San Francisco regulator approves ban on new cannabis companies through 2028

San Francisco’s board of directors voted June 6 to introduce a citywide freeze on new cannabis business licenses for the next four and a half years. The 10 board members present at the time voted unanimously, although one person was absent.

The driving force behind the moratorium was Supervisor Ahsha Safai, who stressed that the move was only temporary. “It’s a pause, not a ban, and ultimately in a couple of years we can revisit where we are,” he said, according to The San Francisco Standard.

The San Francisco Standard also says the move addresses concerns from local Asian-American communities opposed to cannabis, which could be Safai’s attempt to appeal to the group while he runs for mayor of San Francisco in the US applied for in 2024.

Safai says his rationale for the ban is mainly based on the glut of cannabis products and black market sales, as well as public safety threats related to recent robberies. In May, Safai spoke to the board about these concerns. “To be clear, we have no shortage of cannabis retail outlets, and many suffer from brazen burglaries, public safety concerns and an unregulated market lacking proper enforcement,” he said.

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

Supervisor Dean Preston also reiterated his support for the inclusion of the 2027 sunset clause in the June 6 vote. “What was originally proposed was more of a longer-term ban,” Preston said, according to SFGATE. “These changes go a long way toward creating more of a short-term moratorium that was originally intended.”

The moratorium applies until the end of 2027, when the supervisory board will decide whether to end or extend the ban. The moratorium will not affect any currently existing cannabis businesses or applicants. The ban will come into effect 30 days after approval, i.e. at the beginning of July.

Existing cannabis business owners like Johnny Delaplane, co-owner of Berner’s on Haight, told SFGATE that more dispensaries would only lead to more competition and ultimately reduce success for everyone else. “There is a limited amount of legal cannabis market in San Francisco,” Delaplane said. “If it’s split into 70 retailers and soon it’s 140 retailers, a lot of those retailers are going to fail.”

Brad Rowe, an associate professor of public policy at UCLA and an associate professor at Pepperdine University, explained that while this will help pharmacies make profits, it will also likely increase product prices for consumers. “There’s a way to add value by restricting access,” Rowe said. “The problem is, who is going to pay for this? Consumers are the ones who will pay higher prices.”

Other business owners spoke about how this ban will benefit the wealthy people who have already opened shops in the city. “It’s unfair,” said Posh Green owner Reese Benton. “It’s difficult for someone like me to even open your first business.”

According to Gift of Doja owner Nina Parks, who is currently in the midst of the application process, the ban will hurt other Social Justice applicants. “It mandates limited access to opportunity, while the equity program is designed to open access to marginalized groups,” Parks said.

In some areas like Pasco, Washington, officials lifted a ten-year cannabis ban, but a ban was recently introduced in Amsterdam to discourage smoking cannabis in public. Like San Francisco, other recreational cannabis states are struggling with oversupply. A recent report from the Associated Press addressed growers having too many products and not enough legal dispensaries open to sell and distribute flowers, edibles and spirits.