The Pacific Grove City Council is set to take a major step forward in implementing a voter-approved cannabis retail program. In Wednesday’s meeting, city officials will hold a first reading of amendments to the city’s Cannabis Licensing Ordinance and vote on new administrative procedures and licensing fees.

The action follows the passing of Measures M and N by voters in November 2022, which cleared the path for a single licensed cannabis retail storefront within city limits. Measure M approved the concept, while Measure N imposed a six percent gross receipts tax on cannabis sales.

City staff, in partnership with consultant HdL Companies, has developed an application process for potential licensees, structured as a competitive, three-phase lottery system. The lottery will be used to select one qualifying business to operate the city’s sole cannabis storefront.

“The process is designed to be fair, thorough and transparent,” said Wednesday’s agenda. “We’re taking deliberate steps to ensure compliance with community expectations and state law,” reads the agenda.

The proposed licensing process includes three phases:

• Determining applicant eligibility through a basic checklist.

• Detailed evaluation of business plans, labor practices, neighborhood compatibility, location and security.

• A public lottery for applicants who pass earlier phases.

HdL Companies, which has helped multiple California cities set up similar programs, will assist with application reviews and recommendations. The city’s community development director will oversee the final lottery inclusion decisions.

An application fee will also be introduced, but the amount will be determined at a future meeting, tentatively July 16. Officials estimate the program could generate up to $50,000 annually, though exact figures depend on business performance.

Amendments to the ordinance include reducing the application window from 60 to 30 days and requiring applicants to identify a specific business location. The ordinance also formally adopts the lottery system and adds an appeal process, though only for disputes over lottery inclusion. The final lottery outcome cannot be appealed.

Additionally, broader appeal provisions have been added for license renewals, revocations or modifications.

The storefront will be limited to one location, situated no closer than 1,000 feet from schools, youth centers and daycare facilities, as mandated by Measure M. City staff emphasized the program’s alignment with the city’s financial sustainability goals, though administrative costs are still undetermined.

If approved, the new rules would pave the way for Pacific Grove’s first legal cannabis retail outlet.

Wednesday’s meeting will be at 6 p.m. in the Council Chamber of City Hall, 300 Forest Ave. Participants can also join on the video platform Zoom at https://www.cityofpacificgrove.org/Zoom_CC