The city of Port Hueneme will no longer accept new applications for retail cannabis dispensaries – at least for the foreseeable future.The City Council unanimously approved an ordinance Feb. 17 that will reduce the maximum number of cannabis retail dispensaries, delivery-only businesses and manufacturing and distribution businesses allowed in the city.
The new cap, which staff said is designed to aid existing operators by combating a saturated local market, will take effect March 20. Staff said the limits will also increase opportunities and retail space for other types of businesses.
“It seems counterintuitive, but it’s sort of addition by subtraction for economic development purposes,’ City Manager James Vega said during the Feb. 2 discussion on the item.
Port Hueneme was the first city in the county to embrace recreational cannabis businesses after its state legalization in 2018. Staff said they wanted to generate revenue from development contracts with businesses.
But because of increased competition with businesses in Oxnard and Ventura, high state tax rates and complicated state regulations, many local businesses have been struggling as of late, staff said.
As a result, the city went from receiving roughly $3 million in cannabis-related revenue in 2022 to roughy $1 million in 2025, according to an agenda report.
To adapt to the changing landscape, the City Council agreed in October to consider amending the municipal code to further limit the number of businesses.
Some cities choose to limit the number based on population ratios while others – like Port Hueneme – have established a fixed cap.
The city of 21,000 people currently allows 12 retail cannabis dispensaries. For comparison, Ventura, which has a population of 111,000, allows six, and Oxnard, which has a population of 200,000, allows 16.
“When Port Hueneme is compared with other cities, it becomes clear that our current cap on cannabis businesses is very high given our population and market size,” Housing Authority Member Johnny Brown said Feb. 2.
The city’s cap will remain divided into five categories of businesses, though some overlap.
The cap for retail cannabis dispensaries will decrease from 12 to five.
Though there are currently seven businesses in operation, they will be allowed to remain open, and businesses with complete applications currently under review will also not be affected. No new applications would be accepted, however, unless the number of existing businesses falls below the new cap.
Delivery-only businesses, currently capped at six, will be limited to five. There are currently four in operation.
Manufacturing businesses will be limited to five rather than the current limit of 10. There is currently only one business open.
Lastly, the cap for distribution businesses will decrease from eight to five. There is currently one open.
The limit for cannabis lounges will remain at five. There are currently two operating lounges.
The existing cannabis lounges, manufacturing business and distribution business are not standalone but rather part of the retail cannabis dispensaries.
“The dream scenario – which we know probably won’t happen or at least any time soon – but it would be that you have five businesses who are actually doing the dispensary, the lounge, the manufacturing and the distribution,” Vega said Feb. 2, referencing the retail dispensary’s ability to overlap categories.
Staff said all of the feedback from the local businesses on the proposed changes has been positive.
Makena Huey is an investigative and watchdog reporter for the Ventura County Star. Reach her at makena.huey@vcstar.com. This story was made possible by a grant from the Ventura County Community Foundation’s Fund to Support Local Journalism.