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8.A. - Page 5 of 15 The City's cannabis consultant believes that the current cannabis market demand in San Mateo County would allow four to six Redwood City retailers to develop into a sustainable business operation without having an impact on the ability of other essential businesses to find retail space or lead to clustering of cannabis retail businesses. This is equivalent to one cannabis retailer per 20,000 residents. Taking into consideration the greater population of 250,000 people in the surrounding service area, the number of retailers (including non -storefront) that potentially could be supported could be as high as 12 or 13. This analysis takes into consideration that other cities in the region might potentially allow cannabis storefronts. With a population of 727,209, the County as a whole could ultimately support up to thirty- four storefront and non -storefront retails businesses. Staff recommends allowing up to six storefront cannabis retailers, equal to the current six non -storefront retailers in Redwood City. This should allow for sustainable business operations even as other communities eventually allow storefront sales, while avoiding undue impacts on other retail businesses in the community and avoiding clustering of cannabis retail businesses. Question 2: Should cannabis retail storefront businesses be permitted to conduct delivery services as part of their cannabis business permit? The most recent data from Mariivana Business Fact Book estimates that as much as 30% of cannabis consumers may use delivery services as part of their purchasing experience due to convenience, lack of transportation, or limitations from medical condition. In addition, delivery may be an essential part of a storefront retail businesses' business model. State law does not restrict storefront retailers from providing delivery services to consumers, which may increase future deliveries in the City, should more cannabis retailers open in San Mateo County. Finally, another pandemic like COVID-19 that limits the ability of customers to patronize retail storefronts may have an impact on in-store sales and City tax revenue. Additionally, City staff has received inquiries from existing City permitted cannabis delivery businesses who wish to establish separate retail storefronts in commercial areas in Redwood City to complement their cannabis delivery businesses. If the City allows this, the permit process would need to address delivery -related impacts including loading zones, parking, and traffic. Staff recommends that the City allow cannabis retail storefront businesses to conduct deliveries. Question 3: Should cannabis storefront retailers be permitted in all zoning districts allowing general retail? The City Council may also choose to implement a number of restrictions and requirements as to how, where, and when a cannabis business may operate. The City Council may consider the following issues in making these determinations. Should the City Council decide to allow cannabis storefront retailers, the City would need to amend Article 59 of the Zoning Ordinance to allow cannabis storefront retailers in certain zoning districts. A cannabis storefront retail business is a licensed premise with a physical location from which the sale of cannabis would be conducted. This use would operate similarly to other retail uses. In general, cannabis storefront retailers prefer to be located with other retail stores in typical storefront locations, and in areas zoned for retail land uses, as opposed to locating in industrial zoned areas that can accommodate cannabis Page 5 of 11 City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore 158