Desert Hot Springs has more pot shops per-person than (almost) every other California city

When it comes to pot shops, the desert might just be the cannabis capital of California.

Desert Hot Springs, Cathedral City and Palm Springs rank among the cities with the most crowded retail market for marijuana in California, an analysis by The Desert Sun has found.

With the exception of Shasta Lake and a handful of smaller cities, there are more temporary retailer licenses per-person in Desert Hot Springs than any other place in the state. The ratio: 3.8 licences for every 10,000 residents.

Related:Recreational weed is booming. But California still hasn’t licensed any growers past May.

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California started granting temporary licenses to cannabis retailers on Jan. 1, 2018, and in order to get a state license, businesses have to prove they operate with the approval of their local government.

The criteria gave marijuana entrepreneurs in cities that already had a licensing process prior to Jan. 1 – including Palm Springs, Cathedral City and Desert Hot Springs – the opportunity for a head start over businesses in cities that delayed legalizing pot shops.  

To find which markets in the state have the most retail licenses per person, The Desert Sun counted the number of temporary retailer licenses for both adult-use and medicinal cannabis, then divided the total licenses for each city by its population in 2017.

The ranking, based off of data from the Bureau of Cannabis Control as of April 8, does not include cities with fewer than 10,000 people or fewer than four retailer licenses. It counts brick-and-mortar stores only, leaving out licenses for marijuana delivery services.

For now, the numbers show the desert punching above its weight when it comes to licensed pot shops. As of April 8, the ratio of retailer licenses to people in Desert Hot Springs, for example, was three times as high as the same ratio in San Francisco.

There’s a potential downside to being in a relatively crowded market, said Joy Brown Meredith, who operates Joy of Life Wellness Center dispensary in Palm Springs.

“All of us are worried about over saturation,” she said. “Now that it’s recreational, a lot of people just think that this is going to be super easy money and they want to get into the game.”

The reality is harder. Dispensaries will have to compete with one another, and Cathedral City Mayor Pro-Tem Greg Pettis predicts that some will decide to quit as a result. That's why his city decided not to limit the number of dispensary licenses in the first place, he said.

“The council took the attitude that business is business and that the market will decide how many dispensaries there will be, instead of us putting an artificial number on it,” he said.

When the dust settles, Pettis thinks Cathedral City will have one dispensary for every 10,000 residents. Right now, the city boasts 10 unique businesses with temporary retailer licenses, which would give it almost two dispensaries per 10,000 people if they all became fully licensed businesses.

The Desert Sun's ranking is not the same as a ratio of dispensaries to population. The same shop can hold a medicinal and an adult-use license simultaneously, meaning that some retailers are counted twice in the licenses-per-10,000 people list above.  

But counting by the dispensary instead of by the license favors the desert even more.

In that case, Shasta Lake, Ukiah, Patterson, West Hollywood and San Pablo would fall out of the top 15 ranking entirely, since each has fewer than four dispensaries. 

That leaves Desert Hot Springs, Cathedral City and Palm Springs filling the first, second and third slots, respectively. Desert Hot Springs comes in at number one, boasting 2.4 dispensaries per 10,000 people.

Jason Elsasser, president of the Coachella Valley Cannabis Alliance Network, sees the high number of dispensaries in the desert as indicative of a bigger pattern.

Because many cities in California don't allow retail sales, pot shops are looking to open more stores in fewer places.

“You start going down the freeway toward Los Angeles and there are very, very few legal shops,” he said.

More from this reporter:Can marijuana save this 'dying' town on the California-Arizona border?

Amy DiPierro covers real estate and business news at The Desert Sun. Reach her at amy.dipierro@desertsun.com. Follow her on Twitter @amydipierro.