Why it matters: The San Francisco Board of Supervisors has implemented a four-and-a-half-year moratorium on issuing new cannabis business licenses. The move has been explained as a pause rather than a ban, meant to address oversaturation of the market and black-market sales, as well as threats to public safety in relation to break-ins and unregulated markets.
What they are saying: UCLA lecturer of public policy and adjunct professor at Pepperdine University Brad Rowe explained that while this would help dispensaries profit, it will also likely raise product prices for consumers. Other business owners addressed how this ban benefits the wealthy who have already opened up stores in the city.
The big picture: Although there are already 32 licensed medical cannabis dispensaries in the city, nine outlets for every 100,000 people, compared to 2.6 dispensaries for the same amount of people in San Diego or 1.8 in Los Angeles, the city has banned the granting of any more licences until 2027. The moratorium doesn’t affect current businesses or applicants, and the board of supervisors will then decide whether to end or extend the ban.
What to watch: Industry critics say it is unfair and will ultimately raise prices for customers. Current cannabis business owners argue that new businesses will harm existing operators, as they divvy up a finite legal cannabis market in San Francisco.
My take: The temporary ban is a cautious move in terms of controlling the profitability and pricing of cannabis within San Francisco and protecting social equity applicants. As the cannabis market becomes increasingly competitive, this could be a prudent decision to ensure that the market stays profitable and competitive for all stakeholders in the future.
