Legal cannabis struggles to reach full bloom as City of Fresno misses projections

FRESNO, Calif. (KFSN) -- The Artist Tree is one of Fresno's few legal cannabis dispensaries. It is where customer Nick Rasler goes every three days to stock up.

"It keeps me cool at times," Rasler said. "I'm not so anxious. My anxiety's down low. Helps out with sleep, too."

It is customers like Rasler who have the store's manager excited for the future.

"I think we're just scratching the surface right now," The Artist Tree's area general manager Bobby Clement said. "There's so much more that we can get into as an industry."

While business is booming at the northwest Fresno shop, the budding cannabis industry is not reaching full bloom.

"For several years, we have come up short," Fresno City Councilmember Nelson Esparza said. "The city's come up short in terms of the projections of cannabis revenue that we receive."

Public documents reviewed by Action News reveal that, in 2021, Fresno predicted making more than $4 million during the next fiscal year. But it did not even bring in a penny.

In 2022, the city predicted even more revenue for the 2023 fiscal year and missed the mark again. This time, by about $4 million.

While the city first projected to make $5.4 million during the current budget year that ends in June, there is now a major setback.

On Thursday, the city council learned projections are being cut dramatically to just $2.2 million.

The hefty shortfall comes as legal cannabis stores have been slow to open.

"For a few years, there were only two open in Fresno," CEO of Cookies Fresno Kacey Auston-Tibbetts said. It took years for her to navigate strict rules.

"It was a four-year process," she said. "We had to apply with the city, and then we went through an interview process. After they went through an interview process, the city scored each applicant."

More than two years since the city green-lit 19 shops, just seven are open. Most are north of Shaw Avenue, near Highway 41, and only opened in the past few months.

The city has given licenses to 12 others throughout Fresno, but they have not opened yet.

"I believe there should be at least ten," Artist Tree customer Andre Salazar said.

One reason there are only seven? Construction.

In a statement to Action News, the city said, in part, "The companies have been slower to open for business than anticipated, and some have seen construction delays which caused their opening date to be pushed back."

"You don't have as many options out there," Clement at The Artist Tree said. "Not as many people are going and shopping. As more shops open up, I can see those numbers lining up a lot more with what the city expects."

While experts say the problem is not unique to Fresno, the city could still face shortfalls when or if the 12 other dispensaries open up.

That expansion would add more supply, but there might not be enough demand. With just six competitors, The Artist Tree is already feeling some heat.

"We got up to 92 employees when we were getting ready for 4/20 this last year," Clement said. "It's since trickled down. As other shops open up, we are going to have to manage our labor a little bit better."

Business owners and city leaders also say the black market could prevent Fresno from hitting projections.

In January, city officials raided an illegal marijuana operation at a private indoor golf club near Fresno Yosemite International Airport.

As the city cracks down and as more legal dispensaries open this year, Councilmember Esparza is optimistic.

"I think what we're going to see here this fiscal year when the actual numbers come in is that we are closer to the projections than we have been in the past," he said.

While the city will not hit its original projections this year, other legal dispensaries are set to open in the coming months, which may put the city on track for higher revenue next year.

For news updates, follow Gabe Ferris on Facebook, Twitter and Instagram.