WESTMINSTER will study the idea of allowing retail sale of cannabis products to help balance the city budget (Shutterstock).

By Shanya Rod/Orange County Tribune

Cannabis retail might be one answer to the City of Westminster’s financial troubles. While the city could get its very first cannabis retailer, there are several steps to go through before the City Council decides if this is a viable option.

Westminster City Council, at the April 13 meeting, voted 4-0 to receive and file a presentation from a potential cannabis retailer and bring back additional analysis for review. Mayor Tri Ta recused himself from the vote, as the proposed location of the shop is near his home.

Shryne Group, a cannabis company, has approached the council with an opportunity to open up Westminster’s first cannabis retailer at 14191 Beach Blvd.

Shryne Group is the largest cannabis operator in California. At the meeting, the company’s president, Tak Sato, said that its nine retail stores in Southern California average $27 million per store because of their number one brand, Stiiizy.

The company had revenue in excess of $400 million in 2021 and estimates approximately $700 million in 2022. It believes that at any location in Westminster, it can average around $35 million dollars in store sales its first year, and assuming a 6% tax rate for city cannabis taxes, would generate $2.1 million in tax revenue for the city, Sato said during the presentation.

The city council is looking for other means of revenue as Measure SS, a 1 percent sales tax that was approved by voters in 2016, is expiring at the end of the year.

Vice Mayor Carlos Manzo was in support of cannabis retail as a source of revenue.

“We have our Measure SS sunsetting and I think we owe it to our residents to look for new revenue streams. Many cities are turning to cannabis to make up for their budget shortfalls,” said Vice Mayor Manzo. “We can’t thumb our nose to any potential revenue. We can’t afford it. We can’t afford to stand idle. We must do what we can to infuse our city with much-needed revenue.”

Cannabis businesses are currently prohibited from operating in Westminster. Should the council decide to approve this retail opportunity in the future, an amendment to the municipal code would be required.

Vice Mayor Manzo wanted to see this move forward and asked to make a motion to allow the city to change its municipal code for cannabis use before being informed by Interim City Manager Christine Cordon that this presentation was only the preliminary step in the process.

“Other cities that have this type of operation, they have different ways of regulating this type of business and so we’re not even at that process,” said Cordon. “We don’t even know how we would regulate this type of business – how many would we allow and then within how many feet of each other, within how many feet of certain areas. We’re not at that point yet.”

Cordon said that crime statistics from other cities before and after opening shops can be brought back for review, as well as information about how other cities regulate cannabis businesses.

Stephanie Uy, Shryne Groups’ vice president of government relations, said during the presentation that despite being the largest cannabis retailer in California, the company has had zero instances of theft or robberies due to its highly cautious security measures. There are always two to five security guards on the store’s premises during operational hours and at least one overnight security guard; merchandise is also locked behind glass cabinets.

In response to Vice Mayor Manzo asking for the police department’s standpoint on this retail opportunity, Police Chief Darin Lenyi said that he would need to contact police departments in Shryne Group’s areas of operation to analyze the statistics and data.

Other council members did not express disapproval of allowing a cannabis retailer in the city but stressed that they need to make an informed decision.

“There’s a lot of homework that has to be done, lots of research, lots of work. Certainly, yes, we do need a legal new source of funding but we do not want to rush into anything,” said Councilmember Tai Do. “We need to figure out how to effectively regulate and make sure that everybody is happy.”

Councilmember Kimberly Ho noted that this was the council’s first retail cannabis presentation and reiterated Do’s points about needing to do more research.

“We need to do a lot of vetting, a lot of due diligence, a lot of research so that we can thoroughly understand the industry, understand the different companies and the wants and the needs of our constituents, of our community,” said Ho. “So much to look into, so we have to do the right thing. We cannot just say, ‘yes, we need money.’”