The city of Fresno is losing millions of dollars in projected tax revenue because marijuana retail stores have yet to open.
When the city council approved last year’s budget, it anticipated $4.3 million in taxes from cannabis. That number is estimated at $8.7 million annually for future years, including Fiscal Year 2023.
So far, no marijuana retailers have opened in the city. That means Fresno has not collected any tax revenue. However, city spokeswoman Sontaya Rose said that higher-than-expected general sales tax revenue “will offset the absence of cannabis revenue.”
The 20 licensees are in various stages of readiness to open. One necessity is a city-issued conditional use permit — specific rules of what will be and won’t be allowed at a business.
Only one retailer, The Artist Tree at 7835 N. Palm Ave., Suite 102, received its CUP. But it has yet to open because of supply chain issues — specifically millwork to complete the space. The store hopes to open later this month.
Others are just waiting things out. Only eight have had public hearings — all at the lower-level citizens’ review committee.
Four retailers have not even submitted their CUP as of last week. The city would not share the names. All retailers have until July to file a completed CUP application.
CUP Approval Time ‘Could Be a Lot Worse’
“Even though it’s taking a long time, it hasn’t taken as long compared to some of my other projects. … It could be a lot worse.” — Christopher Hester, Infinity Assets Fresno
Christopher Hester is part-owner of Infinity Assets Fresno, which is slated to move into the Valley First Credit Union at 618 E. Shaw Ave.
Infinity Assets received its license last fall. It eyes an August opening while awaiting CUP approval.
“Even though it’s taking a long time, it hasn’t taken as long compared to some of my other projects,” Hester said without naming the other cities. “It could be a lot worse.”
Hester says that when it comes to the necessary real estate permits, both the cannabis industry and city are green.
“The experience level is getting a lot better. But you got to remember, California is already extremely difficult to do real estate development,” Hester said. “When you’re going into cannabis and trying to do these deals, you have to know that these things are going to take two years. If you don’t, you’re making a critical error in (the) timing of your project.”
Fresno Farms Faces Objections
In southeast Fresno, a fenced-off dirt area sits between an appliance store and another empty lot occupied by homeless people.
Fresno Farms wants to build at 3849 E. Ventura Ave., but has problems beyond waiting for a CUP. Under the best-case scenario, it would be in business for just a year.
Across the street, Fresno Unified School District is building the Farber Education Center. The distance is less than 500 feet, closer than the 1,000 feet mandated by city law. Fresno Farms estimates a one-year build; the educational center plans to open by 2024.
The retailer plans to move as soon as it can, believing it can transfer its license to a new location.
“Once we can get that transfer achieved, we will immediately move. And so there will be no time, obviously, that we’re open there when there’s a school there,” co-owner Jessica Reuven said. Reuven said they would move now if allowed.
The proximity was one reason why the District 5 Project Review Committee voted 3-1 at its April 11 meeting not to recommend a CUP for Fresno Farms. Its location near liquor stores was another reason for the opposition.
The committee’s vote is only advisory to the city’s planning director, who issues the CUP. At the same meeting, the committee voted 2-1 to recommend another retailer, Culture Cannabis Club.
The Future of Fresno Marijuana
There are supposed to be three retail locations in each of the seven city council districts, but redistricting created an imbalance. District 4 now has four licenses, while District 7 has one.
The Fresno City Council recently passed a bill to restore the balance when new licenses are awarded. That means the next license would go to District 7.
Also, if the city expands beyond 21 licenses, the next license would go to District 7 as well. In theory, of the next seven licenses awarded after that, District 4 would be last in line.