Legitimate cannabis retailers have a reputation for being cash generators.
And while that may be the case, those familiar with the two cannabis retailers operating in Banning for nearly a year would claim that, sure, they make money, but they are still struggling to be ideally profitable.
According to Councilman David Happe, Banning received at least $660,000 in sales taxes from retail cannabis sales in the first quarter of 2021, and that the yearly $2.7 million anticipated to be collected by the city will be surpassed.
But city officials had received concerns from the two operations that a proposal to remove a current cap of one retailer per 10,000 residents (at the moment, with Banning’s population hovering around 30,000, the cap is three dispensaries) — would impede their ability to survive.
Adam Rush, Banning’s Community Development director, told councilmembers during a public hearing on the matter “I do not believe elimination of a cap would be productive,” and suggested the city consider a merit-based, rather than a lottery-based retail cannabis selection process.
Rush said that there had been an expectation “that the cannabis program would hit the ground running” and demonstrate success by the end of 2019, and claimed that predictions made by previous administrations were overly optimistic.
Rush described “pushback” from those who participated in the lottery, but were not selected — some who were more ready to start their business than the ones currently permitted.
A third cannabis retailer who won a slot through the lottery did not sound like it has a promising chance to open before options to do so expire in February 2022, fueling ire from critics who indicated they had the resources to open, and a more promising desire to do so.
“Having a lottery doesn’t allow us to choose the operators we want to have in the city like we do with other businesses,” Rush said.
City Attorney Kevin Ennis said that relying instead on a rigorous merit methodology could invite litigation, and that a process involving a first come, first completed application process would be more objective and easier to apply, though noted it would not address concerns about quality.
Happe declared that he was “not endorsing a lottery system anymore.”
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