches in Other Jurisdictions
City Approach
Belmont 1 Cannabis overlay Zoning District (S-3) along the South ECR, in a high-transit area overconcentration buffer, sensitive use buffer
Daly City 7 Cannabis Overlay Zones in Commercial Districts, sensitive use buffer Pacifica 5 Cannabis overlay zones in Commercially zoned districts (some overlap with downtown), sensitive use buffer
Redwood City Permitted in all zoning districts that allow general retail, sensitive use buffer San Bruno Permitted in commercial, industrial, mixed-use districts, sensitive use buffer Santa Cruz Permitted in Commercial and Industrial Districts, not permitted in Downtown, sensitive use
Santa Rosa Permitted in commercial / industrial districts, sensitive use buffer, overconcentration buffer
Approaches considered:
• Implement a minimum 600-1,000- foot buffer around sensitive and residential uses.
• Allow in all zoning districts that allow
retail and maintain sensitive use
buffer.
• Designate overlay zones.
• Allow only in industrial and
manufacturing zones.
14 Staff Recommendation
Staff recommendation:
• Commercial districts East of 101
• El Camino Real Commercial corridor
• 600-foot buffer from sensitive uses
Proposed Storefront Retail Areas
15 East of 101
Aerial map of El Camino Real
16 2. Number of storefronts:
How many should be allowed?
Approaches considered:
• No numerical cap
• Numerical cap, citywide
• Numerical cap per geographic area /
district
• Limit number of retail cannabis
locations through zoning standards
• Set initial numerical cap and revisit
Staff recommendation:
• Initial numerical cap citywide
• Allow three retail storefronts to start
• Revisit after monitoring period to adjust or
eliminate cap
18 Staff Recommendation
3. Application Selection
What should the permitting process be?
20 Permitting Approaches: Other Cities
Cities Application and permitting process
Belmont Prequalification review; Rezoning, City Council review / approval for CUP Daly City Lottery of eligible applications (if more than one); staff-level business license review and approval
Pacifica Multi-phase application and lottery; Cannabis application permit approval by Planning Commission
Redwood City Pre-screening for eligibility, merit scoring; City Manager selection San Bruno Pre-screening for eligibility, City Council review / approval (multi-phase: operator’s permit & CUP)
Santa Cruz Administrative Use Permit (Zoning Administrator Approval) Santa Rosa Discretionary application; Planning Commission review and approval for CUP 21 Application Process Options
• Administrative staff-level review /
approval
• Top scoring applicants based on set
criteria; City Manager approval
• Planning Commission review / approval
• City Council review / approval
Staff-level
Public
hearing
Staff recommendation:
• Maintain current process
22 Staff Recommendation
Current process:
• Operator’s Permit (renewed
annually)
• Staff from all relevant
departments review application,
and apply Conditions of Approval
• CUP (renewed every 5 years),
reviewed / approved by Planning
Commission
4. Performance Standards:
Are additional standards needed for retail
storefronts?
Current Standards:
• Design
• Signage
• Transparency
• Product location / visibility
• Odor Control
• Hours of operation
Staff Recommendation:
Implement additional standards, specific to
retail:
• On-site security guard
• No on-site consumption (*on-site
consumption lounge is a different
land use, not currently being
contemplated)
• No loitering / signage stating this
• Require a visible entryway from public
right-of-way
24 Staff Recommendations
5. Fiscal Approach
What is the appropriate tax rate?
City Tax Rate
Belmont Tiered
Daly City Tiered from 1-4%
Redwood City 4%
San Bruno 6%,
Pacifica 6%
San Francisco *0% (until 2036)
Santa Cruz 7%
Santa Rosa 3%
Cannabis storefront retail tax rates in other jurisdictions What was considered:
• SSF voters approved maximum of 5% tax
on cannabis businesses
• Lower tax rate does not appear to directly
increase retail sales
• Up to 6% tax rate is supportable / viable for
businesses (but would require voter
approval)
• Total tax revenue would increase with
number of stores, but per store sales may
decrease
Staff recommendation:
• Impose tax rate of 5%
27 Tax Rate Considerations
Next Steps
• Draft ordinance
o PD, PW, Fire, Finance, CAO, and CMO will all review
• Planning Commission
o Including public hearing notices for the Zoning Text Amendment • City Council
o Including public hearing notices for the Zoning Text Amendment 29 If Council would like to proceed with storefront retail… Council Feedback on Key
Program Components
31 Council Feedback
Location How Many Application
and Permitting
Process
Performance
Standards
Tax
Approach
With these program components in mind, is there consensus to proceed with retail storefront cannabis?
Cannabis Study Session
City of South San Francisco
THANK YOU