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Encinitas selects 4 applicants to operate marijuana businesses

Jennifer Gates, Encinitas concludes Friday morning’s live streamed lottery for four cannabis business retail sales licenses.
Jennifer Gates, Encinitas city planning manager, concludes Friday morning’s live streamed lottery at City Hall for four cannabis business retail sales licenses. Three locations along Coast Highway 101 and one on El Camino Real were picked and the four successful applicants now will go through the city’s business license review process.
(Barbara Henry / For The San Diego Union-Tribune)

Three Coast Highway 101 locations and one El Camino Real spot won the city’s lottery for a cannabis retail sales business license.

As the hour-and-half-long lottery came to a close Friday morning, Oct. 21, city planning manager Jennifer Gates said the next stage in the process will be a detailed city review of each of the four winning businesses’ applications. Once that process concludes, they’ll be issued the new licenses.

The four proposed locations, listed in the order that they were selected in the lottery, are:

  • 1038 S. Coast Highway, a mid-block location in downtown Encinitas. The north end of that block contains the Fish Shop, while the south end is home to the Encinitas Ale House. The cannabis business applicant is Siesta Life Encinitas LLC.
  • 1030 N. Coast Highway, a Leucadia location that’s just south of Diana Street and a bit north of Le Papagayo restaurant. The applicant is SGI Encinitas AP LLC
  • 583 S. Coast Highway, a downtown spot that’s on the east side the highway, just north of the E Street intersection and within the same block as Death by Tequila, The Roxy and the Encinitas Cafe. The applicant is Humanity Encinitas 4 Inc.
  • 211 N. El Camino Real, a site that’s just south of Cotixan restaurant and just north of a self-serve car wash. It’s between the intersections of Mountain Vista Drive and Via Molena. The applicant is Ecrencinitas4 LLC.

Encinitas began taking steps to allow retail sales of cannabis in 2020 when the city’s voters approved Measure H, which permitted four cannabis retail sales businesses, as well cultivation, manufacturing and distribution businesses, subject to certain regulations and restrictions.

Applicants for the retail business licenses had to submit their proposals to the city by Feb. 18 and the city received some 200 of them. Preference was given to applicants who had at least 12 months’ experience as a cannabis business owner, 36 months as a pharmaceutical business owner and 18 months as an Encinitas business owner. The 171 applicants that met the three criteria were put into the top tier in the lottery process, and all four business applicants were selected from that tier Friday morning, Oct. 21.

The lottery, which was held in the City Council meeting room at City Hall, was not open the public, but was live-streamed on the city’s web site. Much of the process appeared to go smoothly, but there was a hitch at the start, just before the first winning number was to be drawn.

“Because a ball fell out, I will be placing all the balls back in the machine,” Gates, who ran the lottery, told the livestream audience.

That isn’t a fast process.

Each of the 171 applications was represented by a red-and-white, marble-sized, numbered ball. Each ball was initially placed number-side-up in metal trays. For each of the four drawings, a camera would pan the trays of numbered balls to give the livestream audience confirmation that the correct balls were in the trays, then the balls were plucked from the trays and dropped one-by-one into a see-through, metal-mesh lottery spinning machine. As each ball went into the machine, Gates called out its number. The first re-loading process with the 171 balls took roughly six minutes from start to finish.

Restrictions on the successful lottery winners — they had to be at least 1,000 feet from another applicant — also meant that the balls of some unsuccessful applicants be eliminated after each drawing.

The first lottery winner — 1038 S. Coast Highway — didn’t eliminate any other applications, except one that the same company had put in for a site next door. The second winner — the 1030 N. Coast Highway site in Leucadia — eliminated several Leucadia Boulevard and Coast Highway locations. The third winner — the downtown 583 S Coast Highway site — eliminated three other Coast Highway spots, two places on Second Street and one on F Street. Because many locations had multiple retail sales applications and thus had multiple numbered balls in the lottery, each elimination process could involve the removal of many balls.

In addition to not being allowed to locate near another cannabis business, the four retail sales operations also must be at least 1,000 feet away from “sensitive uses” such as schools, day care centers and playgrounds. They can operate between the hours of 7 a.m. and 9 p.m., and they must have security cameras, alarms and 24-hour security guard, city regulations state.

For information on the lottery and the business license process, visit the city’s web site at: https://encinitasca.gov/Government/Departments/Development-Services/Planning-Division/Policy-Planning/Cannabis-Ordinance-Measure-H


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