Title
a. Receive and accept the Cannabis Program update on performance indicators for Fiscal Year 2022-2023; and
b. Provide direction to staff as appropriate.
Report
RECOMMENDATION:
It is recommended that the Budget Committee:
a. Receive and accept the Cannabis Program update on performance indicators for Fiscal Year 2022-2023; and
b. Provide direction to staff as appropriate.
SUMMARY/DISCUSSION:
In the Fiscal Year (FY) 2021-22 report to the Board of Supervisors (Board) Budget Committee, the Cannabis Program (Program) provided an outlook of the commercial cannabis industry which faced several crises: significant declines in wholesale pricing due to statewide oversaturation of commercial cannabis, a growing unlicensed market, winter storms that caused flooding and mold, a resurgence of the Hop-Latent viroid, and ongoing financial hardships due to a lack of access capital. Although the message is somewhat the same for FY 2022-23, the remaining businesses, 9 retail and 58 non-retail, in the County of Monterey (County) were able to sustain themselves through the uncertainty while continuously working to achieve local compliance.
Industry articles reinforce that the industry faces a difficult outlook due to ongoing oversupply, the state's high taxes, and challenging regulations. These stories also predict consolidations that will continue and accelerate, the difficult licensing deadlines for social equity applicants, a decrease in state grant awards, and reduced products on retail business shelves. Despite this adversity, here are highlights of our County's commercial cannabis industry from FY 2022-23:
* 18 land use permits were approved by Housing and Community Development (HCD).
* 22 Cannabis Business Permits (CBP) were issued by the Program.
o 219 state commercial cannabis licenses, or 68%, are eligible to convert from provisional to annual.
* 34 commercial cannabis business closed operations.
o The most common reason for closure was insolvency, followed by pro...
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