Cannabis in SLO County

cannabis plantsFor Cannabis-Related Businesses

Appointments are strongly encouraged to submit a completed land use permit application. ‚ÄčTo schedule an application submittal appointment, please call Candace Wood at (805) 788-2959

Contact Us

For general information: (805) 781-5011

For land-use questions: County Planning and Building Department at (805) 781-5600 

For business licensing and taxation questions: Principal Financial Analyst Justin Cooley, (805) 781-5040 

For commercial hemp questions: Please call (805) 781-5910 for assistance

For agriculture resources, pest management, pesticide use information and weights & measures: Please call (805) 781-5910 for assistance



PLEASE NOTE: The County's cannabis regulations apply to the unincorporated areas of San Luis Obispo County. If you reside within the boundaries of an incorportaed city, please contact that city for their regulations regarding cannabis.

Complete the form below to request a pre-application meeting with Department of Planning & Building staff. Applicable fees must be paid no later than one week prior to the scheduled meeting date.



Frequently Asked Questions

Are the rules different between unincorporated areas of SLO County and the incorporated cities (Arroyo Grande, Atascadero, Grover Beach, Morro Bay, Paso Robles, Pismo Beach, and San Luis Obispo)?

Yes. Each jurisdiction has its own rules. So, while commercial storefront retailers are allowed in Grover Beach, they are not allowed in the unincorporated areas of SLO County. The County is working with the cities to develop a quick reference for the rules in each jurisdiction.

Can edibles that contain cannabis or CBD be sold in a restaurant, market or other retail food facility?

No, products that contain cannabis or CBD may not legally be sold in a restaurant, market or other retail food facility.

CBD can be derived from both hemp and cannabis. CBD derived from either source is a federally-regulated controlled substance. CBD derived from cannabis is regulated within California as a cannabis product and may only be sourced from, produced, and sold by those with approved state and local commercial cannabis licenses that allow sales of cannabis edibles. CBD derived from industrial hemp is not an approved food additive, and therefore it cannot be added to human or animal foods in California and cannot be sold in food retail environments.  

The California Department of Public Health has authority oversight in this area. Learn more from their Industrial Hemp and CBD in Food Products FAQs.

What are the current County regulations regarding cannabis?

The Board of Supervisors adopted regulations for cannabis activities in SLO County on November 27, 2017 and began accepting inland land use applications January 2, 2018.

What am I legally allowed to do with cannabis in California?

Personal recreational use: Adults 21 years or above are currently able to use recreational cannabis within a private residence and grow cannabis indoors (up to 6 plants) for personal use. Cannabis use is still prohibited in public and areas where smoking tobacco is prohibited.

Commercial cannabis activities require a license from the State Bureau of Cannabis Control, which began accepting applications in January 1, 2018. A license from both the County and the State is required before any commercial cultivation, testing, distribution, manufacturing, or sales are allowed.

Will a permit or license be required to grow, sell, or process cannabis?

Yes. Commercial cannabis businesses need a land use permit and a business license from the County before operations can begin. Businesses also need to obtain proper State licenses.

If you are looking to grow 6 plants or less for personal consumption, no license is required. However, all personal cultivation must be done indoors and the 6 plant limit includes both immature (nonflowering) and mature (flowering) plants. A maximum of 6 plants is allowed per dwelling (not per person in the dwelling).

Can I sell homegrown cannabis plants or products to others?

Not without a County and State license. Proposition 64 does not allow the sale of homegrown cannabis, whether whole plant, clippings, clones, or any product derived from any part of the plant without proper licenses.

Can I smoke or consume cannabis in public places?

No. The Adult Use of Marijuana Act of 2016 (AUMA), AKA Proposition 64, prohibits smoking or consumption of medical and recreational cannabis in public places or in places where smoking tobacco is prohibited. Places where you cannot smoke include restaurants, theaters, hallways and lobbies of apartment buildings and hotels, on the street, in schools, amusement parks, public parks and places of business usually open to the general public. Additionally, consumption or smoking of cannabis is prohibited within 1,000 feet of a school or youth area while children present, except on private residential property provided smoking is not detectable by children. Cannabis smoking is also prohibited in your car.

Where can I buy cannabis in SLO County?

Commercial cannabis retailers can obtain permits and licenses to deliver cannabis from the unincorporated areas of the County.  Storefront retailers, a store where you can walk into a store and view or purchase cannabis are not allowed in the unincorporated areas of the County. 

Note that there may be incorporated cities, such as Grover Beach, that allow storefront retailers.

How much cannabis can I buy for recreation use?

Under Proposition 64, adults 21 years and older can possess, transport, or purchase up to one (1) ounce of cannabis and up to eight (8) grams of cannabis concentrates.

Who is able to grow cannabis commercially in SLO?

Those who obtain a County land use permit, County business license, and a State cannabis license are able to grow cannabis commercially in SLO County. 

As a general rule, you may apply for a land-use permit for commercial cannabis cultivation if you meet one of the following conditions:

  1. You have an approved co-op/collective registration under Urgency Ordinance 3334
  2. You have an approved personal cultivation under Urgency Ordinance 3334, but can prove that the cultivation was in fact a co-op/collective.

Other cultivators who applied for registration may also be allowed to apply to grow cannabis commercially. If you believe this exclusion applies to your situation, contact the County Planning & Building Department. Note: During the Board of Supervisors hearings on the cannabis, the Board indicated that it may consider allowing additional applications in 2018/19. 

Do I need a state license to grow cannabis for personal use?

No. However, all personal grows must be done indoors and only six plants are allowed to be grown per residence (not per person at the residence). Your six plant count includes all immature (not flowering) and mature (flowering) plants. All plants and harvested cannabis in excess of one (1) ounce must be kept within the person’s private residence, in a locked space, that is not visible from a public place.

Where can I grow commercial cannabis?

If you own all required permits and licenses, the following land use categories (zones) allow for cannabis cultivation:

  • Agriculture – a 10 acre minimum site is required
  • Rural Lands – a 50 acre minimum site is required
  • Residential Rural – a 20 acre minimum site is required; outdoor cultivation is prohibited
  • Industrial – no minimum site area is required; outdoor cultivation is prohibited

Commercial cultivation is prohibited in all land use categories that are not listed above. Additionally, certain areas may have Planning Area Standards that do not allow cannabis cultivation, even if the property is zoned properly.

What permits and licenses do I need to commercially grow cannabis in SLO County?

In order to grow commercial cannabis in SLO County, a Land Use permit is required in addition to a County business license and State license. There are four different types of land use permits, depending on the uses of land or types of businesses that may have an impact on their community. Please refer to the Land Use Permit Process User Guide for more information.

If you are looking to grow 6 plants or less for personal consumption, no license is required.  However, all personal cultivation must be done indoors and the 6 plant limit includes both immature (nonflowering) and mature (flowering) plants.  A maximum of 6 plants is allowed per dwelling (not per person in the dwelling).

How much commercial cannabis can I grow?

Outdoor cultivation: 

  • On sites 10-25 acres in size: 2 operations per site.
  • On sites greater than 25 acres in size: 3 operations per site.

Indoor cultivation: A maximum of 22,000 square-feet per site (may be made up of multiple operations).
* An operation is limited in size to a single State cultivation license.

How far does my commercial cannabis cultivation have to be from the property line?
  • Indoor cultivation setbacks (the distance between which a building or structure and a property line) are based on the structure you are growing in and what land use category you are located in. Typically, greenhouses and other Agricultural structures in rural areas must be setback 30-100 feet from property lines. Industrial areas typically have a 0-foot setback requirement. The environmental review process (CEQA) may require additional setbacks.
  • Outdoor cultivation must be 300 feet from the property lines and 50 feet from any riparian vegetation or a watercourse.
  • Setbacks may be modified through the use permit process for unique site circumstances.
  • All cultivation must be located 100 feet from other residences and outdoor living areas (patios, pools, etc.) and 1,000 feet from schools, parks, etc.

What do I need to do after a land use permit is approved?
What is the difference between cannabis and industrial hemp?

While both cannabis and industrial hemp come from the same plant (Cannabis Sativa L), they are different in the eyes of the law due to how each is used and grown.

Current County of SLO regulations defines cannabis as any and all parts of the plant Cannabis indica, Cannabis ruderalis, or Cannabis sativa L (excluding plants which fall under the legal definition of industrial hemp) as outlined in the County Inland Ordinance and Coastal Ordinance. Cannabis is typically cultivated for tetrahydrocannabinol (THC), the substance most known for its physical and psychological effects. 

Industrial hemp commonly refers to the industrial and commercial use of the cannabis stalk, fibers and seeds, according to Section 11018.5 of the Health and Safety Code. However, because of its low THC levels (to be legally considered industrial hemp, the plants must contain less than 0.3% THC), industrial hemp is not cultivated for psychoactive use.

Industrial hemp will generally be densely planted as a field or row crop. Pruning and tending of individual industrial hemp plants is prohibited. Industrial hemp will need to be tested prior to harvest to ensure it does not exceed THC limits. To learn more about industrial hemp limitations and laboratory testing, please refer to Section 81006 of the Food and Agricultural Code.

According to the California Department of Public Health, only CBD derived from a licensed cannabis cultivator is an allowed additive in cannabis products. CBD derived from industrial hemp is not approved for use in cannabis products. In addition, CBD from any source is not an approved food additive, and cannot be added to human or animal foods in California.  

Can I commercially grow hemp in SLO County?

Not at this time. Registration to grow industrial hemp in SLO County is expected to be available by early 2019. Once registration is available, all commercial growers of industrial hemp must register with the County Department of Agriculture/Weights and Measures prior to cultivation. The process and fees for registration are under development by the California Industrial Hemp Advisory Board and will be implemented at the local level by the County Department of Agriculture. The registration fees and rules have not yet been established by the state advisory board, but are expected to be completed later this year.

What's the difference between cultivation and nurseries?

Cannabis nurseries are limited to the production of clones, immature plants, seeds, or other agricultural products used specifically for the planting, propagation, and cultivation of cannabis. Cannabis nurseries cannot grow mature plants, with the exception of certain research exemptions.

Where can I have a cannabis nursery?

Cannabis nurseries are allowed in the following land use categories (zones):
o Agriculture – no minimum site area is required
o Rural Lands – no minimum site area is required
o Residential Rural – a 5-acre minimum site is required; outdoor nurseries are prohibited
o Industrial – no minimum site area is required; outdoor nurseries are prohibited

Where can I find more information on the land use permit application process?
Where can I be informed on the latest updates regarding industrial hemp regulations?

For latest updates from the Industrial Hemp Advisory Board, please refer to the California Department of Food and Agriculture’s website where you have the option to sign-up for industrial hemp email notifications.

Where can I find more information on the adopted ordinances?
Why is there a tax on cannabis businesses?

California voters approved Proposition 64, making adult-use cannabis (non-medical or “recreational”) cannabis use legal as of January 1, 2018. In order to mitigate the potential impacts of legalized cannabis use in the unincorporated areas of San Luis Obispo County, County voters passed Measure B-18, which created a Cannabis Business Tax (CBT) in the unincorporated areas of San Luis Obispo County. The CBT began July 1, 2018 at 4% of gross receipts and will automatically increase by 2% a year beginning July 1, 2020 to a maximum of 10%. The County Board of Supervisors may act to delay or reduce the tax rate increase each July.

What part of a cannabis business is taxable?

The Cannabis Business Tax is based on gross receipts. Therefore, all revenue received by cannabis related businesses for cannabis-related sales or services are subject to the 4% CBT less any allowable exemptions or deductions.

What counts as "Gross Receipts"?

As approved by the voters, the CBT is based on gross receipts, which means all revenue, less any allowable exemptions or deductions. Unlike “net receipts” or “net income”, expenses and costs are not deducted from the taxable amount. Sales taxes and revenue already taxed in other local jurisdictions (cities and counties) may be deducted.

If you believe that any other exemptions or deductions apply, please contact the Tax Collector.

Cultivation businesses who also engage in other types of cannabis businesses (e.g. distributors, manufacturers, or delivery services) will need to report transfers of product from the cultivation business to the other business types and assign a Calculated Receipts value based on the current wholesale price. For more information, see the section on Vertically Integrated Transactions by Cultivators, below.

Where is the cannabis tax in effect?

The Cannabis Business Tax is in effect in the unincorporated areas (outside of city limits) of San Luis Obispo County. The seven incorporated cities within the County may have their own taxes and rules about cannabis businesses. If you live or do business in one of the cities, please check with the city government for more information. However, even if your business is based in one of the incorporated cities (or outside of San Luis Obispo County), deliveries made in the unincorporated areas of the County are subject to the 4% tax.

Who pays the cannabis tax?

All Cannabis Related Businesses (CRB) are subject to the tax, except for “Testing” businesses.  If you are a nursery, cultivator, distributor, manufacturer, retailer, microbusiness or other CRB you are required to pay a 4% tax on gross receipts.

How is the tax collected?

The Auditor-Controller-Treasurer-Tax Collector (ACTTC) is responsible for collecting taxes in San Luis Obispo County. The ACTTC will issue reporting forms to all licensed cannabis businesses operating within the unincorporated areas of the County. 

When is the cannabis tax due?

The cannabis business tax is collected on a monthly basis and must be remitted to the ACTTC on or before the last day of the month following the collection period. For example, cannabis business taxes collected in August must be reported and remitted to the ACTTC on or before September 30th.

What happens if cannabis tax payments are late?

If reporting and remittance is not received by the last day of the following month, the tax due is subject to a 25% penalty. If late more than one month, an additional 25% penalty is due (For a maximum penalty of 50%). Additionally, late CBT payments are subject to a 1.5% interest assessment for every month they are late.  Please do not be late -- we do not want to collect penalties and interest.

What are vertically integrated transactions?

Many CRBs engage in more than one type of business (also known as “vertical integration”). For example, a local business may be engaged in cultivation, manufacturing, distribution, and delivery. Each of these business activities requires its own County Business License and must report the 4% CBT. Under current ACTTC policies, vertically integrated transactions where the cultivation business transfers cannabis to another type of business with the same owners must report these transactions on the ACTTC form for cultivators alongside their Gross Receipt transactions with third parties. Please note, ACTTC policies are subject to change and reporting requirements for vertically integrated transactions may be established in the future for other CRBs besides cultivators as additional track and trace information becomes available to the California Cannabis Authority. 

Example: Assume a cultivator has gross receipts of $15,000 for sales of cannabis to third-party businesses. Assume this cultivator also transfers 500 pounds of Outdoor-grown cannabis, 200 pounds of Indoor-grown cannabis, and 25 pounds of “trim” cannabis to a manufacturer under the same ownership (a “vertically integrated transaction”). The Tax Collector will supply the current wholesale price from the California Cannabis Authority or other third-party source. The reporting form should be completed as follows:

Example Cannabis Tax Reporting

Note: do not include actual receipts from internal transactions in Gross Receipts (Line 1), unless they are greater than the Calculated Receipts (Lines 2), in which case those transactions should not be included as part of the Calculated Receipts (Line 2).

Please contact the Tax Collector’s office if you have questions about completing your CBT Return form.


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