In response to a crowded market, both the cannabis industry and city officials in San Francisco are taking steps to regulate the number of new businesses opening in the next four years.
A new ordinance has been approved by the board of supervisors and signed by the mayor, imposing a moratorium on the establishment of new cannabis businesses, effective July 23. This move aims to address the oversaturation issue and bring some balance to the industry.
San Francisco Supervisor Ahsha Safai, the author of the ordinance, explained the decision to suspend and give the market time to adapt. The aim was to prevent a complete collapse of the industry and save numerous businesses from going under.
According to Safai illicit marijuana sales make up a staggering 60% of the market, with San Francisco leading the pack as the most saturated urban area in the country. However, even applicants who have made it through the process will still have the opportunity to open their new businesses once the ordinance is in place.
"This is something that we've put a lot of time, effort, and energy into, we want it to be successful but we want it to be the done the right way." said Safai.
The city will evaluate the industry to assess the impact of this decision, according to the supervisor. Additionally, a comprehensive economic study will be conducted in the third year. The supervisors retain the option to reevaluate the decision by the end of 2027.
Safai has high hopes that this will be beneficial to all of the businesses and offer some stability to the market, granting them a chance to establish themselves in the market and determine their potential for success.
Other states, including Oregon and Oklahoma, have implemented moratoriums to address the issues of oversaturated markets and illegal operations, aiming to provide stability to their respective industries.
San Francisco's proactive approach to curbing the oversaturation of cannabis businesses marks a significant step in bringing balance to the industry. With the newly approved moratorium on the establishment of new cannabis businesses, the city is taking decisive action to address the challenges posed by an overcrowded market.
This move not only aims to prevent the collapse of the industry but also provides an opportunity for existing businesses to thrive and establish themselves in the market. By evaluating the impact of this decision and conducting a comprehensive economic study, San Francisco will be better equipped to guide the industry toward long-term stability. This proactive approach mirrors similar measures implemented in other states, underlining the importance of creating a sustainable and well-regulated cannabis market nationwide.