Leaders to discuss lowering taxes for non-retail cannabis businesses on Tuesday

A potential pilot program that would adjust tax rates, provide incentives and streamline processes for non-retail cannabis businesses will be discussed Tuesday by the Economic Development and Finance Committee.

Councilman Rex Richardson—who chairs the committee—said while dispensaries have opened up throughout Long Beach, manufacturing hasn’t taken off, resulting in the city missing out on job creation and economic opportunities.

“These are new age manufacturing jobs, living wage, union jobs that can support our families,” said Richardson, who represents North Long Beach.

These future jobs also have the potential to help those most impacted by industry before it was fully legalized.

Last summer, the City Council adopted a Cannabis Social Equity Program that allows low-income individuals and communities impacted by cannabis enforcement policies to access legal cannabis business ownership and employment opportunities, according to the city.

Richardson—who has been working to revitalize the city’s northside, or Uptown, through various development projects—says there are underutilized industrial spaces in the area that can potentially be job creators, without disrupting the quality of life in neighborhoods.

Members of the city’s local cannabis organization, the Long Beach Collective Association, hopes the pilot program will also address the current tax structure, as businesses are being taxed before bringing in revenue.

“Realistically, they’re somewhat ridiculous,” said Steve Neal, LBCA executive director and former Long Beach councilman.

Neal said the fact that the city is looking at cannabis regulation from an economic development perspective “is a good sign” because with the current tax structure the city’s projected cannabis revenue isn’t achievable.

Adam Hijazi, a member of the LBCA who owns two dispensaries, said when legislation was first put into place the tax structure was theoretical. Now there’s more data available—and more cities lowering their taxes.

“We’re really looking at modernizing the city to allow businesses to compete in today’s market,” said Hijazi.

There were once hundreds of cannabis manufacturing applicants, Hijazi noted, but now he thinks only 60-70 applications remain.While some issues were linked to zoning restrictions, applicants have also been burdened with taxes and an arduous implementation process.

The agenda item will request staff to provide a report to the City Council within 30 days on the feasibility of the 24-month pilot program.

The committee is scheduled to meet at 3:30 p.m. on Tuesday, April 9 at Council Chambers, at 333 W. Ocean Blvd.

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