Costa Mesa dispensary plans go up in smoke as use permit expires with no store built

Four years after Costa Mesa legalized retail cannabis sales, and the green rush that followed as proprietors sought the necessary approvals to do business, a use permit awarded by planning commissioners more than two years ago has expired with no store built.

And while applicants tried to reinstate their entitlements Monday in a hearing before the commission, their efforts foundered as panelists upheld the expiration status, marking the first time a coveted cannabis permit has been relinquished.

King’s Crew, the retail arm of the locally based cannabis company Gold Flora Partners, sought to occupy a 2,778-square-foot commercial building at 1687 Orange Ave. and was approved during the Sept. 12, 2022, commission hearing.

From there the applicants began the plan check process, submitting plans for a building permit in May 2023 that were tentatively approved but never received the final sign-off by the city.

One year after their submission, city staff reached out to Gold Flora asking for a final set of plans that could be stamped for approval. They never received a response, assistant planner Gabriel Villalobos told commissioners at Monday’s hearing.

“There is no record of any further action taking place after this point,” he said. “As such, the building permit was never formally issued.”

Costa Mesa municipal code stipulates a conditional use permit will expire in two years unless a building permit, certificate of occupancy or business license has been issued or a use of the property established.

A 180-day extension may be granted by the city’s development director if requested in writing 30 to 60 days before expiration, with a longer extension possible if an applicant appears in a hearing before the authorizing body, in this case the planning commission.

Gold Flora representatives did not request an extension, instead seeking Monday to overturn the expiration determination made by the city’s development director. They claimed a series of unfortunate events, including the unexpected death last September of the project manager handling the application, created insurmountable setbacks.

“This has been one of the more complex projects I’ve worked on for a number of reasons,” said Ray Dorame, executive vice president of BlackStar Contractors, which works with Gold Flora. “The structural integrity of the building itself was very difficult to deal with.”

Dorame described having to replace a back wall of the building and reestablish a water connection for the site, as well as redesigning electrical plans at the request of Southern California Edison, all of which delayed progress.

“We were trying to get these plans approved. We kept on bidding out the project because we actually lost track the CUP had expired,” he continued. “Then we received notice in late November/early December that [it] had expired and, at that time, all bets were off.”

Commissioners sympathized with the team’s many misfortunes but ultimately upheld the development director’s determination of expiration. Vice Chair Jon Zich opined on the onus placed upon project managers.

“When there are critical details, critical milestones in a schedule, typically, you move heaven and earth to meet those,” he said “Staff have had a tremendous amount of communication with you and your team regarding plans. It seems to me, they bent over backwards to try to work with you.”

Chair Jeffrey Harlan agreed.

“It seems like it would have been a simple request just to make that extension to get yourself some breathing room, especially with so much investment at risk,” he said. “I’m sympathetic to some of the other factors that you presented tonight. [But] I don’t necessarily think they change the calculus for me.”

Gold Flora Partners has until Monday to plead its case in an appeal to the Costa Mesa City Council but had not filed a request as of Thursday, a city spokesman confirmed.