Commercial Cannabis Uses

The City of Grover Beach has taken the lead in San Luis Obispo County in allowing both adult (recreational) and medical commercial cannabis uses in a safe and responsible manner. The City Council has identified the commercial cannabis industry as an economic development opportunity in its Economic Development Strategy and City Council Goals for fiscal year 2018-19. Beginning in 2016, the City Council held numerous public meetings that culminated in the adoption of the City's commercial cannabis ordinances in May 2017. Since then the Council has made several amendments to the ordinances, including allowing adult use in May 2018. The City has developed this cannabis webpage to provide potential cannabis businesses along with the general public with a guide to the allowable uses and locations within the city, current ordinances, permit application process, and the City's adopted cannabis tax structure. As of April 2021, the City has approved 27 cannabis businesses with 12 businesses currently operating and several additional businesses currently in the building process.

Commercial Cannabis Uses Allowed

The City allows adult and medical uses for manufacturing (volatile and non-volatile), distribution, cultivation within an enclosed building, testing laboratories and retail uses. There is no limitation on the number or type of uses except for retail uses, which are limited to four businesses. The Council has approved the four retailer permits; therefore, the City is currently not accepting applications for retail uses, with or without storefronts (i.e., mobile deliveries).

Commercial Cannabis Ordinances

The City has both a Land Use and a Regulatory Ordinance to implement commercial cannabis uses. The Land Use Ordinance (PDF) contains the regulations on the allowed locations, minimum setback and development standards which are contained in GBMC Article IX Development Code. The Regulatory Ordinance (PDF) contains the regulations on licensing, permitting, security requirements, and operational requirements which are contained in GBMC Article III, Chapter 18.

Commercial Cannabis Uses Zoning

The City allows commercial cannabis uses in three zones: Industrial (I), Coastal Industrial (CI), and the Coastal Industrial Commercial (CIC) as shown on the City's Zoning Map (PDF). There are minimum setback requirements which can be found in Grover Beach Municipal Code (GBMC) Article IX Development Code, Section 4.10.045.F (PDF).

Commercial Cannabis Tax

In November 2016, voters approved Measure L-16 establishing a maximum tax rate for the City's commercial cannabis tax.  In May 2018, the City Council adopted Resolution 18-40 (PDF) which set the City's initial commercial cannabis tax rates.  On December 13, 2021 City Council adopted Resolution 21-38 (PDF) making amendments to the City's commercial cannabis tax rates.  The current cannabis tax rates are as follows:

  • 5% for retail businesses
  • 2% for distribution businesses on sales up to $10 million with sales over $10 million reduced to 1%
  • 3% for manufacturing businesses on sales up to $10 million with sales over $10 million reduced to 2%
  • 1% for testing laboratory businesses 
  • $5 per square foot annually for cultivation businesses

Commercial Cannabis Permit Application Process

All commercial cannabis uses require approval of a Use Permit (land use permit) and a Commercial Cannabis Permit (regulatory permit) in addition to a State permit in order to operate in the city. An applicant may process the Use Permit and Commercial Cannabis Permit concurrently as shown on the Cannabis Development Review Process Flowchart, listed below. There is no limit on the number of applications the City will accept for commercial cannabis manufacturing, distribution, cultivation, and testing laboratory uses.

The Use Permit Application forms and submittal requirement checklists are as follows: 

The Commercial Cannabis Permit Application forms and submittal requirement checklists are as follows:

The cost of processing a Use Permit and Commercial Cannabis Permit concurrently can vary based on the size and complexity of the proposed project. The City requires a deposit be submitted with the application which is an estimate based on the typical amount of staff time and other costs required to process an application. In the event the deposit is not sufficient to reimburse the City for processing the application, the applicant shall provide additional deposits to the City to complete the processing of the application. The current application deposit is $6,000 for a project within an existing building and $10,000 for a project that proposes constructing a new building. Further information about this deposit is included within the Development Application Form listed above. 

Commercial Cannabis Permits Approved by the City Manager

The City Manager has approved the following Commercial Cannabis Permits, click here to view them.

Fire and Life Safety Requirements

The City Council has adopted Fire and Life Safety Requirements for commercial cannabis uses which require added fire and life safety requirements beyond the City's adopted California Building Codes for volatile and non-volatile manufacturing uses, cultivation, and testing labs. This will require the applicant to hire a Certified Industrial Hygienist (CIH) to prepare a report and certify the commercial cannabis business has implemented the recommendations of the CIH. The Five Cities Fire Authority is responsible for overseeing the implementation of these requirements.

Commercial Cannabis Building Permit Process

Typically once an applicant has obtained approval of a Use Permit, the applicant can proceed with submitting a building permit application to construct a building or tenant improvements. However, the City does allow applicants to proceed with the building plan check process prior to a Use Permit approval at their own risk. Below are the forms and submittal requirement checklists for submitting a building permit application. Note that some may not be applicable to your project.

State of California Licensing

In order to operate in the City, an applicant must obtain all City permits as well as the appropriate State License. Here is the link to the Bureau of Cannabis Control and CalCannabis Cultivation Licensing websites for more information about the State licensing process.

Mobile Deliveries in the City from Retailers Not Located in the City

The City allows legally licensed mobile delivery services from retailers not based in the city subject to issuance of a Business Tax Certificate. An applicant must provide a copy of the State and local cannabis licenses to demonstrate that the mobile delivery business can legally operate within the city.

Other Agencies Which May Require a Permit to Operate a Commercial Cannabis Business

Prior to commencing operations, there may be other local agencies that require a permit for commercial cannabis uses. The following are several agencies that other applicants have been required to obtain a permit from depending on the type of use.

For Additional Information or Answers to Frequently Asked Questions

- Please see our: FAQs - Frequently Asked Questions on Commercial Cannabis in Grover Beach

- Please contact the staff member or department as indicated below:

SubjectStaff Member or DepartmentPhone and/or email
Application ProcessMegan Martin, Community Development Director
Community Development Department
(805) 473-4520
or send an email
Building Code RequirementsMegan Martin, Community Development Director
Community Development Department
(805) 473-4520
or send an email
Fire & Life SafetyFive Cities Fire Authority(805) 473-5490
or send an email
Live Scan and Background ChecksKelly Cook,  Detective
Police Department
(805) 473-4516
or send an email
Water and Sewer Connections or Street ImprovementsPublic Works Department(805) 473-4530
or send an email