Costa Mesa currently has no legal cannabis dispensaries, according to the city’s spokesperson, Tony Dodero.
The city hasn’t placed a cap on the number of retail cannabis businesses allowed.
After the city began accepting applications for the first phase of dispensaries on Aug. 12, with the second phase beginning Sept. 13, 70 different storefront and delivery applications have surged into the city’s portal, with more likely to come.
Costa Mesa’s 20 some drugstores are mostly CVS and Rite Aid, among a few other lesser-known brands.
The applications come as Costa Mesa citizens passed Measure X in 2016, which allows certain nonretail cannabis uses such as manufacturing, distribution, processing, transportation, and more in an industrial area of the city, north of the 405 freeway and west of Harbour Boulevard, known as the “Green Zone.”
Last November, residents also passed Measure Q by a 65 percent margin, which allowed the city to adopt rules permitting retail cannabis storefronts and delivery businesses.
The measure imposed a 7 percent tax on cannabis products, which is believed will bring in $3 million to the city’s general fund, which will be coupled with sales and state tax, causing products to have a 30 percent overall tax for customers.
Since Measure Q’s passing, cannabis stores in the city need to receive conditional use permits in order to operate, with the city currently going through 15 applications at a time.
Many of the stores are along Newport Boulevard, Harbor Boulevard, and Bristol Street due to strict rules that they cannot operate within 1,000 feet of K–12 schools, daycares, playgrounds, or homeless shelters, or 600 feet from youth centers.
The first phase of the city’s applications allowed already-open cannabis businesses within the green zone, and those that are part of the city’s equity program, to apply first. The second phase enabled anyone not allowed in the first phase to apply.
The equity program is designed to allow felons who were convicted previously for marijuana-related charges in Orange County to get a chance to become a part of the industry given its new legal status.
The legal dispensaries are also allowed in hopes that the city will be able to get rid of its illegal operations, with three businesses under active investigation, four in discussion with the city attorney, and 28 closed down, although concerns have been expressed that the illicit dispensaries will still operate due to the high taxes levied on the legal businesses.