CALIFORNIA CANNABIS RETAIL MARKET UPDATE – FEBRUARY 2026
California’s February 2026 cannabis retail landscape shows diverging paths across counties. San Diego County’s Board of Supervisors voted 3-2 on January 14 to advance updates to its cannabis program including consumption lounges and 600-foot buffers, Santa Monica opened retail applications on January 26, while Nevada County continues seeking members for its Commercial Cannabis Dispensary Evaluation Committee. Richmond considers business relief measures, and Trinity County completed tax policy input sessions. For retailers, this month brings policy advancement in major markets and continued opportunities in emerging counties.
🆕 NEW DEVELOPMENTS THIS MONTH:
- San Diego County advances cannabis program updates with 3-2 vote
- Santa Monica opens retail applications January 26
- Nevada County seeking evaluation committee members
Top Headlines This Month
- 🏛️ San Diego County Board votes 3-2 to advance cannabis program updates
- Santa Monica begins retail application process January 26
- Nevada County seeks Commercial Cannabis Dispensary Evaluation Committee members
- Richmond considers cannabis business relief measures
- Trinity County completes tax policy input sessions
🏛️ SAN DIEGO COUNTY – BOARD ADVANCES CANNABIS PROGRAM 3-2
The Setup:
The San Diego County Board of Supervisors voted 3-2 on January 14, 2026 to advance a series of updates to the proposed Socially Equitable Cannabis Program in unincorporated areas. The motion from Supervisor Monica Montgomery Steppe includes aligning with state standards, allowing all cannabis facility types with 600-foot buffers from schools and day care centers, and further consideration of consumption lounges and community equity contribution programs.
The Impact:
San Diego County moves closer to implementing cannabis retail in unincorporated areas after years of development. The 600-foot buffer requirement is less restrictive than some jurisdictions, potentially increasing suitable locations. Consumption lounges under consideration could create additional revenue opportunities for future operators. The community equity contribution program may add upfront costs but signals county commitment to social equity. This advancement represents significant progress toward opening one of California’s largest untapped retail markets.
The Opportunity:
Monitor Board agendas for final ordinance adoption expected in summer 2026. The 3-2 vote indicates continuing political sensitivity, so operators should engage with supportive supervisors and community planning groups. Start identifying sites in unincorporated commercial areas that can meet 600-foot school buffers. If consumption lounges are approved, business models integrating on-site use may differentiate from storefront-only competitors.
Strategic Angle:
Engage with county planning staff and supportive Board members before final ordinance development. The narrow vote margin means opposition remains strong, so community outreach and stakeholder support will be crucial for implementation success. Focus on unincorporated areas with favorable demographics and limited opposition.
🏛️ SANTA MONICA – RETAIL APPLICATIONS OPEN JANUARY 26
The Setup:
Santa Monica opened applications for cannabis retailers (storefront and delivery) on January 26, 2026, following City Council approval of comprehensive adult-use cannabis ordinances in September 2025. The program includes a social equity component and processes applications on a first-come, first-served basis. Adult-use sales are subject to a 4% gross receipts tax approved by voters.
The Impact:
Santa Monica’s coastal location, affluent consumer base, and limited existing dispensary count make this a high-value market opportunity. The first-come, first-served process rewards prepared applicants, while social equity provisions provide pathways for qualifying entrepreneurs. The 4% tax rate is competitive compared to other jurisdictions.
The Opportunity:
Applications are now open with no caps specified, creating immediate opportunities for qualified operators. Focus on non-residential commercial zones while avoiding 600-foot school buffers. Social equity applicants may access additional resources and support through the city’s program.
Strategic Angle:
Move quickly on applications given the first-come, first-served process. Lock down compliant sites immediately, as location control often determines application success. Social equity applicants should leverage city resources while preparing comprehensive applications.
Source:
https://www.santamonica.gov/programs/cannabis-in-santa-monica
🆕 NEVADA COUNTY – SEEKING EVALUATION COMMITTEE MEMBERS FOR FIRST DISPENSARIES
The Setup:
Nevada County is seeking seven community members to serve on the Commercial Cannabis Dispensary Evaluation Committee, as announced through multiple calls for applicants. The committee will be responsible for implementing a selection process and recommending the most qualified applicants to operate the first retail storefront commercial cannabis dispensaries in unincorporated Nevada County. One dispensary will be allowed in North San Juan (District 4) and Soda Springs (District 5).
The Impact:
This represents a ground-floor opportunity in a previously unopened market. Nevada County has never issued retail cannabis dispensary licenses in unincorporated areas before. With a population exceeding 100,000 and no existing legal retail in unincorporated zones, early entrants will face minimal local competition and strong demand from underserved communities. The merit-based evaluation process rewards prepared operators over lottery systems.
The Opportunity:
While the committee formation is still ongoing, qualified retailers should begin preparing applications and identifying suitable sites in the approved North San Juan and Soda Springs areas. Early engagement with county staff demonstrates serious intent and allows operators to address potential application gaps. Distance to nearest retail in incorporated cities creates geographic advantages for strategic siting.
Strategic Angle:
Contact the Cannabis Compliance Division at cannabiscompliance@nevadacountyca.gov to express interest and get updates on the application timeline. Early communication builds relationships before the formal process begins. Site control in the designated areas will be crucial once applications open.
Source:
https://www.nevadacountyca.gov/CivicAlerts.aspx?AID=8307
💰 TRINITY COUNTY – TAX POLICY INPUT SESSIONS COMPLETED
The Setup:
Trinity County’s Cannabis Tax Ad Hoc Committee held public input sessions on January 9 and 14, 2026 to gather stakeholder suggestions on tax policy adjustments affecting licensed cultivators and retailers. The committee was formed in response to public comments about dramatic wholesale and retail market challenges. Public suggestions included reducing or eliminating taxes on specific product categories and adjusting tiered tax levels.
The Impact:
Trinity County has collected over $850,000 in cannabis tax revenue since introduction, with $350,000 budgeted for FY 2025-2026. Any tax reduction directly affects retail margins and competitiveness with the illicit market. For retailers sourcing from Trinity cultivators, lower cultivation taxes could reduce wholesale costs and allow savings to be passed to consumers. The sessions have concluded, with recommendations forthcoming to the Board of Supervisors.
The Opportunity:
Watch for the committee’s recommendations to the Board of Supervisors in the coming months. If Trinity reduces cultivation taxes, retailers operating in or sourcing from the county could see immediate cost relief. Early communication with Trinity suppliers positions operators to benefit from any approved changes.
Strategic Angle:
Monitor Board of Supervisors agendas for the committee’s final recommendations. If tax changes are approved, negotiate pass-through pricing with Trinity-based suppliers ahead of competitors. The completed input process suggests action may come in Q2 2026.
Source:
https://www.trinitycounty.org/CivicAlerts.aspx?AID=96
🏙️ RICHMOND – CONSIDERING CANNABIS BUSINESS RELIEF MEASURES
The Setup:
Richmond’s cannabis equity program faces significant challenges, with the city forced to return $1.1 million in state grant funding in 2024 due to implementation failures. The city has struggled with its equity program implementation, lacking key elements like fee waivers and priority licensing that would support equity applicants. Current licensed operators face competitive pressure from illicit markets and high compliance costs.
The Impact:
Richmond’s cannabis market shows signs of stress, with established operators seeking relief from state tax burdens and regulatory costs. The failed equity program has left prospective equity applicants without support, while existing retailers compete with unlicensed operators. Any relief measures could provide breathing room for current operators and potentially restart equity programs.
The Opportunity:
Richmond retailers should engage with city staff about specific relief needs, focusing on measurable cost burdens like state excise taxes and compliance requirements. If the city develops relief measures, equity-certified operators may receive priority consideration. The city’s recognition of program failures suggests openness to corrective action.
Strategic Angle:
Document specific cost challenges and competitive disadvantages from illicit market activity. Frame requests around market preservation and equity program restoration. Early engagement with city council members and staff could influence the scope of any relief package.
Source:
https://richmondside.org/2026/01/13/richmond-cannabis-equity-grant-problems/
The Bottom Line
February 2026 brings significant policy advancement in California’s cannabis retail market. San Diego County’s 3-2 vote moves the state’s second-largest county closer to retail implementation, while Santa Monica’s application opening provides immediate opportunities in a premium coastal market. Nevada County continues developing its first-ever dispensary program, and Trinity County reviews tax policies affecting supply costs. Richmond’s equity program challenges highlight implementation risks across the state. Retailers should prioritize San Diego County site identification, submit Santa Monica applications quickly, and monitor Nevada County’s committee progress for ground-floor opportunities.
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