Cathedral City has denied a cannabis dispensary license to a business whose adjacent growing facility has sparked huge numbers of complaints over odor from neighboring residents.
The city council voted 3-2 on Wednesday, Feb. 25, to affirm the decision of city staff to not renew the dispensary license for Cat City Cannabis Co. also known as C4. City staff said the business wasn’t able to adequately prove it had been operating a dispensary with regular open hours.
Separate from the dispensary issue, C4 calls itself the largest indoor growing facility in California. But cannabis odor permeating from the building has the company in hot water as residents of adjacent Outdoor Resort Palm Springs grow increasingly vexed.
The RV community has gathered in city council chambers over the past year or so to ask for action against what they say is C4’s cannabis stinking up the neighborhood (C4, in turn, has had employees go to praise the business and its benefits). Some residents did it again on Feb. 25 despite C4’s dispensary license renewal being legally separate from the growing (or cultivation) facility. Even when they’re owned by the same people and located in the same building, cultivation and dispensary businesses require separate licenses.
Cathedral City took steps to address odor complaints by preventing C4 from expanding its growing operation while the city examined the issue. The ire surrounding C4 sparked the city to take a look at its cannabis ordinances, resulting in stricter regulations for odor control. C4 has promised to fix the odor problem, though neighbors have continued to complain.
But councilmembers have now expressed that they want to look over cannabis regulations again after vague language, lack of evidence and miscommunication led to them having to wade through murky facts in order to make a determination at the Feb. 25 meeting.
The council ended up voting 3-2 to affirm city staff’s decision denying the license renewal, with Mayor Pro Tem Ernesto Gutierrez and Councilmember Nancy Ross dissenting.
Both sides failed to present good arguments, Ross said. Gutierrez added that there were too many ambiguities in the situation. This confusion stems from a number of areas, including that the ordinance did not clearly define how to interpret a month.
C4’s dispensary license expired on September 10, 2025, and the city’s regulations stipulate that dispensaries prove commercial activity in the month prior to renew their licenses. The result is a gray area regarding what dates C4 must prove its sales.
The business argued that there was further miscommunication with city staff that included C4 being led to believe its license was not canceled. The city also claimed there were inaccuracies in C4’s tax returns, which the company argued was untrue.
On top of that, it was unclear which renewal regulations even applied to C4.
In August 2024, the company submitted a letter of hardship asking the city to let them renew their license for a year despite no commercial activity. The request was granted. City Attorney Eric Vail said subsequent dispensary license renewals require proof of commercial activity in the previous 12 consecutive months and that local licenses are invalid after they expire.
Cathedral City considered whether to count C4’s August 2024 renewal, but City Manager Andrew Firestine said it ultimately decided to not to since Hilary, an August 2023 storm that wreaked havoc in Cathedral City, made it so it “couldn’t meet that 12-month test if they were granted the prior extension.”
City staff also visited the site on Sept.18, 2025 and Oct. 13, 2025, and reported seeing no proof a retail business was in operation there. They sent a letter to C4 the day after the October visit that said Cathedral City will renew its licenses for cultivation and distribution, but not its dispensary.
Though he voted to uphold city staff’s denial of the license renewal, Mayor Raymond Gregory said staff should’ve done a more transparent and thorough investigation with more evidence. He noted the presentation to council just showed a few photos of C4’s dispensary seemingly not operating.
Still, Gregory said he had no other choice but to deny the appeal and claimed C4 was trying to take advantage of the situation. He said the ordinance’s intent was to require dispensaries to use their licenses, which many weren’t doing, to prevent risking the business of operating dispensaries that have shared their financial struggles.
Ani Gasparyan covers the western Coachella Valley cities of Desert Hot Springs and Cathedral City. Reach her at ani.gasparyan@desertsun.com.
This article originally appeared on Palm Springs Desert Sun: Cathedral City rejects cannabis dispensary for controversial company
Reporting by Ani Gasparyan, Palm Springs Desert Sun / Palm Springs Desert Sun
USA TODAY Network via Reuters Connect
