State says they can deliver recreational cannabis. Paso Robles says they can’t. Why?
Cannabis retailers in Paso Robles are licensed by the state to deliver recreational marijuana and have active city business licenses that seemingly label them as recreational services — but there’s a problem: The city hasn’t allowed recreational cannabis delivery in nearly two years.
The retailers were authorized to deliver recreational cannabis for a one-year period, but that temporary ordinance quietly expired in November 2023, without further communication from the city to the businesses or the Department of Cannabis Control.
Still, three services — Aquamarine, Dubs Green Garden and Kinfolk — are all licensed by the state as non-storefront retailers of adult-use and medical marijuana, the department’s license search tool showed. “Adult-use” is the state’s term for recreational cannabis.
All three licenses are current, set to expire in 2026, the database showed.
So, why is it that Paso Robles businesses have the proper paperwork required to sell recreational cannabis, but would be out of compliance with city rules if they did?
The Tribune looked into that discrepancy and the confusion among cannabis retailers in Paso Robles as part of its Reality Check series.
City temporarily allowed recreational delivery for one year
Recreational delivery in Paso Robles dates back to October 2022, when the City Council approved an ordinance that allowed its three registered medical marijuana services — Aquamarine, Dubs Green Garden and Kinfolk — to also deliver for non-medical adult use.
The policy was set to expire after one year, meaning that, barring any further action from the City Council to renew the ordinance, recreational delivery was supposed to stop in November 2023. The policy stated that when it terminated, no further notice from the city was required.
Cannabis was not discussed by the council again until Aug. 19, nearly three years after the original approval.
During last month’s meeting, officials confirmed that no action had been taken to extend recreational cannabis delivery beyond the 2023 sunset, meaning doing so would be illegal.
But that took some cannabis retailers by surprise because they were licensed to deliver recreationally by the state and, seemingly, the city.
Grace Hall, who runs Dubs Green Garden alongside her husband Ernest Hall, said she received a license for medical and recreational delivery from the state and a similarly labeled license from the city as recent as July. Photos of the couple’s licenses provided to The Tribune confirmed her statement.
The couple didn’t know about the sunset, but when they found out about it, they stopped delivering recreational cannabis of their own accord, despite being licensed to do so by the state, they told The Tribune in August.
During the Aug. 19 meeting, the council began a discussion that could fix the problem, signaling its intent to bring back the previous ordinance allowing recreational delivery. But no official action was taken to approve the ordinance at that time, meaning recreational delivery is still not allowed for retailers located within the city limits.
“As part of the City Council’s action this past meeting, direction was given to clarify that previously authorized cannabis delivery operators will be allowed to deliver adult-use cannabis on a permanent basis, pending future updates to the city’s cannabis ordinance and approval by the City Council,” city manager Chris Huot later told The Tribune in an email. “Staff is working to bring this ordinance update to the City Council soon.”
Why has state continued to license businesses for recreational delivery?
According to the state Department of Cannabis Control, it’s up to local cities to notify the agency when ordinances or licensing circumstances change.
David Hafner, media relations manager for the department, told The Tribune in an email that the agency was notified by the city of Paso Robles in January 2023 that it had passed the ordinance allowing recreational delivery.
“That communication indicated that, as of November 17, 2022, the licensee was authorized for the license type they were seeking (Adult-Use and Medicinal Retailer Non-Storefront),” Hafner wrote to The Tribune, in reference to licensee Aquamarine.
Paso Robles city manager Chris Huot confirmed that the city notified the Department of Cannabis Control of the new policy after it was approved by the City Council.
“The city provided the Department of Cannabis Control (DCC) with this information as local verification of the operational rules for each licensed operator,” Huot told The Tribune in an email. “This information was part of the overall DCC verification process that allowed for temporary adult-use delivery by the three existing, approved medical cannabis operators, subject to the included sunset provision.”
Huot added that the city included the sunset clause in its communication to the state to indicate the city’s approval of recreational licenses was temporary. To the city manager’s knowledge, there was no further communication with the state agency when the sunset actually went into effect, he said.
That’s where the problem occurred, because it appears the one-time mention of the sunset clause was not enough notification for the state to stop issuing recreational licenses to Paso Robles retailers in later years.
Instead, the Department of Cannabis Control required the city to send another notice when the ordinance expired.
“It is the responsibility of the local jurisdiction to notify DCC if a licensee is no longer locally compliant,” Hafner told The Tribune.
Huot said the city was not aware the state was continuing to issue recreational licenses, and there was no further communication between the state or city — to Huot’s knowledge — indicating that businesses were continuing to receive the authorization to deliver recreational marijuana.
Meanwhile, city permits also appeared to authorize retailers for commercial delivery.
The Dubs Green Garden city business license labels the company as a “Rec, medical marijuana delivery service,” a photo of the license that was provided to The Tribune shows.
Dubs’ most recent license with that label went into effect on July 1 and was set to expire in 2026, the photo showed.
But Huot told The Tribune that, despite the label, city-issued business licenses don’t dictate what type of cannabis local businesses are or aren’t allowed to deliver.
“It’s important to note that business licenses are not regulatory in nature and do not authorize cannabis activity,” Huot wrote. “The city does not issue cannabis licenses; those are issued by the California Department of Cannabis Control (DCC).”
The city did not directly address why the “Rec” label was included on licenses renewed after 2023.
Huot told The Tribune the city is working to clarify the rules with local businesses, and he acknowledged the city can do more to mitigate confusion among cannabis retailers.
“Obviously, there’s an opportunity here,” he said.
The Halls told The Tribune that while the confusion has negatively impacted their business, they don’t believe it was malicious on behalf of the city. They also said the city was likely preoccupied after the death of former Mayor Steve Martin in August 2023.
“The public needs to offer the city some grace in this issue and understand that it wasn’t the most important issue the city was dealing with,” the couple wrote to The Tribune. “Yes, it’s caused us hardship, but we will get through it and we look forward to what the future holds.”
Huot said city officials are working to bring the previous recreational delivery ordinance back before the City Council, as directed at the Aug. 19 meeting. The city is also working to bring forward ideas about potential storefront dispensaries within city limits.
Huot said officials will work to improve the city’s communication and ensure that any future cannabis policies are clear.
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