Upcoming California Cannabis Markets to Watch in 2023

Innovating into 2023 and beyond, CREC continues to evolve the industry with a range of services nationwide to support operators and landlords. To save your time and to better assist your cannabis business operation or expansion, we would like to provide you with these industry insights on California cannabis markets so you can make the best decision for your business!

The cannabis industry has grown dramatically in recent years in response to expanding legalization and a flood of capital from venture capital firms and other investors.

Legalization and sale of cannabis are advancing rapidly not only in the U.S. but globally. California as the first state to legalize marijuana and the largest cannabis market in the world, is certainly leading the industry and we get to know more and more cities that are coming online.

In this blog post, we present to you our best recommendations on markets to target in the future for deciding where to open a cannabis business in California.

We use our technology and research team to determine the best locations to open a cannabis business and ready to help you expand into these new California markets for cannabis.

Our Top Upcoming California Cannabis Markets:

1. Woodland
2. Huntington Beach
3. Riverside
4. Los Angeles
5. Long Beach
6. Redondo Beach
7. Hawthorne
8. San Bruno
9. El Segundo
10. Manteca
11. Monterey
12. Brisbane
13. San Diego County
14. Santa Ana
15. San Benito County
16. Dana Point

Our Top Open California Cannabis Jurisdictions:

1. Riverside County
2. Antioch
3. Napa

Commercial Cannabis Friendly Cities in California

NOTE: Anaheim, Santee, South el Monte all are not likely to pass cannabis and Madera has closed applications, so they have been removed from the list.

1. Woodland City

Why: Maximum of six total conditional use permits for commercial cannabis manufacturing, distribution and/or testing

Licenses: Four storefront retail licenses

Timeline: the city has completed its adult use ordinance and is currently working on application materials. An application period is expected to open up soon

2. Huntington Beach

Why: Up to 10 total Commercial Cannabis Permits for storefront Retailer, Delivery only, and storefront/Delivery Retailers may be issued. No more than one (1) Retail Permits shall be issued to the same Owner(s).

Licenses: retail, delivery, manufacturing, indoor cultivation, distribution, testing

Timeline: City will be discussing during their July 5th city council meeting whether to place its ordinance on the November ballot or to move forward directly with city council passing the ordinance

3. City of Riverside

Why: 14 retail licenses, no caps on other license types

Licenses: Distribution, Testing Laboratories (currently allowed), Delivery-Only Cannabis Dispensaries, and Storefront Cannabis Dispensaries

Timeline: City hopes to finish the ordinance in either November if a final ordinance does not include microbusiness and cultivation licenses, or in February if it does

View Riverside County, CA Real Estate & Cannabis Regulations 

4. Los Angeles

Why: The city of Los Angeles is expected to reopen its social equity licensing for a final round this winter

Licenses: DCR will select approximately 125 applicants for further processing using the retail license lottery.

Timeline: DCR anticipates that the cannabis retail license lottery will occur in winter 2022-2023
However, the most important step to take right now is to apply for social equity verification. The deadline to apply is July 25th, so now is the time to find your documentation and get verified.

Beach cities in Los Angeles: These 2 cities all have cannabis ballot initiatives set to be voted on in upcoming elections, and the respective city councils all have to decide whether to try and pass a competing city-led cannabis ordinance in order to control where businesses may be allowed to operate. We expect some direction soon from these city governments.

View City of Los Angeles Real Estate and Regulations

Hermosa Beach

El Segundo

5. Long Beach

Why: Long Beach will have 8 new social equity retail storefront licenses available this July for application

Licenses: Require at least 51% ownership by social equity applicants

Timeline: Applications will be accepted for 1 month

View Long Beach, CA Real Estate and Regulations

6. Redondo Beach

Why: City of Redondo Beach has developed an ordinance to be placed in front of voters in the upcoming election for

Licenses: 2 retail licenses

7. Hawthorne

Why: City of Hawthorne has had a cannabis working group developing their ordinance for several months and will soon submit a final report to city council for final approval and recommendations.

Licenses: 6 total storefront retail licenses, 1 reserved for social equity, 2 additional stand alone delivery only retailers.  3 may have consumption lounge license attached
3 additional stand alone consumption lounge licenses without a retail component. (considering separate cap for stand alone delivery). Considering indoor cultivation, manufacturing, distribution, testing.

8. San Bruno

Why: San Bruno is in early stages of developing an adult use ordinance to allow storefront retail licenses in the city

Licenses: The city plans on two storefront retail licenses and one delivery licenses.

9. El Segundo

Why: The city of El Segundo will have adult use cannabis on the November ballot

Licenses: The city has not yet placed a cap on number of licenses

Timeline: Retail will roll out first as the city considers other license types

10. Manteca

Why: The city of Manteca passed its adult use cannabis ordinance on December 21s, 2021 and the ordinance will go into effect on January 21st.  

Licenses: Storefront and non-storefront Retail

Setbacks: Cannabis businesses must be a minimum of 600 feet from any sensitive use, school (whether public, private, or charter, including pre-school, transitional kindergarten, and K-12), commercial daycare, or youth center (includes parks and playgrounds), substance abuse rehabilitation centers, emergency shelters, religious assembly uses, parks, libraries.

Timeline: TBD.  The city is currently developing application procedures and we expect them to announce an application window soon.

11. Monterey

Why: Staff has been directed to move forward with the Cannabis Roadmap, which includes consideration of as few as one and as many as three cannabis retailers total in the City of Monterey, located in the downtown (except Alvarado Street), Lighthouse District, and Cannery Row Business District (except Cannery Row itself). Council also stated that it would consider cannabis retail operations on Cannery Row and at the Monterey County Fairgrounds at some point in the future.

Licenses: Retail, special events, testing, manufacturing, delivery

Proposed setbacks: State standard 600 feet from schools, youth centers, and daycare centers. 

Application Timeline: The city originally hoped to complete an ordinance and begin the application process late fall, but still has many steps ahead of it to finalize its ordinance.

Real Estate Trends:

• Rent/SF: $1.87/SF
• CAGR: 2%
• Sales Price/SF: $206/SF
• CAGR: -5%

12. Brisbane

Why: The city of Brisbane is considering expanding its allowed cannabis uses to include retail licenses.

Application Timeline:  the city is in the very early stages of considering adult-use retail and expects to bring a draft ordinance to city council this spring.

Real Estate Market:

• Rent/SF: $1.57/SF
• CAGR: 4.98%
• Sale Price/SF: $278
• CAGR: 11.1% 

View Available Brisbane Listings

13. San Diego County

Why: The county of San Diego is in the early stages of developing an ordinance to allow adult uses in  the unincorporated areas of the county, including cultivation, manufacturing, retail and distribution.

Application Timeline:  6 months – year before anything concrete is ready 

Real Estate Market:

• Rent/SF: $1.93/SF
• CAGR: .58%
• Sale Price/SF: $299
• CAGR: 6.72%

View Available San Diego County Listings

14. Santa Ana

Why:  The city of Santa Ana recently held the first reading of an ordinance to allow up to five additional retail licenses in the city, as well as allowing cannabis retailers to add consumption lounges to their locations.  In addition the city will be reducing the setback requirements for cannabis businesses and will allow existing retailers to relocate their businesses.  City council will soon also look at implementing a social equity program.

Uses: Retail, cultivation, distribution, and/or manufacturing, or laboratory testing, consumption lounges.

Application Dates: Open for all non-retail uses.  Retail application dates TBD, the city must first hold a second reading of the ordinance amendment which will then go into effect 30 days later at the earliest.  The city will likely wait for social equity changes before moving forward with another application period for retail.

15. San Benito County

Why: San Benito County’s Planning Commission recently made recommendations to the board of supervisors to allow storefront retail and outdoor cultivation in the county, in addition to lifting the cap on non-storefront retail in the county.

Application Timeline: An ordinance amendment still must be brought forward and voted on by the board of supervisors.  There is no current timeline for when applications will be received but we can expect updates in the near future on a potential application period in the next few months.

Real Estate Market:

• Rent/SF: $1.10
• CAGR: 3.89%
• Sale Price/SF: $117/SF
• CAGR: 4.27% 

View Available San Benito County Listings 

16. Dana Point

Why: Dana Point recently directed staff to research potential locations and restrictions for cannabis businesses in preparation for further discussion.  The city is discussing adding retail cannabis businesses to the city.

Likely Uses: Storefront retail, manufacturing, distribution, testing.

Application Timeline: TBD

We Help Find the Best Commercial Cannabis Friendly Cities in California that Allow Cultivation and Other Licenses

About Mitch Kraemer

Mitch’s analytical mindset and the robust CREC Portal allow him to stay up to date on jurisdiction, municipality, and state changes for cannabis regulations. Mitch’s research is vital to our real estate brokerage due to his vast knowledge and understanding of upcoming or current cannabis regulations.

Contact us to for further analysis of CA retail opportunities to get out ahead of the game, with the knowledge to make more effective, and less risky decisions for your expansion strategy.

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