SANTEE TAKES HIGH ROAD, APPROVES FOUR CANNABIS SHOPS

By Mike Allen

Image,left:  Rendering of Buzz's planned cannabis store interior

July 23, 2025 (Santee) -- Santee has concluded what Mayor John Minto called “an exhaustive process” to award four business permits for the sale of cannabis and related products to four groups, all of which have experience in retailing the highly regulated lines of liquor and gasoline.

The vote on the cannabis business licenses July 11 followed an extensive, four-phase vetting process that began in October culminating in three days of interviews with all 16 groups interviewed by the five-member council.

The stores will offer both medical and recreational cannabis (marijuana) products.

Once all the 45-minute interviews were done, which took three days, the City Council voted for their preferred vendors, culling the list in half, and then getting to the final four plus one alternate. To get there, the council used the same method of allocating community development block funds to local nonprofits, allowing them to see which groups had more votes and find a consensus.

The four permits were awarded to Buzz, Dr. Green Thumbs, Green Reserve, and Flyte, with Embark selected as the single alternate vender should one of the top four drop out or fail to complete the remaining steps in getting a required state license.

Minto told a packed council chambers that every group had some great points in their applications and presentations, but ultimately they could choose only four. “I wish we could choose everybody but we can’t,” he said.

Vice Mayor Rob McNelis, who helped develop the approval process for the cannabis permitting, said of the vote: “This is literally the most difficult thing I’ve ever done sitting up here.”

The vetting of the proposals revealed a stunning fact surrounding the sale of recreational and medicinal cannabis: it’s lucrative and growing despite the escalating costs for product, increased taxes, and competition from the cheaper black market. Each of the groups projected first year annual sales ranging from a few million dollars to one that said it expected more than $20 million.

Image, right: Rendering of exterior for Flyte's planned cannabis shop

“We are confident that our Santee projections are relatively conservative and that our revenue potential could exceed our projections, and approach our owners’ Vista location’s numbers which exceed $20 million in annual revenue,” said the Flyte application for a cannabis shop at 9805 Prospect Ave.

Flyte said in its application it expects more than 1,000 transactions daily with the average sales ticket of $77. The team also said it assembled about $2.4 million in capital for obtaining permits, site improvements and inventory purchase for the first three months.

Flyte’s property owners, Chris and Martin Salem, also own the 76 gas station, Circle K, and sandwich shop across the street, and did extensive improvements at that site a few years ago. They planned a complete renovation of the older parcel anchored by a 7-Eleven store including a new parking lot to accommodate the expected uptick in business.

The Salems listed ownership of six Arco gas stations, two 76 stations as well as convenience stores, a Mexican restaurant and a barber shop, attesting to their financial prowess to launch a new cannabis shop at a key entry point to Santee, off Cuyamaca Street.

Santee stands to reap millions in new taxes as well as getting contributions to local nonprofit groups through a request from the competing groups to make a “community benefit fee” as part of their applications. This ranged from a baseline 5 percent to 10 percent of gross sales. This was in addition to the city’s sales tax of 7.75 percent and a state excise tax of 19 percent (raised July 1 from 15 percent) that each business must pay.

Green Reserve, which gained a permit to open a shop at 10612 Prospect Ave., said it would contribute 8 percent of projected $10 million revenue or $800,000 for the city’s community benefit fee, and 2 percent or $200,000 for the funds targeting local charities.

Prior to the final vote, a few councilmembers openly asked the competing groups if they would be willing to negotiate their community benefit fees, inferring that could help improve their chances of receiving one of the top four spots.

Santee becomes the 10th city in San Diego County to approve the sale of cannabis after first adopting an ordinance to do so in 2022. When it approved its ordinance, officials said they were taking a proactive approach to the issue of selling legalized drugs within city limits. If the city continued to prohibit the sale of cannabis, it would likely be sued and lose any power to enact its standards and control over companies selling the products that are legal in the state.

As part of the vetting process groups had to divulge details about their existing cannabis operations, their financial health, and how they would operate the business in Santee. Some also provided local connections that might curry favor with the council. Ebon Johnson, CEO of Dr. Green Thumbs, noted his mother, Lizbeth Johnson, was a former Superintendent of the Santee School District. Flyte and the Salem brothers touted an endorsement from David Bejarano, the former police chief of San Diego and Chula Vista, as well as the former U.S. Marshall for Southern California. Green Reserve said Bill Berghoff, the owner of Santee’s highly successful Sportsplex USA was hired to be be the business’ community outreach liaison.

The four entities approved for the cannabis permits must still negotiate and have their individual cannabis business agreements approved by the council, then obtain all the necessary building or other permits associated with improving their sites. Finally, they have to obtain a cannabis permit from the California Department of Cannabis Control. All this could take an estimated six to 12 months, according to Sandi Sawa, Santee’s planning director.

Sawa couldn’t provide an estimate on the taxes the city would collect in the first year, but said the community benefit fee was not a tax. Santee has already collected more than $400,000 in fees (nearly $26,000 per application) to review and assess business plans.

All the selected groups for Santee’s permits asserted the businesses would not only comply with existing state and local rules, but do extensive public outreach to ensure the stores would be extremely safe to visit and not cause any problems. The shops cannot be located within 900 feet of schools, churches, and other ‘sensitive uses.’ All of the sites proposed by the applicants were in the city’s industrial or commercial zones; three of the four approved were in District 2. That district’s representative, Ronn Hall, voted against the cannabis ordinance in 2022 along with Mayor Minto.

Russ Havens, publisher of San DiegoCannabisTimes.com, a website that tracks the local industry, said he watched a good deal of the interviews and voting on the Santee permits via SanteeTV, and was surprised about how much financial detail the groups divulged and other aspects of their businesses. These are private companies and such details aren’t usually disclosed, he said.

As far as problems such as theft, burglary and loitering, that hasn’t been apparent at existing local stores, he said. “There’s been some break-ins, and grabbing product at some stores but that has occurred more in LA, not here,” Havens said.

With a plethora of cannabis shops operating in La Mesa and San Diego and a total of some 70 dispensaries operating in the county, the question is whether there is enough demand in Santee for these new shops to be viable. Havens said there is.

“I think a lot of Santee users will be happy not to have to make the trek over the (SR) 52 or down the (Interstate) 8 for their cannabis,” Havens said.