San Francisco has recently made a decisive move in its regulation of the cannabis industry. On June 6, 2023, the San Francisco Board of Supervisors unanimously approved an ordinance putting a halt on accepting new applications for retail cannabis licenses in the city until 2028, though existing applications will continue to be processed.
The Implications of the Moratorium
Supervisor Ahsha Safaí, the author of the proposal, introduced a “sunset” amendment, setting a Dec. 31, 2027, expiration date for the ordinance. At that point, the city may resume accepting new applications for retail licenses.
The moratorium appears to be more of a short-term move rather than a long-term ban. This amendment, the sunset clause, seems to have garnered the ordinance much of its support among the Board of Supervisors. Supervisor Dean Preston, who has expressed skepticism about legislation that could stigmatize cannabis use, was won over by the inclusion of the sunset clause.
Understanding the Cannabis Market in San Francisco
To understand the implications of this moratorium, it’s crucial to understand the nature of the cannabis market in San Francisco. As Safai noted, the cannabis industry isn’t operating “in a free market” due to a lack of access to traditional banking services and competition from illicit dealers who supply “60% of the market.”
As of now, the city has 72 active retail licenses, and there are 100 pending applications for new retailers. In terms of per capita cannabis retail outlets, San Francisco is ahead of other California cities, with nearly 9 pot shops for every 100,000 people, compared to San Diego’s 2.6 and Los Angeles’ 1.8. However, it lags behind other West Coast cannabis cities like Portland, which boasts more than 34 pot shops for every 100,000 people.
Potential Impact on Cannabis Equity
The moratorium has been met with mixed reactions, with some fearing that it could impact the city’s efforts to foster cannabis equity. The city has invested millions into its cannabis equity program, aimed at helping individuals who have been negatively affected by the war on drugs succeed in the new legal industry. Critics of the proposal argue that it could disproportionately impact marginalized people who are still trying to navigate the application process.
While the moratorium will enable the city to focus on processing existing equity applications, it does not provide an additional window for social equity applicants who have not yet applied for a license, as recommended by San Francisco’s Office of Cannabis. This raises concerns about the legislation’s effect on marginalized groups looking to gain entry into the industry.
Looking Forward: Evaluating the Ban’s Effectiveness
Despite these criticisms, a spokesperson for Safai’s office revealed that the lawmaker supports conducting a study by 2027 to evaluate the effectiveness of the ban. This could offer crucial insights into how the moratorium has influenced San Francisco’s cannabis landscape, both in terms of its effect on the corporate cannabis monopoly and on cannabis equity.
As the cannabis industry continues to evolve, and as cities like San Francisco navigate the delicate balance between regulation, equity, and profitability, this moratorium will serve as a critical case study in municipal cannabis policy.
