Port Hueneme council introduces ordinance to reduce cap on commercial cannabis businesses; first reading passes unanimously

Port Hueneme's City Council voted unanimously Feb. 2 to introduce an ordinance that would lower the maximum number of commercial cannabis businesses allowed in the city.

Staff told the council the proposal would amend Article III, Chapter 12, Section 3,987.1 of the Port Hueneme Municipal Code to reduce the cap on retail dispensaries, delivery-only businesses, lounges and manufacturing/distribution licenses. Planning staff said the change is designed to let the local market "naturally rebalance over time" and would not require any currently operating business to close. "Approval of this action would not impact any existing business," staff stated during the presentation.

The item grew out of council direction from October to reassess the cap after market shifts and increased competition. Staff noted Port Hueneme once had as many as nine open dispensaries but that the local market now faces challenges including illegal sales, high state taxes and a changing competitive landscape. Staff told council that 17 development agreements had been approved in earlier years but several operators never opened and that revenues for existing operators had declined in recent years.

Councilmembers pressed staff for details about transfer rules and how lounges, manufacturing and distribution licenses relate to the proposed cap. Planning staff confirmed the municipal code allows the transfer of an existing business to a new operator subject to city vetting; such a transfer is not guaranteed and would require the incoming operator to meet city qualifications. Councilmembers also discussed a proposed numerical cap structure (council discussion referenced a five-retailer alignment for retail and associated lounge opportunities), and whether the cap would meaningfully reduce neighborhood saturation.

The public hearing for the ordinance drew no in-person commenters; one written comment was recorded. After discussion, the council moved and seconded introduction of the ordinance and took a roll-call vote: Council members Grama, Lopez, Perez, Mayor Pro Tem Hernandez and Mayor McQueen LaShawn voted "Yes." The motion to introduce the ordinance passed unanimously.

Next steps: introduction was approved for further consideration; staff and council may return the measure for additional hearings, revisions and later readings before any ordinance becomes final.