Long Beach gears up to allow more cannabis dispensaries, but with higher taxes • Long Beach Post News
A successful voting measure to legalize cannabis sales in 2016 capped the number of dispensary licenses at 32, all of which were claimed.
The city council plans to create new opportunities for “equity” candidates who meet certain criteria.
On Tuesday, leaders could vote for the city attorney to draft a new law that would allow additional adult dispensaries to operate in the city, which could include changes to park and beach buffer zones, and a rate hike. of the cannabis tax.
The recommendations the council will consider were contained in a feasibility report recently posted on the city’s website.
He called for a host of changes, including strengthening the city’s municipal code to help protect equity claimants from predatory business partners and increasing the cannabis tax rate by 0.25% for help pay for additional staff to support equity seekers throughout their business operations.
The report suggested using a hybrid approval process that would review applications with a merit-based approach to determine which applicants were most likely to be successful, and then submit them to a lottery to determine who would get one of the eight licenses. .
City Councilor Al Austin, who requested a feasibility report in March to see if the city could create new licenses, said he was encouraged by the report. While he would like things to move as quickly as possible, he said he wanted to make sure the city is doing it right.
“I think we’ve learned a lot about cannabis,” Austin said. “It’s a constantly evolving public policy topic and we strive as a city to become better and more equitable, like the others, every day. “
Edgar Cruz, who plans to apply to become one of eight dispensary owners, has widely praised the city for its efforts to create these licenses, even though he and others had insisted more.
“We really have to understand the true definition of fairness,” said Cruz. “There are 32 stores in operation and there are no stores for blacks or browns and now they are adding eight. It is still not fairness.
Cruz said he and others will continue to push for new dispensary ownership opportunities for capital applicants in the future, but added that he was excited about Tuesday’s vote.
“We haven’t had the opportunity to have dispensaries here, so seeing it move forward is a big step, even with all the downsides,” said Cruz.
One of the downsides highlighted by Cruz and the owners of existing dispensaries was the proposed tax increase, something the industry has struggled to reduce for years due to continued competition with the illegal market that can charge. lower prices because they don’t pay taxes.
Elliot Lewis, who owns several dispensaries in the city, including the recently approved one on Avenue des Pins, said existing operators either have growing debts or underpaid employees to make up for the sales flight to black market.
“One thing is for sure, the legal market is not functioning in its current structure,” Lewis said. “Raising taxes is contrary to any concept of social equity.
Lewis said the tax increase could increase the possibility that dispensary owners will end up failing because owners like him, who have better purchasing power and can get certain brands usually not available for small operations, will have greater ability to reduce prices to offset tax increases.
Lewis praised the city’s efforts to develop and expand the equity agenda and for taking the time to listen to and integrate industry and community contributions, but called the proposed increase ” tax grenade ”.
Adam Hijazi, president of the Long Beach Collective Association, agreed the tax increase would be negative for the industry, adding it would create pricing issues for retailers and customers.
LBCA members are more concerned about taxes than new dispensaries that may reduce their market share, Hijazi said.
“It’s already difficult, and it’s not because of eight more licenses, 10 more or five more dispensary licenses, it’s because of the current market conditions that exist,” Hijazi said.
Emily Armstrong, the city’s cannabis program manager, said staff believe the tax increase shouldn’t hurt the industry too much, but the revenue it generates could support new positions to secure the prosperity of capital business owners.
“The concern on our part is that it’s one thing to try to get them through the application process, but the licensing process could take years,” Armstrong said. “Once they get licensed and go operational, we still work with them and support them. “
She said she hoped that the proposed reduction in buffer zones to expand the city’s “green zone”, the areas where clinics can legally operate, may remove some of the influence that landowners currently have over them. candidates looking for a location to open a dispensary which Armstrong said high rents and lack of availability were one of the main barriers to entering the market.
“It’s sort of those golden areas where they [owners] can pretty much do whatever they want, ”Armstrong said.
Hijazi’s Green Room on Seventh Street was the city’s first cannabis dispensary license after sales legalized in 2016. He said he supported the report’s suggestions, but said he would like to see added two things that could help equity owners once they open their doors.
He said he would like to see the buffer zones between dispensaries increased from 1,000 feet to 1,500 feet to avoid oversaturating a given neighborhood, and that the new equity licenses could eventually sell medicinal cannabis.
Since drug sales have been approved by ballot, city council only has the power to authorize additional use licenses for adults.
A memo from the city said adult sales account for around 95% of sales in the city, but Hijazi pointed out that medical cannabis is taxed at a lower rate – 6% versus 8% for adults – and that it provides greater access for people who need more potent products to help with chronic disease.
Allowing these new operators to sell medical cannabis would likely require voter approval, but Hijazi said it could be beneficial for the new owners.
“Whether it’s 5% or 10% of sales, when you run a business it can add up,” Hijazi said.
With construction of Long Beach dispensaries, city council could expand cannabis store windows for stock owners
Report Says Long Beach May Create More Dispensary Licenses, But That May Require Zoning and Tax Rate Changes