Council Moves to Adopt New Recreational Marijuana Law

Sean Belk

The Long Beach City Council has agreed to allow sales of recreational marijuana in the city as early as August under a new comprehensive city ordinance approved in a 7-1 vote at its meeting on June 19.

The ordinance, which will be up for formal adoption in a second reading on July 10, comes after voters passed a statewide ballot initiative, known as Proposition 64, in 2016 to legalize the recreational adult use of marijuana or cannabis in California. The initiative was merged with legislative bills that allow medical marijuana into a single act known as the Medicinal and Adult-Use Regulation and Safety Act (MAURSA).

The new citywide law stipulates adult-use cannabis business restrictions, such as: minimum buffer distances from sensitive uses such as schools, beaches, parks, libraries and day care centers; security and surveillance requirements; hours of operation; and local hiring provisions that include establishing a new cannabis social equity program.

In a presentation, Ajay Kolluri, the city’s cannabis program manager and assistant to the city manager, said as of June 1, the city has so far licensed 12 medical cannabis businesses, including nine dispensaries, one cultivator, one manufacturer and one testing laboratory. The businesses are permitted to operate under Measure MM, a city ballot measure approved by Long Beach voters in 2016 that allows medical marijuana dispensaries.

He added while 259 businesses are in the process of obtaining a medical cannabis license, it’s uncertain how many of the pending businesses will actually open as the cannabis business start-up failure rate remains high in other states where marijuana is legalized, such as in Colorado and Washington.

With recreational marijuana businesses authorized to operate, city staff projects a potential increase of up to $750,000 in tax revenue for the FY 19 General Fund, Kolluri said. He added, however, that city staff is not recommending budgeting any increase in tax revenue from the adult-use cannabis market at this time as “Cannabis tax revenues are incredibly difficult to predict.”

Kolluri said the adult-use ordinance will require “co-location” for medical and adult-use cannabis dispensaries, as the ordinance amends Title 21 of the Long Beach municipal code to add cannabis-use types to the city’s zoning tables to ensure adult-use cannabis businesses locate around other appropriately zoned uses.

The Council approved the ordinance brought forward by city staff with added revisions after imposing a six-month temporary ban or moratorium on adult-use cannabis businesses. In preparing the ordinance, city staff drew from a wide range of resources, including departmental policy recommendations, neighborhood and industry meetings as well as comments from a dedicated hotline and email address, Kolluri said.

Vice Mayor Rex Richardson, who represents the 9th District and made the first motion to approve the ordinance, suggested revisions to city staff’s recommendations, including allowing adult-use cannabis dispensaries to operate until 9 p.m. (instead of 8 p.m. as originally proposed by city staff) and allowing adult-use cannabis delivery services to operate until 10 p.m.

Another policy change includes requiring adult-use cannabis businesses to meet a local hiring goal that mandates 40 percent of annual total work hours be performed by employees eligible for a cannabis social equity program. City staff had originally proposed a 25 percent social-equity hiring requirement.

According to city staff, the goal of “cannabis social equity,” which essentially gives individuals with past cannabis-related criminal convictions and arrests or residents from low to moderate-income census tracts priority in the hiring process, is to recognize and address negative impacts that federal and state cannabis enforcement policies have had on low-income communities.

Staff notes that low-income communities have “experienced the greatest impact of arrests and convictions for low-level offenses such as cannabis use and possession. City staff adds that “cannabis convictions have led to permanent loss of property, disqualification from employment opportunities, reduced earnings potential, exclusion from public benefits such as housing assistance or student financial aid, and other negative impacts.”

Kolluri said businesses may meet the social equity requirement, which has been adopted in Los Angeles, San Francisco and Sacramento, if they “show a good faith effort to hire equity employees.” He noted that the city’s Pacific Gateway Workforce Innovation Network will oversee the program such as advertising, registering individuals, confirming employee eligibility, connecting equity employees with businesses and monitoring businesses for compliance.

City staff estimates a one-time cost of $266,000 to develop the social equity program, which will include an automatic expedited plan check review for businesses and fresh start clinics to help potential employees expunge cannabis-related criminal records. Ongoing costs for the program are expected to be covered by a $2,000 annual fee charged to adult-use cannabis businesses.

In addition, the ordinance requires that all adult-use cannabis businesses enter into a peace agreement with a labor union that represents cannabis workers in Long Beach, a requirement also stipulated under Measure MM.

Kolluri said violations of the ordinance may be administered through various administrative, civil and criminal remedies, including: holds on cannabis products; permit suspensions and revocations; administrative citations; civil penalties; and criminal penalties. The ordinance also includes an appeals process.

“The multifaceted approach to enforcement will allow the city to tailor enforcement actions to the nature of each violation,” he said.

Fifth District Councilmember Stacy Mungo, who cast the lone dissenting vote against adopting the ordinance, also brought forward revisions, including requesting that hiring provisions not be restricted to low to moderate-income census tracts and that new adult-use businesses pass a “performance period” and be required to open first as a medical marijuana business for six months. However, Mungo’s amendments were not supported by Richardson or the rest of the Council. 

Recognizing a diversity of opinion on the matter from different interests in the city, Richardson noted that the Council has the ability to “tweak” the ordinance at any time in the future as issues arise and businesses move through the approval process.

“There’s nothing that stops us from coming back and working on changes as we evaluate what this process looks like,” he said. “There will be changes to this ordinance. This is going to be an ongoing process.”


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