Bakersfield and unincorporated Kern County still ban commercial cannabis. A few smaller cities allow it, state taxes changed in 2025 and federal rescheduling is only partly done.
Bakersfield cannabis dispensary zoning is simple: Municipal Code section 17.08.050 prohibits medical marijuana dispensaries and all commercial cannabis activity in every zone, under ordinances dating to 2013 and updated in 2017 and 2020. Unincorporated Kern County has banned commercial cannabis since 2017. State data show California City, McFarland and Arvin license some cannabis businesses.
Cannabis zoning in Bakersfield and Kern County at a glance
| Topic | Status |
|---|---|
| State framework | Proposition 64 (2016) and the state’s cannabis regulation law; local control under Business and Professions Code 26200 |
| City of Bakersfield | All commercial cannabis prohibited in every zone (Municipal Code 17.08.050; Ords. 4731 of 2013, 4918 of 2017, 5008 of 2020) |
| Unincorporated Kern County | Commercial cannabis banned by a 4-1 Board of Supervisors vote on Oct. 24, 2017; 2018 Measures J and K to allow it were defeated |
| Kern cities that allow some activity | California City (all types), McFarland (all but testing), Arvin (all but storefront retail), per state Department of Cannabis Control (DCC) data |
| State buffer | 600 feet from K-12 schools, day care centers and youth centers unless a local agency sets a different radius |
| State excise tax | 15% of retail gross receipts since Oct. 1, 2025 under AB 564, after a three-month rise to 19% |
| Federal status | State-licensed medical marijuana moved to Schedule III on April 28, 2026; adult-use remains Schedule I |
| What to watch | California City’s ordinance rewrite (expected by 2027), a DEA decision on broader rescheduling, IRS guidance on Section 280E |
Key takeaways
- Bakersfield Municipal Code section 17.08.050 prohibits medical marijuana dispensaries and all commercial cannabis activity in every zone, under ordinances adopted in 2013, 2017 and 2020.
- Kern County supervisors voted 4-1 on Oct. 24, 2017 to ban commercial cannabis in unincorporated areas. Voters defeated two 2018 measures (J and K) that would have allowed it.
- California’s cannabis excise tax returned to 15% on Oct. 1, 2025 under AB 564, signed Sept. 22, 2025, after rising to 19% on July 1, 2025.
- On April 28, 2026, the DEA moved marijuana covered by a state medical license to Schedule III. Adult-use marijuana stayed in Schedule I and remains subject to Internal Revenue Code Section 280E.
- Since Jan. 1, 2024, Business and Professions Code 26322 bars local governments, including Bakersfield, from prohibiting licensed delivery of medicinal cannabis to patients.
Can you open a cannabis dispensary in Bakersfield?
No. Bakersfield’s zoning code lists medical marijuana dispensaries and commercial cannabis activity as uses “specifically prohibited within any zone district,” according to Municipal Code section 17.08.050. The city’s definition of commercial cannabis activity covers cultivation, manufacture, distribution, processing, storage, lab testing, packaging, labeling, transportation, delivery and sale.
The ban has been in place for years. The section’s history lists Ordinance 4731 (2013), Ordinance 4918 (2017) and Ordinance 5008 (2020). In September 2017 the City Council voted 6-1 on first reading to extend the ban to recreational shops, cultivation, manufacturing and distribution after Proposition 64, 23ABC reported.
Voters weighed in too. In November 2018, Bakersfield’s Measure O would have allowed medical dispensaries, cultivation, manufacturing, distribution and delivery, with dispensaries at least 1,000 feet from schools and a 7.5% excise tax, Bakersfield Now reported. The same station reported that Bakersfield and Kern County voters said no while Arvin voters approved a cannabis measure. The city code still bans all of those uses.
Is there any exception for medicinal delivery?
Yes. Since Jan. 1, 2024, Business and Professions Code 26322 has barred local governments from adopting or enforcing rules that prohibit licensed retail delivery of medicinal cannabis to patients and caregivers. Cities can still regulate zoning, security, licensing and taxes. Bakersfield can still keep storefronts and other cannabis premises out of the city.
How does local control over cannabis work under Proposition 64?
Cities and counties decide whether cannabis businesses can operate inside their borders. California voters approved Proposition 64 in November 2016, legalizing adult-use cannabis but leaving the siting decision to local governments.
Business and Professions Code 26200 preserves local power to regulate licensed businesses through zoning and business licenses, or to prohibit one or more business types outright. County rules apply only in unincorporated areas, and each city decides for itself, the Department of Cannabis Control explains. A business needs both a state license and local approval, so a state license alone does not make a site legal.
State law also sets a default buffer. Under Business and Professions Code 26054(b), a licensed premises may not sit within 600 feet of a K-12 school, day care center or youth center that exists when the license is issued, unless the state or the local jurisdiction sets a different radius.
Where is commercial cannabis allowed in Kern County?
Three Kern cities license at least some cannabis activity: California City, McFarland and Arvin. The Department of Cannabis Control’s March 2026 dataset lists every other jurisdiction in the county, including Bakersfield and unincorporated Kern County, as prohibiting all commercial cannabis.
| Jurisdiction | Storefront retail | Delivery | Distribution | Manufacturing | Cultivation | Testing |
|---|---|---|---|---|---|---|
| California City | Allowed | Allowed | Allowed | Allowed | Allowed | Allowed |
| McFarland | Allowed | Allowed | Allowed | Allowed | Allowed | Prohibited |
| Arvin | Prohibited | Allowed | Allowed | Allowed | Allowed | Allowed |
| Bakersfield | Prohibited | Prohibited | Prohibited | Prohibited | Prohibited | Prohibited |
| Unincorporated Kern County | Prohibited | Prohibited | Prohibited | Prohibited | Prohibited | Prohibited |
| Delano, Maricopa, Ridgecrest, Shafter, Taft, Tehachapi, Wasco | Prohibited | Prohibited | Prohibited | Prohibited | Prohibited | Prohibited |
Source: DCC local ordinances dataset, March 2026.
The table is not a permit. Most Kern entries in the dataset were last updated in January 2022 (McFarland’s in February 2026), and cities can cap licenses, restrict zones or pause approvals. A city’s planning department decides whether a specific parcel qualifies.
California City: the county’s cannabis hub, now tightening rules
California City allows every license type, and large indoor cultivation campuses have been proposed on its industrial land. Our coverage of one such proposal, the KK Park cannabis campus, follows it through review. In May 2026 the council voted unanimously to stop approving new cannabis permits for 45 days. Existing businesses could stay open but not expand, KUZZ reported. KGET later reported that the council voted to let the temporary ban expire.
On Sept. 8, 2026, the council gave consensus to amendments that include closure and deconstruction bonds for new businesses, bans on temporary wells and on generators for permanent power, a limit on owning more than one dispensary and engineer-certified odor control plans, according to the Mojave Desert News. The paper reported that a full rewrite is expected by 2027.
Unincorporated Kern County: banned since 2017
The county banned storefront medical dispensaries in 2011, Bakersfield Now reported at the time. On Oct. 24, 2017, supervisors voted 4-1 to prohibit all commercial cannabis activity, including cultivation, and gave the 28 existing legal dispensaries up to a year to close. In 2018, county voters defeated Measures J and K, which would have allowed regulated cannabis businesses, Ballotpedia records. That 2018 Measure K is unrelated to the 2022 Measure K sales tax, which our Kern County sales tax guide covers.
What changed in California cannabis taxes in 2022 to 2025?
California’s cannabis excise tax is 15% of retail gross receipts. A 2022 budget law, AB 195, restructured cannabis taxes. The state cultivation tax ended on July 1, 2022, and starting Jan. 1, 2023, retailers collect the 15% excise tax from buyers based on gross receipts, according to the California Department of Tax and Fee Administration (CDTFA).
The same law let the rate adjust, and it rose to 19% on July 1, 2025. Gov. Gavin Newsom signed AB 564 by Assemblymember Matt Haney on Sept. 22, 2025, returning the rate to 15% on Oct. 1, 2025, per the CDTFA notice. The notice flags another possible adjustment in fiscal year 2028-29.
Industry groups backed the cut. The California Cannabis Operators Association argued that social programs cannot be funded by revenue from a market that shrinks under high taxes, Cannabis Business Times reported. The trade-off is lower excise revenue for the programs the tax funds.
| Date | Change |
|---|---|
| July 1, 2022 | State cultivation tax ends (AB 195) |
| Jan. 1, 2023 | Retailers collect 15% excise tax on gross receipts |
| July 1, 2025 | Excise rate rises to 19% |
| Oct. 1, 2025 | Rate returns to 15% under AB 564 |
| Fiscal year 2028-29 | Next possible rate adjustment, per CDTFA |
What does 2026 federal rescheduling mean for cannabis tenants?
Only state-licensed medical marijuana has moved so far. On April 28, 2026, the DEA issued a final order moving two categories to Schedule III: marijuana in FDA-approved drug products and “marijuana subject to a state medical marijuana license,” Gibson Dunn reported. Unlicensed crops, bulk marijuana and other extracts stayed in Schedule I, so adult-use marijuana remains federally prohibited.
A hearing on broader rescheduling ran from June 29 to July 15, 2026. As of September 2026, post-hearing briefs were in and the administrative law judge’s recommended decision was still pending, according to Morgan Lewis. The DEA administrator issues the final decision after that.
The tax effect is significant but narrow. Internal Revenue Code Section 280E denies deductions other than cost of goods sold to businesses trafficking in Schedule I or II substances. Accounting firm Pease Bell wrote in August 2026 that rescheduling lifts that bar for state-licensed medical activity, while adult-use sales stay subject to it and mixed operators must allocate expenses carefully. It noted that the IRS had issued no guidance.
What should landlords know before leasing to a cannabis operator?
Landlords weigh zoning first, then federal risk, lender consent and insurance. In Kern, zoning means the specific city must allow the license type at the parcel, buffers must be met and the lease should be contingent on the tenant obtaining both the local permit and the state license. Our industrial zoning guide explains how to read the zoning side.
Federal risk has not gone away. 21 U.S.C. 856(a)(2) makes it unlawful for an owner or lessee to knowingly rent or lease a place for unlawfully manufacturing, storing or distributing a controlled substance, and adult-use cannabis is still Schedule I. Many lenders prohibit cannabis tenants in loan covenants, and many insurers exclude them, so either can derail a deal.
- Lender consent: Mortgage and SBA loan terms often bar cannabis uses. A cannabis lease can trigger a default.
- Insurance: Many property policies exclude a cannabis use, so landlords typically require the tenant to carry specialty coverage.
- Credit: Section 280E can leave adult-use operators with high effective tax rates. Underwrite tenant financials and use larger deposits or guaranties; our guide to personal guarantees and letters of credit covers the options.
- Utilities and odor: Indoor cultivation draws heavy power and water. California City is moving to ban generators for permanent power and temporary wells.
- Exit: Require restoration and removal of cultivation improvements, mirroring California City’s proposed closure bonds.
Location affects pricing. A national brokerage’s Q2 2026 Bakersfield industrial report put average asking rent in its Outlying Kern County submarket at $0.61 per square foot per month NNN (tenant pays taxes, insurance and maintenance), against $1.41 in North Bakersfield. Cannabis-eligible industrial land sits mostly in those outlying markets.
What should owners and operators watch next?
- California City’s ordinance rewrite, expected by 2027, and how it treats applications already in process.
- A DEA final decision on rescheduling all marijuana, which would extend 280E relief to adult-use operators.
- IRS guidance on when 280E relief applies to state-licensed medical businesses.
- Any Kern city that changes its rules. The DCC dataset lags local action.
- The excise tax review set for fiscal year 2028-29.
| Checklist for a cannabis lease or land deal in Kern County |
|---|
| Confirm the parcel’s jurisdiction. Bakersfield and unincorporated Kern ban all commercial cannabis. |
| Get written confirmation from the city that the license type is allowed in that zone and meets buffers. |
| Make the lease or purchase contingent on local permits and a state license. |
| Obtain lender consent and confirm insurance coverage in writing. |
| Underwrite tenant credit with 280E in mind and require security. |
| Address power, water, odor control and restoration at lease end. |
| Have counsel review federal-law exposure before signing. |
Our due diligence checklist for industrial buyers covers the wider purchase review.
How does 280E affect an adult-use retailer’s ability to pay rent?
It can cut after-tax cash flow sharply, so landlords should underwrite cash flow and not just sales. The figures below are hypothetical.
Assume an adult-use retailer with $2,000,000 in annual sales, $1,000,000 in cost of goods sold and $700,000 in other operating expenses, including $120,000 of rent. Without 280E, taxable income would be about $300,000 ($2,000,000 minus $1,000,000 minus $700,000). Under 280E, the $700,000 of operating expenses, rent included, is not deductible, so taxable income is about $1,000,000.
At a 21% federal corporate rate, federal tax would be about $210,000 under 280E versus $63,000 without it. If the same store held a state medical license, the April 2026 order could change the result for that activity.
Frequently asked questions
Are cannabis dispensaries legal in Bakersfield?
No. Bakersfield Municipal Code section 17.08.050 bans medical marijuana dispensaries and every other commercial cannabis use in all zones. That covers cultivation, manufacturing, distribution, testing, delivery and sale, and the rules trace back to 2013, 2017 and 2020 ordinances. One carve-out applies: since Jan. 1, 2024, state law stops the city from prohibiting licensed delivery of medicinal cannabis to patients.
Which Kern County cities allow cannabis businesses?
The Department of Cannabis Control’s March 2026 dataset shows three. California City allows all license types, McFarland allows everything except testing and Arvin allows everything except storefront retail. Bakersfield, the unincorporated county and the other Kern cities prohibit commercial cannabis. Local rules can change faster than the state data.
Is cannabis legal in unincorporated Kern County?
Personal adult use is legal statewide, but commercial cannabis businesses are not allowed in unincorporated Kern County. Supervisors voted 4-1 on Oct. 24, 2017 to ban them, cultivation included. Voters rejected Measures J and K in November 2018, which would have permitted regulated businesses.
What is California’s cannabis excise tax rate in 2026?
It is 15% of retail gross receipts, collected from buyers by retailers. The rate climbed to 19% on July 1, 2025 and dropped back to 15% on Oct. 1, 2025 under AB 564. The CDTFA says it could adjust again in fiscal year 2028-29. Local cannabis taxes and sales tax apply on top.
Was marijuana rescheduled to Schedule III in 2026?
Partly. The DEA’s April 28, 2026 order covers marijuana in FDA-approved drug products and marijuana grown under a state medical license. Adult-use and unlicensed marijuana remain in Schedule I. The broader hearing ended July 15, 2026, and as of fall 2026 the judge’s recommendation and the final decision were still ahead.
Can I lease my Kern County warehouse to a cannabis company?
Only if the city where the building sits allows that license type at that location and the tenant gets both local and state licenses. Your lender and insurer also need to agree. Federal law still treats adult-use cannabis as illegal, which creates legal risk for owners, so make the lease contingent on permits and licenses.
How far must a cannabis business be from a school in California?
The state default is 600 feet. A licensed premises cannot sit within that radius of a K-12 school, day care center or youth center that exists when the license is issued, unless the state or the city sets a different distance. Many cities use larger buffers in their own ordinances.
If you own industrial land in a Kern city that allows cannabis, or are weighing a cannabis tenant, we can help you compare zoning, lease terms and market rents before you commit. Call Kern CRE at 661-885-6949 or contact us. Get Kern County CRE news monthly: subscribe to the Kern CRE report.
Sources
- Where cannabis businesses are allowed (data updated February 2026), California Department of Cannabis Control.
- Cannabis local ordinances dataset (CSV), California Department of Cannabis Control, March 18, 2026.
- Section 17.08.050, Prohibited uses, City of Bakersfield Municipal Code.
- Section 17.04.154, Commercial cannabis activity, City of Bakersfield Municipal Code.
- City against commercial cannabis activity, 23ABC News (KERO), Sept. 22, 2017.
- Kern County supervisors ban all commercial cannabis activity, Bakersfield Now (KBAK/KBFX), Oct. 24, 2017.
- Kern Co. leaders vote down pot shops, large grows, Bakersfield Now (KBAK/KBFX), Aug. 1, 2011.
- Marijuana measures to look for on the November ballot, Bakersfield Now (KBAK/KBFX), Sept. 25, 2018.
- Arvin voters OK cannabis measure, but Bakersfield and Kern voters say ‘no’, Bakersfield Now (KBAK/KBFX), Nov. 2018.
- Kern County, California ballot measures, Ballotpedia.
- Business and Professions Code section 26200, California Public Law.
- Business and Professions Code section 26054, California Public Law.
- Business and Professions Code section 26322, California Public Law.
- Cal City Officials Approve Temporary Pot Shop Ban, KUZZ News, May 28, 2026.
- Cal City Council votes to let temporary ban on new cannabis businesses expire, KGET, 2026.
- Council gives Consensus on Review of Cannabis Ordinance Revision, Mojave Desert News, Sept. 17, 2026.
- Tax Guide for Cannabis Businesses, California Department of Tax and Fee Administration.
- Special Notice L-992: Cannabis excise tax rate decrease effective October 1, 2025, California Department of Tax and Fee Administration, September 2025.
- California Governor Signs Bill to Halt Cannabis Excise Tax Hike, Cannabis Business Times, September 2025.
- AB 195 (2021-2022), Cannabis, California Legislative Information, 2022.
- AB 564 bill text, LegiScan, 2025.
- DEA Downschedules State Medical Marijuana to Schedule III; Expedited Hearing Set to Consider Broader Rescheduling, Gibson Dunn, April 29, 2026.
- High Time for a Change? Post-DEA Hearing, Broader Marijuana Rescheduling Questions Remain, Morgan Lewis, September 2026.
- Cannabis Rescheduling and the Future of 280E, Pease Bell CPAs, Aug. 25, 2026.
- 21 U.S. Code 856, Maintaining drug-involved premises, Legal Information Institute, Cornell Law School.
- Bakersfield Industrial MarketBeat Q2 2026, Cushman & Wakefield, Q2 2026.
About this article
Kern CRE prepared this article with help from AI research and writing tools. An editor reviewed the draft, checked its facts against the sources linked above and edited it for accuracy and clarity. It is general information, not legal, tax, investment or financial advice; talk with a qualified professional about your situation. Cannabis remains subject to conflicting federal and state law, so consult an attorney and a CPA before leasing to, investing in or operating a cannabis business.