• Team Highroad

Cannabis regs change in Palm Springs and Desert Hot Springs in February 2019


As a trusted partner to our clients, we're always working on their behalf -- and on behalf of the best interests of the cannabis industry.

Over the past few weeks members of our staff have attended city council meetings in Palm Springs and Desert Hot Springs to represent our clients and the cannabis industry. Below are the results of our attendance and advocacy.

Please reach out to us with questions or to discuss how these developments affect your business.

Palm Springs City Council update


Passed Resolution to lower cannabis manufacturing tax to 2% and suspend cannabis distribution and testing lab taxes.

  • Previously manufacturing, distribution, and testing was 10% of gross receipts

  • Right now Palm Springs has no testing labs in the area so this will likely attract more testing labs to Palm Springs. Testing labs usually bring highly skilled labor to the City.

  • This action coincides with the state bill AB 268 to reduce cannabis state taxes - BUT AB 268 HAS NOT YET PASSED; IT IS JUST A BILL AT THIS POINT, but is includes proposals to temporarily reduce cannabis excise tax to 11% and temporarily suspend cultivation tax until 2022

Motion Passed 3-1 (Mayor Moon voting against, Councilman Roberts absent)

Effective immediately: will apply to March 2019


Passed Urgency Ordinance adopting temporary moratorium on approving new cannabis permits in portions of the Desert Highland Gateway Estates and Demuth Park Neighborhoods

Motion passed unanimously (Councilman Roberts absent)

Effective immediately: applies to all new applications; applications that have been submitted and deemed complete by the City of Palm Springs before passage of the ordinance are not affected.


Desert Hot Springs City Council update


Discussions on Cannabis Storefront and Non-StoreFront Retail

This was a new ordinance creating a non-storefront retail in the industrial zone (as supposed to store-front retail in the commercial Zone). It would allow these license types to deliver out-side of city limits, but only inside of city limits if partnered with one of the existing retails already granted CUP’s. Highroad spoke in support of the license type, but against the restriction on delivery. While some council members agreed that the restrictions shouldn’t be there, the majority still feel the need to protect the interests of the existing dispensaries.

Motion passed unanimously.


Retail Facility Allowance for Select Specific Plans

This was an ordinance allowing new store-front retail in Specific Plan communities over 50 acres and which are approved for it by City Council. Currently, these specific plans were not immune from the 16 license cap, despite the fact that the City Council had allowed for a dispensary there. Highroad was the only party to speak, though Kenny Dickerson’s daughter was present, and confirmed with Council and staff that this allowance would apply to both existing and new specific plans that met these qualifications. Once that was confirmed, we spoke in support of this change.

Motion passed unanimously.


HdL contract for cannabis facility auditing

This was a contract extension for HdL to continue providing the city with auditing and compliance services for cannabis companies. Other than City Staff, there was no comment here.

Motion passed unanimously.


Highroad works diligently with clients and jurisdictions to develop sound cannabis policy for their communities and businesses. If you would like to discuss this type of work with our team, give us a call at (760) 671-5647.

We inspire people to take the high road in the cannabis industry by delivering unparalleled end-to-end consulting services that help their businesses thrive under regulation.

From strategic planning and compliance to business operations and exit strategy, we give cannabis businesses the tools and roadmaps they need to lead the industry.

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Desert Hot Springs, CA 92240

Mailing: P.O. BOX 806

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