City Council Votes to Place Marijuana Business Tax Measure on November Ballot

The Long Beach City Council voted to place a measure on the November Special Municipal Election and statewide General Election that would tax medicinal and recreational marijuana use, and different rates, if the petition for repeal passes.

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Specifically, the city’s measure—proposed by Vice Mayor Rex Richardson—can coexist with the signature-driven initiative spearheaded by Bob Kelton to repeal the city’s ban on marijuana businesses within the city, in addition to reducing the city’s tax on recreational and medical marijuana.

The move to propose the measure last month came just one week after the council voted to approve placing Kelton's initiative on the November 8 ballot, after it was communicated by the city clerk’s office that it most likely had the required number of votes to qualify.


 

According to the city clerk, the measure conflicts with the signature-driven initiative in just the area of taxation.

Kelton’s measure proposes adopting “regulations permitting approximately 32 retail medical marijuana businesses located in areas not zoned exclusively for residential use with minimum distance restrictions from sensitive uses, and provide for the establishment of an unspecified number of marijuana cultivation, distribution, manufacturing and testing businesses,” according to a release from the City Clerk’s office.

The city’s measure proposes increasing gross receipt sales tax rates by 6 to 8 percent for medical marijuana dispensaries, 8 to 12 percent for nonmedical marijuana dispensaries, 6 to 8 percent for processing, distributing, transporting or testing marijuana/related products and a square foot tax between $12 to $15 for marijuana cultivation. The proposal is projected to raise approximately $13 million annually, requiring annual expenditure reports, until voters decide to end the measure.

The councilmembers who spoke up in support of the initiative, which was slated to go toward public health and safety services.

“It’s a very uncertain time and I think that the way we can provide some certainty is to ensure that the funds go to public safety and homelessness and the other issues that have been connected to public safety,” said Fifth District Councilwoman Stacey Mungo, looking to Richardson. “Thank you for your work on this I think it was remarkable, I know a lot of analysis was done.”

Price said that given the estimated $7.1 million in public safety services and time the marijuana measure is expected incur (aptly described as a budgeting shortfall), she supported the city’s measure.

“It’s important for the city to have the necessary revenue to deal with both the public health and safety needs, particularly on the cost of recovery on the general resources side, so it’s important that this measure move forward,” said Councilwoman Suzie Pearce. “It’s important that voters have a choice to be able to pass at least the city’s portion on this piece.”

Kelton wrote a letter last week to the city council protesting the taxation of medicinal marijuana dispensaries, citing the medical benefits. He forward a copy to the Post.

“One of the problems medicinal users continue to face is the perception that medicinal users are actually recreational users,” he wrote. “A person undergoing chemotherapy and radiation treatments is not a recreational user. Cannabis has legitimate medical benefits. When used medicinally, it should probably be sold tax free.”

The measure passed, 9-0, with the council requesting the city clerk attorney prepare a non-binding resolution indicating the city’s intent to use the funds for public safety, public health, homelessness and general services for regulation/enforcement.



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