Cannabis brings in millions of dollars every year to some San Luis Obispo County cities, but not Arroyo Grande. Local leaders now say the city is losing money and a policy change is needed.

The city of Arroyo Grande is hosting a series of meetings with residents over the next few weeks to discuss a potential cannabis tax measure.

The city said it’s losing money because residents are traveling to other cities in the county to buy cannabis.

By potentially legalizing sales and introducing a tax, the city would be able to keep the local dollars in Arroyo Grande.

Victoria O’Toole was in The Village of Arroyo Grande Monday morning and said she supports this.

“Why not? I mean every little town if there’s some sort of financial gain, I think it’s a win-win situation for everybody,” O’Toole said. “I don’t see how that actually is bad for anybody.”

The tax money would go toward local infrastructure to help the city meet the demands of its growing population. The city said a cannabis tax could add $500,000 annually to the general fund.

“I think the more we can do to help local infrastructure, help our families, help our parks, it’s good, it’s all good,” said Grover Beach resident Emilia Sheehan.

Grover Beach was the first city in the county to introduce a cannabis sales tax in 2016. City manager Matt Bronson said it’s the city’s third largest tax revenue source.

“We estimated on average we would generate between $1 to $1.5 million and additional cannabis tax revenue,” Bronson said. “So now here we are in 2026, almost ten years later, we’re generating $1.1 million annually in the cannabis tax revenue.”

Should voters approve a cannabis tax in Arroyo Grande, the city said it would then explore plans to permit and regulate local cannabis businesses.

Sheehan said in general, there has been a change in the local perception on cannabis.

“There still is a little bit of that stereotype, but I don’t think it’s really as big of an impact as people think,” Sheehan said. “People are going to get it right next door anyway, so why not bring it into Arroyo Grande to help the city here?”

The first meeting for locals to hear about the city’s position on cannabis is set for Wednesday, April 29 at 6 p.m. over Zoom. The second meeting will also be over Zoom on May 5 at noon.

Additional information can be found on the city’s webpage dedicated to it’s perspective on cannabis businesses.