Title
Consideration of a Conditional Use Permit (CUP) to allow the operation of a Cannabis Dispensary within an approximately 5,092-square-foot tenant space on the first floor of an existing two-story, 16,339-square-foot office building at 2777 Alvarado Street. APN: 77B-1201-8. Zoning District: IG. Applicant: Angilbert Sarkis, Blum San Leandro. Property Owner: Chad and Jean L. Pennebaker Trust.
Staffreport
SUMMARY AND RECOMMENDATION
The applicant, Blum San Leandro, dba Phenos, is requesting approval of a Conditional Use Permit to allow the operation of a Cannabis Dispensary within an approximately 5,092-square-foot tenant space on the first floor of an existing two-story, 16,339-square-foot office building at 2777 Alvarado Street. Section 2.12.200.B of the San Leandro Zoning Code requires approval of a Conditional Use Permit prior to establishment of a Cannabis Dispensary in the IG (Industrial General) Zoning District.
Staff believes that, with the recommended conditions of approval, the proposed Cannabis Dispensary would operate in an orderly manner on the property and would be compatible with adjacent commercial and industrial uses. Staff recommends that the Planning Commission adopt the attached Resolution (Attachment 1) approving Conditional Use Permit PLN25-0037, subject to the recommended conditions of approval.
BACKGROUND
The City’s Cannabis Dispensary regulations require a Cannabis Dispensary to obtain both 1) a Dispensary Permit under Municipal Code Chapter 4-33 (Cannabis Dispensary Permits), and 2) a Conditional Use Permit under the Zoning Code prior to the start of operation.
In 2016, Blum San Leandro obtained a Dispensary Permit and a Conditional Use Permit to operate a Cannabis Dispensary at a property located at 1911 Fairway Drive. Blum San Leandro operated a Cannabis Dispensary at the 1911 Fairway Drive location until 2024. In 2024, Blum San Leandro’s lease was terminated by the property owner, and operations ceased. Blum San Leandro’s 2016 Dispensary Permit is not tied to a specific site, so Blum may relocate subject to Planning Commission approval of a new Conditional Use Permit, which is the subject of this application.
If the Planning Commission approves the proposed Conditional Use Permit at 2777 Alvarado Street, it would become the fourth active Cannabis Dispensary location in the City. The other three locations are Harborside San Leandro at 1965 Marina Boulevard, NUG Wellness at 3089 Teagarden Street and NUG Wellness at 1911 Fairway Drive (the location previously occupied by Blum San Leandro).
RELATIONSHIP TO SURROUNDING AREA
The subject site at 2777 Alvarado Street consists of one lot occupied by an existing two-story, 16,339-square-foot office building. The proposed dispensary would occupy 5,092 square feet of the 10,911-square-foot first floor. The subject tenant space is currently vacant. The remainder of the building is occupied with a law office and an electronics design and manufacturing businesses.
Parking would primarily be accommodated on a 50-space parking lot on an adjacent parcel, under the same ownership. 43 of the 50 parking spaces on the larger parking lot would be reserved for the dispensary. A small on-site parking lot also exists and is currently occupied with outdoor storage and shipping containers. Eight parking spaces for staff would be reserved for the dispensary on the small on-site parking lot.
The subject site is located near the westerly corner of the intersection of Alvarado Street and Aladdin Avenue and the adjoining parking lot is located at the corner. The subject property is zoned IG (Industrial General), as are nearby properties in all directions. Adjacent properties are currently primarily occupied by a variety of automobile services and manufacturing, including a tire shop, automobile detailing shop, Georgia Pacific Packaging, a wine delivery warehouse, a personal training business and a fabricator. The Vicinity Map is shown on Attachment 2.
DETAILS OF THE PROPOSAL
The following is a brief summary of the operations statement submitted by the applicant. The complete project narrative appears as Exhibit A. The Project Plans are attached as Exhibits B-E.
Blum San Leandro’s operations would be consistent with the definition of a Cannabis Dispensary in Municipal Code Section 4-33-100, which includes the retail sales of cannabis or cannabis-infused products. This may include delivery of cannabis and cannabis products as part of a retail sale. Blum San Leandro would pursue a Type 10 Retailer License from the Department of Cannabis Control following approval by the Planning Commission. A Type 10 Retailer License similarly allows retail sales and delivery.
The business intends to operate from 9:00 a.m. to 8:00 p.m. seven days per week. The business expects to employ 14 to 20 full-time employees in three shifts of up to five hours in length. During each shift, at least three employees, including a manager, would be on site; the second and third shifts overlap between 4:00 p.m. and 6:00 p.m. In addition, a Security Manager would be stationed in the lobby, and two security guards would be on site during business hours.
The main customer entrance would be through a new entrance on the north side of the building facing the adjacent parking lot and Aladdin Avenue. Customer parking is proposed for the parking lot adjacent to the subject site at the corner of Alvarado Street and Aladdin Avenue with driveway access from both streets. One on-site space would be reserved for the dispensary manager, and vendor deliveries would occur on site behind a new security gate on the south side of the building, accessed from Alvarado Street. The remaining seven on-site spaces would be reserved for the building’s other tenants. Bicycle parking is proposed along the Alvarado Street frontage.
Blum San Leandro has an exclusive distribution partnership within a network of cannabis businesses. To ensure timely arrival of inventory, one or two visits by the distributor will be scheduled weekly, Monday through Friday, reducing the frequency of trips and increasing security. Arrival times and dates would be confidential and known only to upper management. Blum management would communicate directly with the distributor to coordinate logistics. Distributor vehicles would park in the vendor parking area adjacent to the vendor-only entrance and would be escorted by security staff.
Individual customers would be granted access to the retail area only after a retail employee or security staff has confirmed the individual’s age and identity. All other visitors seeking access must have a confirmed, scheduled appointment. Visitors would be accompanied by staff and/or security guards at all times.
STAFF ANALYSIS
Cannabis Dispensary Regulations
San Leandro Municipal Code Chapter 4-33 sets forth specific requirements for the operation of a Cannabis Dispensary. The proposed dispensary, as conditioned, would comply with the requirements, as discussed below.
Location
According to Municipal Code requirements, a dispensary must be located in a commercial or industrial zone, at least 1,000 feet from any public or private school, public library, youth center, park and recreation facility, religious facility, or other dispensary, and at least 500 feet from a residential zone. Staff has searched nearby land uses and determined that the proposed location meets all of the Code’s minimum separation requirements.
Operations
Sales are limited to qualified patients, primary caregivers, and adults 21 years of age and older. Cannabis may not be consumed on the premises, including the parking area; alcohol sales and on-site restaurants or lounges are prohibited; and a dispensary may not operate after 8:00 p.m. or before 9:00 a.m. unless the City approves otherwise. Employees must be fingerprinted and pass a background check, and the dispensary must provide a 24-hour community relations contact to the City, the Police Chief, and neighbors within 50 feet.
Facility
Odors may not be detectable outside the building or on adjacent properties, noise may not be audible beyond the premises, and litter must be removed from the site and within 100 feet of it twice each operating day. The applicant’s odor control plan includes carbon-filtered air exchanges and air-tight packaging, and no cultivation or manufacturing would occur on site.
Security
A dispensary must maintain high-definition video surveillance 24 hours a day covering sales, storage, entrances, and parking areas, with recordings retained for at least 60 days; a centrally monitored fire and burglar alarm; at least two state-licensed security guards during business hours, who may not carry firearms or tasers; guards who prevent smoking within 25 feet of the building and monitor for loitering; and adequate exterior lighting in parking areas.
The project narrative includes a security plan which includes the presence of a staffed lobby check-in with identification verification, a Security Manager and two security guards on site during business hours, 24-hour video surveillance with footage retained for at least 90 days, a monitored alarm system, appointment-only vendor access, and armored-courier currency transfers at irregular intervals. Security staff would monitor the parking lot to prevent loitering and on-site consumption. These measures generally meet or exceed the security standards of Municipal Code Section 4-33-500(d).
The narrative describes the guards as armed, and Section 4-33-500(d)(3) prohibits dispensary security guards from carrying firearms or tasers. Staff is recommending a condition of approval requiring that the security plan be revised to comply with Section 4-33-500(d)(3), subject to the review and approval of the Police Department.
Signage
Exterior signs must comply with the sign regulations in the Zoning Code, and seven specified interior notices must be posted before occupancy.
Operating Hours
The dispensary intends to be open to the public from 9:00 a.m. to 8:00 p.m. Monday through Sunday, which are consistent with the hours listed in Municipal Code Section 4-33-500(a)(7).
Site Improvements
Staff has analyzed the project site to ensure that the facility would be designed to have a high-quality appearance and would be compatible with the surrounding area, would not create a burden on surrounding land uses, and would limit impacts, as discussed below.
Exterior Building Design
A new storefront entrance with aluminum-framed glass and double doors, reached by an accessible ramp, would be added on the north side of the building, with a wall sign above (Exhibit C). The design is in keeping with the building’s 1960s style and would improve the appearance of the site.
Because the building exterior is worn, staff recommends a condition requiring the north elevation to be repaired and repainted so that the new entrance blends with the rest of the building.
Lighting
Currently there is no lighting around the property at night. The building interior has some security lighting, but the exterior of the building and the adjacent parking lot are unlit. The applicant proposes to install wall-mounted, downward-facing LED fixtures to the building exterior, along the west, south, and east building facades. The photometric plan shows illumination of the subject parcel along those facades. However, no fixtures are shown on the north facade at the new customer entrance, and no new lighting is proposed for the adjacent parking lot that would serve dispensary customers. Given the nature of the business, staff considers lighting of the customer entrance, the path of travel, and the customer parking lot essential. Municipal Code Section 4-33-500(d)(7) also requires adequate exterior lighting in dispensary parking areas. Staff recommends a condition requiring a revised lighting and photometric plan that adds lighting at the entrance and customer lot and meets the parking lot lighting standards in Zoning Code Section 4.08.162.
Landscaping
Existing landscaping on both lots is limited to small, mature planters of evergreen shrubs and a few trees along the Alvarado Street frontage, and much of it is in poor condition. Most of the landscaping on the north side of the building would be removed for the new entrance. Although the sites offer limited space, the two driveway closures would create new frontage for planters, and the parking lot’s perimeter planters can be widened and planted with trees. Staff recommends a condition requiring landscape plans for both lots, consistent with Zoning Code Section 4.16.108, to replace aging plantings and add trees along the street frontages.
Vehicle Parking
The subject parking lot at the corner of Alvarado Street and Aladdin Avenue would be improved and restriped to accommodate 50 vehicle spaces. Under the applicant’s lease, 43 of these spaces would be reserved for the dispensary and seven for the building’s other tenants. An additional eight spaces are located on the subject parcel’s on-site lot on the south side of the building; one would be reserved for the dispensary manager and seven for other tenants.
Under Zoning Code Section 4.08.102.B, a change in land use classification within an existing building requires additional parking only when it increases the number of required spaces by both 20 percent or more and five spaces or more, and then only for the increase. The tenant space was most recently used by the property owner as office space, which requires one space per 500 square feet. A Cannabis Dispensary, as a Commercial Services use, also requires one space per 500 square feet, or approximately 10 spaces for the 5,092-square-foot tenant space. Because the change of use would not increase the parking requirement, no additional parking is required.
The 44 spaces reserved for the dispensary are significantly more than the approximately 10 spaces the Zoning Code would require for the use. Staff anticipates that the parking lot would be sufficient to accommodate parking demand. There is minimal on-street parking in the vicinity to accommodate overflow parking needs.
Because the dispensary’s parking would be on the adjacent parcel, staff recommends conditions requiring, before building permit issuance, a parking agreement acceptable to the City Attorney that reserves that parking for the life of the use, consistent with Section 4.08.122.A.1, and a parking area plan for the adjacent lot under Section 4.08.168.
Bicycle Parking
As a Condition of Approval, the Applicant would be required to provide two short-term bicycle parking spaces and one long-term space, consistent with the design standards in Section 4.08.128.B of the Zoning Code.
Storage Containers
Thirteen 8’ x 20’ metal containers and one 8’ x 40’ container are proposed to remain in the on-site parking area. Several will be visible from Alvarado Street, although the security gates will partially screen the containers from view. Staff recommends as a condition of approval that all containers and outdoor storage be either completely removed from the site or moved to a location out of view behind the building and the on-site parking lot restriped.
GENERAL PLAN CONFORMANCE
Staff believes the proposed project meets the following general plan objectives with the application of conditions of approval identified in the attached draft Planning Commission resolution.
Policy LU-7.2 Adaptive Reuse. Encourage private reinvestment in vacant or underutilized industrial and commercial real estate to adapt such property to changing economic needs, including the creation of flex/office space and space for technology-driven businesses.
Policy ED-4.7. Employee-Serving Retail. Encourage the growth of new retail centers and retail businesses serving San Leandro’s employment districts, especially along Marina Boulevard west of I-880.
FINDINGS
In order to approve this Conditional Use Permit, the Planning Commission must make the following findings, which are found in Section 5.08.124.A of the Zoning Code.
1. That the proposed location of the use is in accord with the objectives of this Code and the purposes of the district in which the site is located;
The site is in the IG (Industrial General) District, where a Cannabis Dispensary is allowed with a Conditional Use Permit (Zoning Code Section 2.12.200.B). Municipal Code Chapter 4-33 limits dispensaries to commercial and industrial districts and requires separation from sensitive uses, and the site meets each of those requirements. The dispensary would occupy existing office space in an established multi-tenant building and would not displace industrial floor area, leaving the remainder of the building available for industrial, office, or commercial tenants.
2. That the proposed location of the use and the proposed conditions under which it would be operated or maintained will be consistent with the General Plan; will not be detrimental to the public health, safety or welfare of persons residing, or working in, or adjacent to, the neighborhood of such use; and will not be detrimental to properties or improvements in the vicinity, or to the general welfare of the City;
The proposal is consistent with various policies in the General Plan, as discussed in the staff report. The proposed dispensary is a retail commercial use within an existing building and is consistent with Policy LU-7.2 (Adaptive Reuse), which encourages private reinvestment in vacant or underutilized industrial and commercial real estate to adapt it to changing economic needs. The project is also consistent with Policy ED-4.7 (Employee-Serving Retail), which encourages retail businesses serving San Leandro’s employment districts, by establishing a retail use within the West San Leandro industrial area. The dispensary would be subject to the operating, security, and odor control standards of Municipal Code Chapter 4-33. Surrounding properties are zoned for industrial use, and the nearest residential zone is more than 500 feet away. For these reasons, the use would not be detrimental to persons residing or working in the vicinity or to nearby properties and improvements.
3. That the proposed use will comply with the provisions of this Code, including any specific condition required for the proposed use in the district in which it would be located; and
As conditioned, the dispensary would comply with the Zoning Code and with the dispensary standards of Municipal Code Chapter 4-33. Before operating, the dispensary must also obtain a Dispensary Permit under Municipal Code Chapter 4-33 and a Type 10 retailer license from the Department of Cannabis Control.
4. That the proposed use will not create adverse impacts on traffic or create demands exceeding the capacity of public services and facilities, which cannot be mitigated.
The site is in a developed area already served by water, sewer, police, and fire services, and the use would not create demands exceeding the capacity of those services.
ENVIRONMENTAL REVIEW
The proposed Cannabis Dispensary is categorically exempt from the California Environmental Quality Act (CEQA) in accordance with, each on a separate and independent basis, CEQA Guidelines Section 15301(a), Existing Facilities and CEQA Guidelines Section 15303(c), New Construction of Conversion of Small Structures. The proposal involves interior and minor exterior alterations to an existing building and the conversion of approximately 5,092 square feet of office space to a commercial use in an urbanized area where all necessary public services are available, and none of the exceptions in Section 15300.2 apply.
PUBLIC OUTREACH
This item received standard noticing for the November 5, 2026, Planning Commission hearing, including a legal advertisement in the East Bay Times newspaper, the posting of notices at City Hall and on the property, and mailing notification to business and property owners within 500 feet of the subject property. No public comments were received at the time of the filing of this report.
RECOMMENDATION
The use as proposed and with recommended conditions of approval will conform to the Zoning and Municipal Codes and to the General Plan, allowing the Planning Commission to make the required findings. Staff recommends that the Planning Commission adopt the attached Resolution approving PLN25-0037.
ATTACHMENTS
Attachment 1: Draft Resolution 2026-XX
Exhibit A: Project Narrative
Exhibit B: Site Plans
Exhibit C: Floor Plans
Exhibit D: Elevations
Exhibit E: Photometric Plan
Attachment 2: Vicinity Map
PREPARED BY: Cindy Lemaire, AICP CNU-A, Senior Planner