Fortuna holds cannabis study session; council asks staff for supplemental budget to fund public outreach

Fortuna city officials held a study session on cannabis policy on Sept. 2 and directed staff to return with a supplemental budget request to pay for public outreach and further analysis to inform whether the city should allow licensed cannabis businesses.

HDL consultant Mark Lovelace led the presentation, offering an overview of California’s regulated cannabis supply chain and local policy options. "There’s a little over 8,000 cannabis licenses in California currently, but only about 1,800 of those are retailers," Lovelace said, emphasizing that retailers are the limited gateway to consumer sales and that many licensees hold multiple license types.

Why it matters: Fortuna currently prohibits cannabis businesses. If the city elects to allow any cannabis uses, it would need to decide which license types to permit (such as storefront retail, delivery‑only, or cultivation), whether to limit the number of permits, how to zone and impose operating conditions, and whether to pursue a voter‑approved tax or negotiated community benefit agreements.

Policy and public‑safety considerations: Lovelace summarized state requirements that would apply to local licensees, including mandatory ID checks, 24‑hour video surveillance, Department of Justice background checks for owners, Metrc track‑and‑trace participation and state minimum setbacks of 600 feet from K–12 schools, commercial day cares and youth centers. He said cities may extend buffers, add sensitive uses, set different hours and adopt additional security and inspection standards.

Possible revenue: Using rough assumptions, Lovelace offered a range of potential tax receipts. Assuming one or two retailers capturing a combined $3.5 million to $5 million in annual sales from the area, he estimated Fortuna could receive roughly $180,000 to $320,000 annually in cannabis tax revenue at tax rates between 4% and 7%, plus about $82,000 in additional sales/transaction taxes. He cautioned these were rough estimates dependent on capture rates, number of retailers and business models.

Public comment and caveats: A county official warned of market volatility and enforcement difficulties, saying "we're outstanding $14,000,000 that is owed for excise tax," and advised caution about relying on cannabis revenue. Fortuna’s police chief, speaking as a private citizen, urged council members to weigh constituent views and consult neighboring chiefs about crime trends. A local business owner questioned the town’s ability to capture $5 million in retail sales: "5,000,000 is not gonna happen," the commenter said.

Next steps and council direction: Council members emphasized the need for broader public outreach and a facilitated workshop. Staff estimated a public engagement and study process could range from roughly $10,000 to $45,000 depending on scope; the council voted to ask staff to return with a supplemental budget request and more detailed cost estimates so the public engagement can proceed.

Ending: Staff will return to the council with a supplemental budget proposal and a recommended public‑engagement plan; no change to the current city prohibition on cannabis businesses was adopted at the meeting.