By April 2028, Banning could potentially qualify to have a fourth marijuana dispensary, if the city’s projections of 1,300 new residents a year, give or take, maintain course.

For now, Banning’s City Council seems content on keeping a cap on the number of retail dispensaries at one per 10,000 residents.

As of July 2022 Banning’s population was 32,523, based on results from the latest annual American Community Survey data, and there was an average of 1,200 or so housing permits pulled annually by the Atwell development, as reported by Community Development Manager Adam Rush.

Full-year tax revenues from the newest dispensary Nourish, which received its certificate of occupancy on Sept. 26, won’t be realized until 2025.

It was issued, coincidentally, in time for that day’s City Council meeting, when Rush sought direction as to whether the city wanted to raise its cap or not, and offered an update as to how the industry was faring.

Councilman Reuben Gonzales appreciated the city’s conversion from an annual retail cannabis tax collection to a quarterly one.

In 2022, between the two dispensaries Harvest Corner and Culture Cannabis Club that operated last year, they generated $1.4 million in retail taxes for Banning, according to Rush.

The city is also home to one cannabis manufacturer and two cultivation facilities.

Rush sais the owners of Harvest Corner and Culture have informed him that they prefer “the system we have in place, because it provides them assurance and low risk” for their existing business models, by having the city keep a cap of one dispensary per 10,000 residents.

“They don’t want more competition for their own business reasons, but they’ve also expressed to me that they would be interested in opening additional facilities in the city if the opportunity presented itself,” Rush reported.

Mayor Pro Tem Colleen Wallace reiterated her support that she and past councilwoman Daniela Andrade pushed for.

Citing Desert Hot Springs and its condition now as opposed to how it appeared four years ago, “It looks beautiful. They’re getting revenue” in excess of $7 million, thanks to supporting marijuana dispensaries.

Six out of 10 dispensaries have survived competition so far; four of 16 approved cannabis warehouses continue to operate in Desert Hot Springs, according to what Wallace reported.

City Councilman Rick Minjares told the council that, based on his experience as an engineering associate in Palm Springs, a city that “doesn’t have a cap on any of its cannabis-related industries: that saturation rate,” he said, shaking his head, “you don’t want it. It’s too much.”

At one point, that city had nearly 20 dispensaries around the downtown area. Five remain, according to Minjares.

He compared it to “putting a Starbucks on every corner. It just can’t sustain itself,” and was satisfied with maintaining a cap in Banning, but was open to potentially revisiting the city’s consideration of changing it when the city hits 40,000 residents.

Councilwoman Sheri Flynn felt that “Less is more,” and that raising the cap would “undercut the people who came here under that cap and set up a business plan” with a cap in mind.

According to Flynn, her understanding is that competition from cheaper illicit sales of cannabis undermines legitimate businesses, resulting in a lot of the existing cannabis retailers to struggle “because people aren’t going to pay the higher prices.”

She noted that it made sense to resort to quarterly tax collection, since an annual tax collection was not guaranteed if a business failed.

She pointed out that state fees already make it rough for cannabis retailers to make a profit.

“I would not be for raising the cap at all. I would like to see those three be very successful and be able to meet their obligations to the city,” Flynn said.

She disputed Rush’s anticipation that the city could qualify for a fourth dispensary anytime soon, and felt that Banning’s population will likely remain flat “for a long, long time, so I would like to keep the cap the way it is. I would like to see no manufacturing because of the odor — or caps on manufacturing — where the problems been in this city.”

During a public comment session, Nourish’s and Harvest Corner’s consultant Laura Leindecker lauded the council’s efforts to support the industry.

Resident Kathleen Dale, a former city planning employee for other cities, countered saying, “I don’t see the cannabis industry bringing any value to us,” and challenged the city to show proof of fiscal results that demonstrate Banning’s tax revenues related to cannabis.

For now, city staff was directed to keep its cap on the number of retail cannabis outlets allowed in the city.

 By April 2028, Banning could potentially qualify to have a fourth marijuana dispensary, if the city’s projections of 1,300 new residents a year, give or take, maintain course.  Read More