LA MESA – La Mesa’s cannabis industry is nearing maturity, with its 14th and final dispensary under construction on the corner of University and 70th. After that, there is no space for any other dispensaries in the city of 60,000 under zoning rules. 

Even as more cities cash in on the lucrative cannabis industry, La Mesa leads the way in the number of dispensaries in East County, due largely to the city’s modest tax rate and permissive zoning. 

“It’s pretty low-key become one of the most cannabis-dense small cities in San Diego County,” said Jackie Bryant, a journalism professor at San Diego State and editor of Leaf Magazines. 

Measure U history

La Mesa’s Measure U, which paved the way for medical cannabis dispensaries in 2016, passed with a wider margin than neighboring cities, at 53%. 

As cities were establishing zoning guidelines for medical cannabis, California voters were pushing forward, passing  Prop 64, which legalized adult recreational use. 

At the same time, entrepreneurs looking to get into the medicinal cannabis market were forced to wait for the cities to develop their laws. 

Sean McDermott was one of the first entrepreneurs looking to seize on the medicinal cannabis market in La Mesa. 

In July 2018, McDermott opened the Grove, La Mesa’s first medical dispensary on Center Street in an industrial area. 

However, it wasn’t an instant success. Only 25 people came in on opening day. 

“It wasn’t exactly banging for a minute,” McDermott said. “Financially, it was scary.”

But business eventually picked up– and soon he got more favorable news. In November 2018, 73% of voters approved another ballot measure to bring recreational cannabis to the city.

Dispensaries flourish 

Over the next two years, despite The Grove’s slow start, new dispensaries started to pop up, and La Mesa soon turned into a hotspot for legal cannabis, altering traffic patterns and creating opportunities for other small businesses. 

“Because of the early adoption of it here, it made it a destination,” McDermott said. “La Mesa just really changed the game. I think La Mesa was kind of the Amsterdam of San Diego.” 

Meanwhile, the La Mesa Police Department saw new vehicle and pedestrian traffic on Center Street around The Grove. 

“There was a huge increase in traffic in an area that we hadn’t normally seen a lot of traffic,” said Lieutenant Travis Higgins, public information officer.  “It was just a change in what officers see day in and day out.” 

The change was not negative, just different, for the department, Higgins said. 

Center Street today is a bustling road. There’s an event venue, axe throwing, two breweries, a winery and a coffee roastery nestled between industrial fabrication shops and waste disposal centers – a major change in a formerly industrial pass-through zone.

Limited impact on crime 

Despite what critics say, Lt. Higgins says dispensaries do not make more calls for service than other businesses.

“There really hasn’t been too much of an effect on public safety and the law enforcement realm,” Higgins said. “In general, it’s been a good relationship.”

And detectives use surveillance video from outside dispensaries so often in investigations that McDermott installed two license plate readers during a remodel, one of which is pointed at the Interstate 8 on and off ramp for Spring Street. 

“You don’t see crime around our dispensaries, because there are armed guards. There’s surveillance,” said Councilmember Lauren Cazares. “They’re not drawing in danger to the communities.”

La Mesa a destination

But dispensaries are not limited to the industrial zone of Center Street.  

Dispensaries are spread throughout La Mesa, with zoning rules that require dispensaries to be 1,000 feet from each other and any sensitive locations like schools and churches. 

Some are located right against the city’s borders, making La Mesa a destination for outsiders. Customers come from the east, where many areas have yet to legalize cannabis, and the west, where La Mesa’s low tax rate makes it an economical trip.

As La Mesa became a cannabis destination for the region, McDermott felt more ostracized by his own neighbors. 

“In the beginning, I took it personal,” he said. “Nah, man, I’m a tax-paying citizen. I’m probably paying more taxes than any of the businesses here.” 

In April, Councilmember Cazares advanced a policy change so dispensaries could use the word “cannabis” in signage, which she said brought clarity for users and non-users alike, particularly for dispensaries such as Cookies that could be mistaken for a bakery. 

While the recreational cannabis market has waned slightly throughout California, Cazares says La Mesa’s modest tax rate continues to lure businesses and visitors in. 

“You still see people coming into La Mesa because you’re going to get better prices in La Mesa,” she said. 

Hyping the lowest tax in the county

On top of California’s excise tax of 15%, La Mesa’s 4% tax rate is the lowest in the county, which does impact the final cost put on consumers. 

“That local tax differential is big enough, it ends up to a lot of money on your ticket out the door,” said Bryant, the cannabis journalist, who shops at La Mesa dispensaries over ones in San Diego where she resides. 

Bryant makes the trip due to San Diego’s 10% tax rate. 

“People in the middle of San Diego who are living in North Park or downtown, or wherever else, or southeast, they have to go out to the margins of the city anyway,” Bryant said. “At that point, why wouldn’t you just cross the border?”

Bryant views the low taxes and permissive zoning as the result of a conservative area just liberal enough to make way for cannabis. 

“I really like talking about La Mesa, because I think it’s an outlier in smart municipal cannabis tax policy in California, and it’s working. What do you know?” she said. “And it’s working on a public health and safety level as well, because that illegal market that was really entrenched there has not come back.” 

$2.5 million in annual tax revenue 

Despite the low tax rates, La Mesa saw high tax revenues from cannabis sales. 

“Initial tax revenue exceeded expectations and now has plateaued as expected, as the market has saturated,” said Grecia Aguilar, spokesperson for La Mesa. 

Although revenue evened out, those taxes still generate substantial financial benefits to the city. Revenue is expected to funnel $2.5 million into the general fund annually in 2025-2026. 

“It is reliable funding that we can plan for,” said Councilmember Cazares, who mentioned revenues were used to expand staffing at the La Mesa Police Department. “It’s a real win.”