Last May, National City became the first municipality in the county — where medical marijuana dispensaries and retail sales proliferate — to approve marijuana lounges for the consumption of the drug.
This week, city officials released third-party rankings of all the businesses that applied for permits, including those for retail sales, and now, six of them, including the prospective operator of a cannabis cafe, have been approved to begin negotiations with National City regarding development agreements. After the prospective businesses have settled on a development agreement with the city, they will move to the city council for final approval.
Sessions By the Bay was the only applicant for a lounge license, and, as a candidate with a ranking above 90%, will be among the first three businesses — the others are the Shryne National City – Stiiizy and Off the Charts retail storefront applicants — to begin Phase 3. The goal of Phase 3, according to city officials, is for the city council to approve their development agreements by the end of this year.
"In the instance an applicant does not agree upon the development agreement terms, the city holds the discretion to invite the next highest ranked applicant to Phase 3," the city posted on its website Monday in the announcement.
Get San Diego local news, weather forecasts, sports and lifestyle stories to your inbox. Sign up for NBC San Diego newsletters.
The eligibility list is made up solely of "applications that scored 90% or higher." Only 2 of the 13 Phase 2 applicants will be eliminated as a result.
SESSIONS BY THE BAY
Local
Alex Ayon, a San Diego native who still lives in the city, said that he is, along with his wife, Pearl Ayon, are the prospective operators of Sessions By the Bay.
"In this business, there not very many female owners, especially minority, Latino owners," Alex said, adding that his wife's family is Mexican, and his is from Colombia and Brazil. "We're both born her. She's first generation."
Alex, who is 39, told NBC 7 that he has worked in the cannabis industry since 2009 and has owned a dispensary in San Diego in the past. He formerly worked in the mortgage sector. He attended the National City Council meeting regarding the prospective ordinance and, if all goes well, has a 10,000-square-foot lounge planned and believes Sessions By the Bay — the name refers to a social "smoking" session — could employ as many as 100 people by the time it opens. As the potential first lounge in the county, Alex said, he's been able to secure funding, saying, "there's a lot of interest in that."
The couple were "on pins and needles," till National City made the announcement Monday, Alex said.
"We were until the scores were out," Alex said. ''You just never know. We were very optimistic, we were very confident in ourselves, and feel like our strategy will, in fact, serve in the best interests of National City."
Alex told NBC 7 that he's already found a location and signed a lease, but is not yet ready to reveal that location. While the business will not sell food, he's expecting food trucks on the premises, somewhere in the adjoining parking lot. Alcohol, he said, will not be available at Sessions By the Bay.
National City has concerns, of course, that all the cannabis businesses will operate in a way to protect the health and safety of the public and that they will generate tax revenue for the city to support the general fund, according to Ale
While the couple has spent six figures on the project so far, they still have a long financial road to travel.
"In total, we're figuring it's going to be a $4 million project," Alex said. 'To get it open, that includes tenant improvements, that includes the investment into marketing, inventory, and there's a significant investment in the work force — training and the hiring. We're intending to hire at least a majority — at least 60% of our workforce — from National City, National City residents."
As part of their applications in Phase 2, National City wanted to see what value the businesses could bring to the community besides just running the business well, Alex told NBC 7.
"We intend to work with a lot of National City nonprofits and community goodwill organizations," Alex said, adding that "a percentage of our profits will be invested back into the community, specifically for youth programs, substance-abuse type programs and a few others."
NATIONAL CITY'S MARIJUANA ORDINANCE
Approval of the South Bay city's ordinance, which permits retail sales as well, came last year after six people spoke in opposition during the public comment period of the city council meeting. In the end, the council approved Ordinance No. 2021 by a vote of 4-1, over the opposition of Councilman Ron Morrison, who had proposed a motion to proceed with the other elements of the ordinance but rezone the lounges to bring them in line with other businesses.
"This is an opportunity to help bring new business in but also to think creatively," National City mayor Alejandra Sotelo-Solis said last year.
The cannabis lounges can only be opened in National City’s Tourist Commercial Zone, which is a small irregularly shaped area west of Interstate 5, south of Bay Marina Drive, east of Tidelands Avenue and in the area around the marina.
Currently, the area is mostly occupied by parking lots and industrial buildings. Per the ordinance: “ 'Consumption lounge’ means an area that is part of the premises of a state-licensed, locally permitted commercial cannabis retail business.” At this point, that doesn't appear to present a lot of options for locations.
"What it looks like is when a person walks in they have an employee that will walk them through the product, the level, the intensity, whether it is an edible or another type of product then they will have the opportunity to consume it," Sotelo-Solis said.
The city, not surprisingly, had lots to say about the specifics of the lounges, namely:
- Alcohol and tobacco consumption in the lounges is prohibited
- Patrons must be 21 or older
- Cannabis consumption cannot be seen from outside the lounge
- No BYOC – patrons have to buy their cannabis on-site
- Lounges can sell food
- A security guard must be working during the hours of operation
- Approval of permits is dependent upon an “anti-drugged driving plan”
National City’s ordinance went into force June 3, 2021, 30 days after its passage.
If a cannabis lounge were to open in National City, it would be the first in the county, though not the state. Weed bars are already open in Los Angeles and other cities as well.
At a federal level, marijuana is still a Schedule 1 controlled substance. Cannabis is legal for recreational use in 15 states and the nation’s capital, while medical marijuana is legal in three dozen states.
