Long Beach leaders on Tuesday will consider allowing the sale of recreational marijuana at retail locations already permitted to sell medicinal marijuana.

The Council will hold a public hearing on a series of changes to its zoning laws, which dictate what types of businesses can operate where, at 5 p.m. Tuesday, June 19, at Council Chambers, 333 W. Ocean Blvd.

What led to this

California voters agreed to legalize marijuana for adult use in November 2016. That same election, Long Beach voters agreed to allow up to 32 medicinal marijuana dispensaries in the city, and approved a separate measure that would tax marijuana facilities—both recreational and medicinal—at higher rates.

Though the state law allowing adult-use marijuana went into effect Jan. 1, the city in November enacted a 180-day moratorium on any recreational dispensaries until officials could devise a policy. The moratorium expires Tuesday, June 19.

New policy

The City Council on Tuesday will consider a policy that requires recreational dispensaries to co-locate with medicinal dispensaries. So far, nine such dispensaries have opened across the city, with 23 additional businesses in the process of attaining city approval.

Non-retail businesses, such as cultivators, manufacturers, testing laboratories and distributors do not have to co-locate with medicinal businesses, but can if they chose.

All businesses must meet various requirements, including enrolling in a training program that includes preventing youth from accessing marijuana.

Long Beach officials will also consider a social equity program, similar to other cities, which seeks to level the playing field for those who have been penalized or adversely affected by prior laws on marijuana.

By the second year of operation, businesses may be required to have at least 25 percent of annual work hours performed by individuals who meet the following requirements:

• The person is at or below 80 percent of the area median income of $250,000;
• And, the person has either been arrested or convicted of a felony relating to the sale, possession, use or cultivation of cannabis that would have a citation or misdemeanor under current law; or the person has lived in a Census tract in Long Beach for three years where the median income is at or below 80 percent of the area median income.

Costs and revenue

Approval of the recreational program will cost the city about $266,000, according to a staff report submitted to the City Council. The cost is ascribed to staff time to implement the social equity program, enforcement of local laws and other costs.

The city does, however, expect to take in about $750,000 in fiscal year 2019 from sales tax on adult-use recreational businesses, which will pay 8 percent in taxes on gross receipts, as opposed to the 6 percent that medicinal businesses pay.

The city expects to take in about $2 million this year in business taxes on medicinal businesses, less than than the $5.2 million projected. Medicinal businesses were slower to get approved and open for business than anticipated, city officials said.