Stanton City Council members took the first steps in approving cannabis delivery services in an effort to bolster the city’s finances.
“The sooner we get that going, the sooner we can start getting some tax revenue to take care of the concerns of our constituents,” said Mayor David Shawver of the delivery services.
City council members also extended deadlines for cannabis cultivators that did not meet the original one, which was November 2023.
The council voted unanimously during the March 26 city council meeting to approve recommendations from the planning commission, including cannabis delivery and reopening the applications to current retail pot shops to deliver their products.
“The state allows you to automatically deliver from a storefront retail location, unless the city specifically does not allow it or requires you to have a separate permit,” said Devon Julian, CEO of Cannabis Culture Club, during the meeting’s public comment section.
Julian said there’s been a level of uncertainty since opening the shop.
“We all had assumed that we were going to be able to launch delivery after opening our storefronts for a bit after having customers come in, get used to our stores, and then once we have that option, offering it as a convenience,” he said.
Meanwhile, city staff said Stanton’s been missing out on tax revenue.
“Although the City issued four delivery permits, none of the permittees were able to become operational within two years by the November 2023 deadline. At this time, the City has an opportunity to benefit from the additional sales tax and cannabis tax that delivery could bring in,” reads a staff report.
The tax rate is slated to be 6% from cannabis sales tax. The delivery services could be at 8% because of deliveries outside of Stanton, however staff said they would study delivery taxes from businesses like Amazon and Doordash to bring back the findings at a later city council meeting.
At the March 26 meeting, staff said businesses could be offering delivery services by June if the ordinance came back to the council in April, with applications opening in May.
In 2020, permits were issued to 13 cannabis businesses which span retail, delivery, cultivation, manufacturing and distribution.
Stanton passed an ordinance in June 2020 which added regulations and zoning standards for commercial cannabis businesses. It also capped each type of cannabis business category at four, including retail shops and cultivation centers.
Currently, the only businesses with permits are the four retail storefronts, according to a staff report.
Changes to the municipal code in Stanton come at a time where some cities are still grappling with cannabis laws. Costa Mesa City Council recently looked to add a cap of 35 conditional use permits while Santa Ana has a cap of 30.
[Read: Costa Mesa Eyes Limiting Number of Cannabis Shops]
Shawver said he knew of a cultivation business that was no longer interested in having their business in Stanton because they had built one in Santa Ana recently.
“They don’t have to have their cultivation in our city. If they want to that’s great, but if they don’t want to, that’s fine too and it’s ok for us not to have cultivation. I don’t think any residents would complain,” said Councilwoman Hong Alyce Van who pointed out that extensions had already been given in support of their businesses.
Stanton city staff reached out to multiple cities in Southern California to see how they handle delays in cultivation businesses including Santa Ana, but said Long Beach was the most responsive citing electrical permits being a setback for permittees.
“The more these will pop up, the less likely it is for us to get these in our city. In fact I think we’re at a point where we’ll be lucky if we get a cultivation in our city, and we should do everything to make it enticing enough for people to do that because there is revenue,” Shawver said.
The council also voted unanimously to implement a tiered tax system that would collect $415,375.80 over 36 months from two cultivation businesses, according to a staff report.
“I think we’re still kind of seeing how retail does. I think it’s doing really great, I think we’re going to see how delivery does and how that revenue will play out and then maybe we don’t need cultivation, maybe the budget’s fine. We’ll see,” Van said.
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