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Cannabis Dispensary High Seas Sues Costa Mesa for Permit Delays

Nov 18, 2023

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Key Takeaways

  • High Seas, a cannabis dispensary in Costa Mesa, has filed a lawsuit against the city for failing to issue its final business permit, causing substantial financial losses.
  • The company has already invested over $10 million in property improvement and alleges that the city's lack of action has led to monthly costs of over $110,000.
  • High Seas claims the city has yet to provide any legitimate reason for withholding the permit despite the dispensary passing all required inspections and obtaining necessary licenses.

Costa Mesa, CA--High Seas embroiled in a legal tussle with Costa Mesa's city government.

High Seas has incurred over $10 million in expenses, including property purchase, improvement, and staff salaries.

According to an SFGATE report, monthly expenses of over $110,000 are being incurred due to the delay in permit issuance.

Legal Action Taken

High Seas has filed a Writ of Mandate against Costa Mesa, demanding the issuance of its final cannabis business permit.

The dispensary has been ready to operate since September 26, 2023, but has been stalled due to the absence of this final permit.

“Our right to operate has been infringed upon by the city's unwarranted lack of action,” said High Seas majority owner Rachel Xin in the November 7 press release

“These delays are costing us exorbitant monthly fees as we work to retain our highly trained employees and pay mortgage rates with no income — not to mention the lost tax revenues the city isn't collecting," Xin added.

Rigorous Compliance Process

High Seas completed a two-year application process, including securing a state cannabis business license and passing all city inspections.

The renovation of a WWII-era building for the dispensary was completed, even addressing unexpected environmental challenges.

Recognition by Local Authorities

The report noted that Costa Mesa Police Chief Ron Lawrence has acknowledged the positive impact of businesses like High Seas on local neighborhoods.

Co-founder Rachel Xin expressed frustration over the city's inaction and impact on the business and community.

“All inquiries have been ignored and no response as to the reason for not issuing the [cannabis business license] given,” High Seas said in the lawsuit, per SFGate.

High Seas asserts its commitment to maintaining high standards in compliance and security within the cannabis industry.

Implications and Broader Context

The situation faced by High Seas highlights broader challenges in the cannabis industry. Cannabis dispensaries in California often face lengthy and complex permitting processes.

Local governments' requirements can impose significant financial burdens on business owners before operations begin.

Delays in permit issuance affect businesses and deprive local economies of potential tax revenues and community benefits.

What We Think

The lawsuit by High Seas against Costa Mesa underscores systemic issues in the cannabis licensing process in California.

The financial strain and operational hindrances faced by High Seas due to bureaucratic delays reflect a larger problem where local governments' inefficiencies hamper the growth of legally compliant cannabis businesses.

This case serves as a critical reminder of the need for streamlined and transparent regulatory processes that support, rather than hinder, the development of legitimate cannabis enterprises.

It also highlights the potential positive impact these businesses can have on local communities when allowed to operate​​​​.a