Cannabis Business Permits

The City of Stockton allows the issuance of permits to conduct, own, and operate commercial cannabis businesses within the City.

 

The permitted commercial cannabis business types include Cultivation, Manufacturing (volatile and non-volatile), Distribution, Microbusiness, Testing Laboratories, Retail Storefront (Dispensary), and Retail non-Storefront (Delivery) business types. To begin the application process for these business types, visit the Permit Center and speak with the City's Planning Team.

 

The City will be issuing two new permits on an annual basis, using a lottery system for each of these business types:

  1. Retail Storefront (Dispensary)
  2. Microbusiness

 

The 2022 Commercial Cannabis Lottery will open on October 1, 2022. 

 

All Cannabis Application Types

Each applicant is responsible for reviewing the Stockton Municipal Code (SMC) and submitting a complete application compliant with all laws and regulations.

  • Cannabis Business Definitions — Definitions for Commercial Cannabis Businesses from the Stockton Municipal Code and the State of California Business and Professions Code.

 

Application Types

Non-Storefront Retail, Cultivation, Manufacturing, Distribution, and Testing Lab

Non-Storefront Retailer (Delivery), Cultivators, Volatile and Non-Volatile Manufacturer, Distributor, and Testing Laboratory business types are not subject to the 2022 lottery system. There is no limitation on the number of land use permits allowed for these commercial cannabis business types. Interested parties may apply by visiting the City of Stockton Permit Center.

 

All applicants must meet Land-Use requirements for the property, have a Business License for the business itself, a Commission Use Permit (Administrative Use Permit for Non-Storefront Retail), an Operator Permit for the business operator, Owner, and Employee Permits, and a Business License Certificate. An applicant must obtain all City-issued permits and State licenses.

 

For more information regarding these types of permits and requirements, see Stockton Municipal Code Section 16.80.195

 

For questions about the City of Stockton’s Cannabis Regulatory Program, please contact us at CannabisReg@stocktonca.gov.

 

Retail Storefront and Microbusiness

On an annual basis, the City will allow for a total of four (4) new Commission Use Permits — two (2) per cannabis business type: Retail Storefront (Dispensary) and Microbusiness.

 

The City of Stockton’s Community Development Department will start accepting applications for the 2022 Commercial Cannabis Lottery on October 1, 2022. The application period ends on October 31, 2022.

 

Equity Program

The City of Stockton has the following components of the Equity Program: Equity Pool in the Annual Commercial Cannabis Business Lottery, the Workforce Diversity Incentive Program, and the Technical Assistance and Financial Incentives Program.

 

Equity Pool

Annual Commercial Cannabis Business Lottery

Each year, the City will select at least two (2) Equity Applicants using the annual lottery process for the following business types: Retail Storefront and Microbusiness.

 

Approved Equity lottery applications are placed into the lottery in both the Equity Pool and the General Pool, providing increased odds of being selected during the lottery drawing process. Equity applicants must meet the requirements outlined in SMC 16.80.195 (K).

 

Workforce Diversity Incentive Program

The Workforce Diversity Incentive Program is a voluntary program for Commercial Cannabis businesses. Businesses can apply for the program during the business license application process and the annual business license renewal process.

  • To qualify, at least 50 percent of the business's employees must reside within the SB 535 Disadvantaged area of the City of Stockton boundaries or reside in the Kelley Drive Neighborhood area (Neighborhood addresses can be found here). Commercial Cannabis Businesses must meet a 50% diverse workforce requirement during the time of application for the business license or at the time of renewal.
  • If the threshold is met, the commercial cannabis business will be provided a 50 percent reduction of the total amount due in taxes based on estimated gross receipts at the time of application for a new license or actual gross receipts provided at the time of renewal of business license.
  • Existing Commercial Cannabis Businesses will be able to participate in the voluntary program at the time of their annual business license renewal.

For questions relating to the Workforce Diversity Incentive Program, contact us at CannabisReg@stocktonca.gov.

 

Technical Assistance and Financial Incentives Program

Applicants who qualify as equity applicants, per requirements set forth in SMC 16.80.195, regardless of cannabis business type, are subject to the following additional resources, provided by the City, subject to availability of resources:

  • Technical Assistance (i.e., entrepreneur seminars or courses, etc.)
  • Financial Incentives (i.e., zero/low-interest rate loans or fee waiver)

 

Annual Metrics for an Equity Applicant

All equity applicants must remain over 50% owner of the cannabis business for at least five (5) years from the date of the operator's permit approval.

 

Equity Applicants may be allowed to sell their interest/business prior to the 5-year requirement if they encounter undue financial hardship. Qualifying undue financial hardship is as follows:

  1. Equity Applicant's debt exceeds the amount earned monthly to run the business evidenced by a letter explaining the financial hardship and documentation of financial burden; or
  2. Equity Applicant's debt exceeds the amount earned monthly to run the business due to circumstances beyond the Equity Applicant's control, evidenced by a letter explaining the financial hardship and documentation of the hardship. Circumstances beyond the Equity Applicant's control include injury, illness, natural disasters, death, divorce, and military deployment.

All equity applicants shall annually report City-requested metrics for tracking purposes for a minimum of five (5) years from the date of the operator's permit approval.

 

Previous Lottery Winners

 

Permitting Process

Each applicant is responsible for reviewing the Stockton Municipal Code and submitting a complete application compliant with all laws and regulations.

 

To start a cannabis business in Stockton, the City requires these permits:


Fees

The Annual Fee Schedule for FY 2021-22 has been adopted.

  

Commercial Cannabis Business Tax Rates

In accordance with SMC Section 5.99.030 (adopted March 1, 2022), operators are required to pay a semiannual Commercial Cannabis Business Tax based on the revenue (gross receipts) received. Every business operating as a cannabis business shall pay a semiannual business license tax to the City in the following amount:

  • Retail Storefront (Dispensary) — 5%

  • Non-Storefront Retail (Delivery Only) — 5%

  • Cultivation — 5%

  • Manufacturing (Volatile and Non-Volatile) — 3%

  • Distribution — 1%

  • Testing Laboratories — 0%

  • Microbusiness — 5%

Cannabis businesses must apply for semiannual business licenses. Business license tax required shall be due and payable on the first day of January and July of each year.
 

Cannabis Temporary Event Permits

Cannabis Temporary Events occur in designated venues identified in SMC 12.72.380 which includes the sale and on-site consumption of cannabis products.  Cannabis Temporary Events can be applied for using the Special Events Permit through Community Services. For information on Cannabis Temporary Events, visit the Community Services Special Events website.

 

Stockton Municipal Code Sections for Commercial Cannabis Businesses

There are several sections within the Stockton Municipal Code on Commercial Cannabis Businesses. 

  • SMC Title 5 - Chapter 5.98, 5.99, and 5.100
  • Development Code Title 16 - Chapter 16.20, Section 16.20.020; Chapter 16.64, Section 16.64.040; Chapter 16.80, Section 16.80.195; and Chapter 16.240, Section 16.240.020

The most recent changes were approved on March 1, 2022, and went into effect on March 31, 2022.

 

External Links


Bureau of Cannabis Control California

California Cannabis Industry Association

California Department of Food & Agriculture - CalCannabis Cultivation Licensing

California Department of Public Health - Manufactured Cannabis Safety Branch

California Department of Tax and Fee Administration

HUD (Housing and Urban Development)

Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA)

Minority Business Enterprise (MBE)

National Cannabis Industry Association

SB 535 Disadvantaged Communities

 

This City of Stockton web page last reviewed on --- 9/21/2022