The Riverside City Council voted Tuesday to cut the maximum number of cannabis business permits from 14 to seven, with only one permit allowed per ward. This marks a significant shift since the council first voted to allow retail operations in 2023.
In a 4-2 vote, with council members from Wards 4 and 6 dissenting, the council approved new regulations, including a 1,000-foot buffer between cannabis stores and designated parks as sensitive use areas requiring a 600-foot separation from cannabis businesses.
"I think a measured approach to this makes the most sense," said Councilmember Robillard. "Having seven, one per ward, really makes sense."
The decision follows a 90-day pause on the cannabis permitting process that began in January when five of the 14 originally approved locations clustered in Ward 5, with two others nearby in Ward 6.
Map shows the 14 originally approved cannabis dispensary locations, with five clustered in Ward 5. The City Council's decision to limit permits to one per ward will significantly reduce this concentration.
Deputy Police Chief Frank Assuma presented findings from the police department's research on public health and safety impacts of cannabis businesses. The report cited inadequate state regulations and a 146% increase in service calls around cannabis outlets. The department's investigation found that 71% of tobacco retailers visited were illegally selling cannabis products without proper licenses.
"The State of California's regulatory and quality controls are inadequate," Assuma said. "There is no clear delineation between legal and illegal cannabis retail stores."
Based on these findings, the police department recommended limiting permits to one per ward and establishing a minimum distance of 1,000 feet between retail cannabis storefronts.
Several applicants expressed frustration, citing significant investments already made. "In addition to spending upwards of $30,000 in application fees, we purchased a property in 2024 for a million dollars," said Tony DeSimone, co-owner of PAX Riverside.
Attorney Courtney Caron warned of legal consequences. "If you choose to move forward in this direction, the city is going to be sued," she told the council. "Everybody detrimentally relied on your promises when they signed these contracts, many of which are now irreversible."
Several speakers raised concerns that five of the top seven ranked applications belong to just two companies – STIIIZY and Embarc – which would give those operators control of more than 70% of the market.
"If you give the majority of these licenses to only two people, what happens if these companies fail or if they'reinvestigated or sued?" asked Kenneth Churchill of Riverside West Coast Retail. "With seven independent operators, the city protects itself and its residents from this kind of collapse."
Nicholas Adcock, President and CEO of the Greater Riverside Chambers of Commerce, supported the approach. "We think that easing our way into this process with seven operators, each no more than one per ward, is an appropriate method to understand how this industry will operate."
The council also approved changes to strengthen the permit transfer process, including:
- Requiring businesses to operate with the full ownership team for at least one year before any sale or transfer
- Prohibiting cannabis businesses in downtown and Midtown areas
- Requiring cannabis businesses to provide a current ownership register to the city manager twice yearly
Councilmember Cervantes, who made the motion to approve the changes, acknowledged the difficult position for applicants who have already invested in the process.
"I personally feel uncomfortable with where this has come to," Cervantes said. "I'm equally disappointed that there have been significant changes to what a lot of work has happened. I just want to say to those that will be impacted, if you're not one of the ones that move forward, I just want to extend my apologies to you."
Councilmember Mill noted that while the decision is difficult, it represents a compromise.
"I knew that this decision we were going to have to make was going to upset pretty much everybody," Mill said. "I'm a big believer in compromise. I believe that's what our role is, to try to get the best thing for our community."
The council will revisit the cannabis program in approximately nine months, potentially reconsidering permit limits after a year of operation. Meanwhile, the seven successful applicants will pioneer Riverside's cannabis market, with others left to pursue legal action or await future expansion.
