SAN FRANCISCO (KRON) – San Francisco supervisors are considering a pause on applications for new cannabis shops for the next three years. The ordinance passed its first reading unanimously on Tuesday afternoon.

KRON4 spoke with three men who own separate companies in the cannabis industry in San Francisco. Those in favor of the pause say this would give the shops already open a chance to survive.

“Yeah, I think there needs to be a pause,” said California Street Cannabis Co. Partner Duncan Ley. “We need to support the businesses that have been there and give them an opportunity to succeed.”

“I think the general cannabis market has experienced a downward trend,” said Ali Jamalian, who is on the San Francisco Department of Cannabis Control Advisory Committee and founded Sunset Connect. “We have a ton of applications in the pipeline that are already going to be able to serve neighborhoods.”

“I think some of those owners are trying to monopolize the market, and conservative groups in our town are doing everything they can to limit this industry from expanding,” said cannabis shop owner Chris Calloway. 

Not all marijuana business owners agree on the proposed ordinance to pause all applications for new cannabis shops. It was introduced by supervisor Ahsha Safai, citing many hurdles for the legal cannabis industry, including the constant battle against the illegal marijuana trade.

“This is a heavily regulated industry, and as I said, it was initially thought as… when the legalization was implemented, it would be less competing against the illicit market, but that is not the case,” he said. “Any operator will tell you they are consistently undermined by the illicit market, so that’s why we thought it would be better to have this pause.”

“There is a thriving illicit market. While it is seeing reductions, it is something we have to still compete with,” Ley said. 

Supervisors say there are also far too many legal competitors in the city, causing the market to be over-saturated. According to city data, there are 33 permanent cannabis shops, 15 temporary shops, and 32 medicinal cannabis shops.

KRON ON is streaming news live now

“We are the city with the most per capita in California,” Jamalian said.

“At a time in our city when we see businesses shuttering left and right I think it’s a pretty bad example to set that we are not welcoming of new businesses,” Calloway added.

One of the reasons “For Lease” signs are becoming more prevalent is retail theft and burglaries.

Supervisors worry that dispensaries have become a public safety concern, but shop owners say all businesses in the city have become a target.

“I’ve had a bike shop that had been broken into several times and just closed. Cannabis businesses are no different than those,” Calloway said.

Supervisors will make the final vote at their next meeting. If approved, the pause would be in effect until December 31, 2027. 

San Francisco created a cannabis equity program in 2018, which aims to lower barriers for licensing and waive the $5,000 permit fee. Approved applicants can also get rent-free spaces for three years.