Prospective dispensary owner Adam Hijazi watches the initial results projected on a screen inside The Stave. Photo: Jason Ruiz
In a decisive vote, Long Beach residents approved the return of medical marijuana to the city, undoing a ban that advocates and business owners have pushed to overturn for four years, and simultaneously approved the city council’s proposed tax structure for cannabis sales by approving both local marijuana measures during last night’s election.
Measure MM—the the citizen-backed initiative—repealed the ban with a 59 percent approval from voters and now opens the way for upward of 32 medical marijuana dispensaries to operate in Long Beach. However, Measure MA, which passed with over 67 percent of the vote, will guide the rate at which sales, cultivation, testing, and if the council decides to allow it, recreational use will be taxed at.
As the electoral college map slowly filled up with red and blue states on the television screens that hanged behind the bar at The Stave Tuesday night, supporters who gathered to celebrate the anticipated MM victory waited anxiously for the fate of the local green measures. By the time the county registrar’s office reported the initial returns—both showing large leads that were never relinquished by either measure— the results for the statewide proposition to legalize recreational marijuana had already been called.
But after the initial high fives and shouts of excitement business owners, council members and supporters took time to reflect on what this would mean for the industry going forward.
Had MM surpassed MA in voter support, the proposed tax schedule put forth by the authors of the measure would’ve taken effect, but measure MA beat it out by over 8,000 votes.
Adam Hijazi, a potential business operator and member of the city’s task force that helped craft recommendations for the council to aid in passing its own marijuana policy last year, said MM’s passage was a victory for safe access and for the patients that need this medicine. While he noted that MM’s proposed flat tax of six percent in sales is not far off from the council’s proposal for a sliding scale of 6-8 percent, he expressed concerns that it could undermine legitimate operators who are competing with the black market.
“We are trying to combat the illicit market and if taxes go up people still have bills to pay and lives to live and we want to make sure they’re still coming to a regulated facility,” Hijazi said. “Generally any taxes on any businesses tend to get passed to the consumer and in this case it’s the patients. So, I think it puts the patients at a disadvantage.”
What MM lacked and MA can now provide is a basis for the city to tax testing, processing, distributing and recreational use if the council votes to allow those sales to take place in Long Beach. Under MA recreational would be taxed at between 8-12 percent for gross receipts and would also tax marijuana-related business at the same 6-8 percent rate as the gross receipts for medicinal consumption. It’s projected to generate $13 million annually which the city has indicated it will spend on public safety and public health resources.
That number could surely rise, but with recreational sales having only been legalized last night, it’s hard to project a true figure of potential tax revenue. Colorado, a constant talking point for those advocating for similar access in California, sold over $700 million in medicinal and recreational marijuana last year with $313 million coming from recreational sales. Those figures were reached with Colorado (approximately 5.3 million) having a fraction of the residents of the Golden State (nearly 39 million).
California joined Nevada and Massachusetts as states that approved recreational use Tuesday night, while three other states (North Dakota, Florida, and Arkansas) joined the wave of weed-friendly legislation in green-lighting medicinal use. Recreational sales wont go into effect in California until 2018.
Seventh District Councilman Roberto Uranga had been a strong advocate for MM and similar efforts stemming back to his wife’s tenure on the council who he succeeded in as in the Seventh District. Uranga said the votes was a win-win for the city, as patients will now have access to much needed medicine and the city will have the ability to build its officer ranks through the anticipated revenue stream.
“When we have people talk about the cost of law enforcement and what it’s going to take to enforce MM versus recreational, it’s the same, and it’s always been that way,” Uranga said. “What the revenue will bring is additional officers and our ability to build our law enforcement capacity and capability.”
Uranga’s wife, Tonia, has been an advocate for the return of dispensaries, even after her time on the council came to a close. She said the industry was not given a fair shot to work out hiccups that are inherent when introducing anything new. While her husband, like the rest of the members of the council, also supported the MA tax structure, she shared the same reservations about the possible effects it could have on businesses.
“You want to make it safe, you want to make it regulated and you want to have it reasonably priced,” she said. “Once you get to that point, if it’s not worth it then you go back to the back alleys again. So you’ve got to be really careful.”
Both Uranga and Second District Councilwoman Jeannine Pearce who was also on hand to support the passage of both measures, said that while a robust conversation would have to be had, they were optimistic that the city could eventually adopt recreational use.
“We now get to have a public conversation about the right way to use something” Pearce said. “Same thing with alcohol.”
The victory of the measures signaling the return of medical marijuana operations to the city was a high point in a night that quickly shifted to the presidential results. Regardless of party preference—or measure preference—all were in agreement that this was a good thing for those that needed safe and regulated access to medicine.
Greg Lefian, a business owner and former member of the marijuana task force, said that the progress seen in how cannabis is looked at was made evident by the passage of Prop 64 and the two measures in Long Beach. While they may not be perfect laws, he said the fact that people have concluded that adults and patients should be allowed access was a sign of the times.
He said the new chapter in the city began last night, one including medical dispensaries for a second go round, was a long time coming.
“I love the community, I love the residents,” Lefian said. “I’m proud that it’s finally going to happen. How else could I feel? I’m ecstatic.”
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