San Francisco Board of Supervisors Approve Ban on New Cannabis Businesses Through 2028

A temporary ban on cannabis businesses was approved to address concerns of oversupply, black market sales, and public safety in San Francisco.
San Francisco

The San Francisco Board of Supervisors voted on June 6 to implement a citywide halt on issuing new cannabis business licenses for the next four-and-a-half years. The 10 members of the board present at the time voted unanimously, although one person was absent.

Supervisor Ahsha Safai was the driving force behind the moratorium, who emphasized that this move will be temporary. “It’s a pause, not a ban and ultimately, we can revisit where this is in a few years,” he said, according to The San Francisco Standard

The San Francisco Standard also states that the move addresses concerns from local Asian American communities that oppose cannabis, which could be a move by Safai to appeal to the group while he campaigns to run for mayor of San Francisco in 2024.

Safai cites that his reasoning behind the ban is mainly due to oversaturation of cannabis product and black market sales, as well as threats to public safety in regards to recent robberies. In May, Safai spoke to the board about these concerns. “Let’s be clear—we have no shortage of cannabis retail storefronts, and many are suffering because of brazen break-ins, public safety concerns and an unregulated market that is not facing proper enforcement,” he said.

The San Francisco Standard states that there are 32 licensed medical cannabis dispensaries in and 31 recreational dispensaries within city limits, with an estimated 100 applications currently being processed. According to SFGATE, there are an estimated nine cannabis dispensaries for every 100,000 people in San Francisco, compared to only 2.6 dispensaries for the same amount of people in San Diego, and 1.8 in Los Angeles, although cities such as Portland, Oregon have 34 dispensaries per 100,000 residents.

Supervisor Dean Preston also added his support in the vote on June 6 because of the addition of the 2027 sunset clause. “What was initially proposed was more of a longer term ban,” said Preston, according to SFGATE. “These amendments go a long way in creating more of a short term moratorium that was the original intention.”

The moratorium will last through the end of 2027, when the board of supervisors will decide whether to end or extend the ban. The moratorium doesn’t affect currently existing cannabis businesses or applicants. The ban will go into effect 30 days after approval, which will be in early July.

Already existing cannabis business owners such as Johnny Delaplane, co-owner of Berner’s on Haight, told SFGATE that more dispensaries will only cause more competition and ultimately reduces success for everyone else. “There is a finite amount of legal cannabis market in San Francisco,” Delaplane said. “If it’s being divided up into 70 retailers and soon it will be 140 retailers, many of those retailers are going to fail.”

UCLA lecturer of public policy and adjunct professor at Pepperdine University, Brad Rowe, explained that while this would help dispensaries profit, it will also likely raise product prices for consumers. “There is a way to build value by restricting access,” said Rowe. “The problem is who is going to pay for it? Consumers are the ones who are going to pay with higher prices.”

Other business owners addressed how this ban benefits the wealthy people who have already opened up stores in the city. “It’s unfair,” said Posh Green owner Reese Benton. “It’s hard for a person like me to even get their first store open.”

According to Gift of Doja owner Nina Parks, an equity applicant who is currently in the middle of the application process, the ban will harm other social equity applicants. “It legislates limited access to opportunity, when what the equity program is supposed to do is open up access for marginal folks,” said Parks.

In some areas like Pasco, Washington, officials lifted a 10-year ban on cannabis, however recently in Amsterdam, a ban was implemented to prevent cannabis smoking in public. Like in San Francisco, other recreational cannabis states are also facing problems with oversupply. A recent report from Associated Press covered how cultivators have too much product, with not enough legal dispensaries open to sell and distribute flower, edibles, and distillate.

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