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. The 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.

Stepping into 2022, CREC continues to offer one stop shop consulting services nationwide. To save your time and to better assist your cannabis business operation or expansion, we would like to provide you with the industry insight so you can make the best decision for your business!

In this blog post, we present you the Upcoming California Cannabis Markets to Watch in 2022.

1. 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.  

Use Types: 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.

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


 

2. City of Riverside

Why: The city of Riverside is in the early stages of developing an adult use cannabis ordinance that would bring up to 14 dispensaries to one of the largest remaining cities in California without an adult use cannabis industry.

Uses: Retail, distribution, non-storefront delivery, (possible Microbusiness with cultivation)

Application Window: TBD. The city is working on a draft ordinance that will be available late May at the earliest. The city is aiming for a November effective date for the ordinance if they don’t include microbusiness and February if they do include a micro business use.

View Riverside County, CA Real Estate & Cannabis Regulations 


 

Beach cities in Los Angeles:

Why: These four 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.

3. Hermosa Beach

4. Manhattan Beach

5. Redondo Beach

6. El Segundo


 

7. Huntington Beach

Why: Huntington Beach currently has a citizen led ballot initiative set to be placed on the 2022 November ballot to be voted on by residents. City council members recently voted to form an ad hoc advisory committee to explore the option of the city developing its own cannabis ordinance, either to place as a competing ballot measure or to be enacted by council before the election. The city will also be voting on a cannabis tax initiative in the summertime.


 

8. Hawthorne

Why: The city of Hawthorne has directed staff to begin development of an ordinance to allow a large variety of cannabis uses in the city, including the rarely available consumption lounge license type.  

Proposed Use Types: Cultivation, manufacturing, distribution, non-storefront retail delivery, storefront retail, testing and consumption lounges

Proposed Application Timeline: A Cannabis Ad Hoc committee has been meeting for several months with interested members of the community to carefully design setback and location requirements for where these businesses will be allowed to operate and is expected to make final recommendations to city council soon.  Following this, city staff will begin final preparations on an ordinance.  Expected timeline: 3-6 months to applications.


 

9. 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.

Use Types: 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%

 

 11. South El Monte

Why: The residents of South El Monte will be voting on an adult-use cannabis ballot proposal during the 2022 election, to allow 5 dispensaries, 2 cultivation, 1 testing, 2 total manufacturer or distributor licenses. 

Application Timeline: If the ballot proposal is approved, the city will subsequently need to draft and pass two readings of a cannabis ordinance to enact the law, which will take thirty days to go into effect.  We expect it will be several months before the city is ready to accept applications. 

Real Estate Market:

  • Rent/SF: $1.28
  • CAGR: 5.54%
  • Sales Price/SF: $188/PSF
  • CAGR: 6.62%

 

12. Madera, CA

Why: The city of Madera recently adopted an ordinance to allow up to 8 retail licenses, 2 of which will be reserved for social equity candidates.

Application Timeline: The city is now open for applications through June 20th.

Real Estate Market:

  • Rent/SF: $0.85
  • CAGR: 2.97%
  • Sale Price/SF: $197
  • CAGR: 9.71%

 

13. Woodland City

Why: Woodland City unveiled a draft ordinance on May 3rd to allow up to four adult use retail licenses in the city.  These licenses will be the newest retail opportunities available in the Sacramento metropolitan area.

Uses: four storefront retail licenses.

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


 

 

14. 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


 

 15. Santee

Why: The city of Santee in San Diego County is in the very early stages of considering adult use cannabis businesses in the city, including retail.  While the mayor of the city currently opposes cannabis, the majority of the city council decided to move forward with exploring options for a cannabis program.  Considering cultivation, dispensaries, distribution, testing, and microbusiness.

Proposed Uses: Considering retail (up to three licenses), testing, cultivation, distribution and microbusiness containing three of the following license types: (retail, distribution, cultivation, and/or manufacturing)

Setbacks: Leaning towards 600-foot setback for dispensaries from “sensitive” sites such as schools, daycare centers and playgrounds. 

Tax: Consultants suggested a tax rate on sales between 4 and 12 percent.

Application Timeline: The city hopes to have an ordinance finalized in July following final CEQA approval, with a fall application period to follow.

Real Estate Market:

  • Rent/SF: $1.59
  • CAGR: 3.51%
  • Sale Price: $234/SF
  • CAGR: 7.46%

 

16. 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


 

17. 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.


 

18. 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 


 

19. Anaheim

Why: The city of Anaheim is one of the largest cities in the state without a legal cannabis program.  A city resident has begun collected signatures to place a ballot initiative on the upcoming election that would allow between 20-25 dispensaries in the city.

Uses: Storefront Retail

Application Timeline: TBD.  If voted for in the upcoming election, city council would need to enact an application process and than announce application dates.

 


 

20. 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


 

21. San Bruno

Why: San Bruno is in the early stages of developing an adult use cannabis ordinance to allow two retail licenses, one delivery license, and additional cannabis uses as well.

Uses:  Storefront Retail, Delivery, manufacturing, distribution, testing.

Application Timeline: City council and staff hope to have an ordinance complete and voted on by early fall with an application period to follow in late fall or early spring.


 

About Mitch Kraemer

MARKET RESEARCH ANALYST

Mitch is a market research analyst at Cannabis Real Estate Consultants. He brings a desire for research and has a strong sense on market movements and emerging markets for cannabis real estate / business opportunities.

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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