SACRAMENTO (CBS13) — Sacramento city council slapped a cap on cannabis cultivation businesses during its Tuesday night meeting.

The cap limits the number of cannabis businesses to 10 percent of the total industry in a district.

“We are a significant economic engine in Sacramento and the region,” said Tracy Schaal with the Power Inn Alliance.

The new neighbors, cannabis cultivators, are buying up zoned warehouse space. About 50 businesses have been permitted so far.

“I think there are close to 100 [cannabis business applicants] that are looking to establish a business in our district,” said Schaal.

Schaal says longtime tenants have been priced out and there is concern about an oversaturation of marijuana growers.

“Diversity is key to any economy. You have to have that diversity to be successful,” said Schaal.

The city decided to limit the number of cannabis businesses allowed in the district by a unanimous vote.

“When we passed the ordinance, we weren’t quite sure how the interest would be,” said Sacramento City Councilman Eric Guerra. “Now that we’ve seen the interest, we know how to moderate it.”

“It’s a complete change of direction,” said Cory Travis a marijuana business owner, “this is very concerning.”

Travis also represents several other business owners hoping to open up in the Power Inn area.

He says the 10% cap is arbitrary.

“It’s going to disenfranchise a lot of people who invested in good faith in the city of Sacramento,” said Travis.

He continued saying the limit creates unnecessary competition between businesses and puts being first ahead of quality applications.

“Larger development projects that are really important to the Sacramento economy are the ones getting put in the back of the line,” said Travis.

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