Atascadero council declines to advance retail cannabis zoning changes after lengthy public debate

The Atascadero City Council voted 3–2 not to direct staff to proceed with code changes that would allow retail cannabis storefronts in the city. The motion — to not move forward — passed after an extended presentation, council questions, and nearly an hour of public comment both for and against allowing retail cannabis sales.

Community Development Director Dunsmore presented background material, comparing nearby jurisdictions that have authorized retail cannabis and describing options the city could use to limit locations (overlay zones), limit the number of retailers, or require community benefit programs. Dunsmore summarized state-level issues including Proposition 64 and the state's Business and Professions Code framework for cannabis licensing. He told the council that local sales could generate tax revenue but that a large share of the market currently remains illicit and that enforcement and monitoring could create staff workload for public safety and planning.

Proponents at the podium argued the city is losing tax revenue when residents travel to neighboring cities for purchases. Megan Souza, owner of a San Luis Obispo dispensary, told council members: “8,752 is the number of my customers who have Atascadero on their ID as their resident. That’s about a third of the population of Atascadero.” Local business leaders and SlowCal Roots representatives said tightly regulated, locally owned dispensaries could provide community benefit and prefer a limited-license approach to avoid market oversaturation.

Opponents urged caution. Speakers cited concerns about youth access, mental-health harms, impaired driving detection and the community impacts of normalizing cannabis retail. Several council members also said they wanted clearer local data and broader public outreach before taking regulatory steps. Council member Newsom moved to not proceed with code changes; Council member Peake seconded. Roll call recorded Newsom and Peake voting yes; Council member Funk and the mayor voted no; the mayor pro tem voted yes. The motion passed 3–2.

Why this matters: Local zoning determines whether retail cannabis can open and where. With a 3–2 vote to not proceed, Atascadero retains its current prohibitions; the council and staff flagged options that would be required to allow retail (zoning definitions, setbacks from schools/day cares/parks, security plans, community-benefit requirements, fee structures and staffing impacts).

Council direction and next steps: Because the motion was to not move forward, the city will not bring a draft ordinance forward in the immediate term. Several council members recommended more public outreach and a professional survey or putting the question to voters; staff said either option would require additional time and — in the case of a ballot referral — budgeted election costs. Dunsmore and the police chief said that if the city later decides to permit retail storefronts, it should plan detailed security and staffing cost recovery to avoid unplanned impacts on police workloads.