Council Seeks to Regulate Recreational Marijuana Businesses

It may soon be legal for businesses in Long Beach to sell marijuana not only to patients for medical purposes but also to recreational adult users.

In a 5-3 vote, the city council at its meeting on Sept. 14 agreed to move forward with plans to draft a city ordinance that would legalize and regulate commercial adult-use marijuana businesses in the city as the state’s voter-approved recreational marijuana legalization initiative, known as Proposition 64 or the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), goes into effect January 1.

The new city ordinance, expected to be brought back to council for final approval by next June, would allow, license and regulate the retail sale, cultivation, manufacturing, distribution and laboratory testing of adult-use marijuana in the city. The council agreed to put a 180-day temporary hold on adult-use marijuana businesses until the ordinance is drafted.

City staff is moving forward with the ordinance despite reservations from 3rd District Councilmember Suzie Price, who cast a dissenting vote along with 5th District Councilmember Stacy Mungo and 4th District Councilmember Daryl Supernaw.

Price requested that the city continue to ban adult-use marijuana businesses until all 32 of the city’s allowable medical marijuana dispensaries are permitted to operate. She said the city hasn’t had enough time to evaluate how medical marijuana dispensaries will impact public safety resources since only two facilities are in operation while the state has yet to release policies on recreational adult-use marijuana businesses. 

Still, with more than 63 percent of Long Beach voters in favor of Proposition 64 (a higher voter approval rate than for Los Angeles County and the state), the city council agreed to move forward with the ordinance to license and regulate adult-use recreational marijuana businesses.

While city staff noted that doing nothing could open up the city to potential litigation from marijuana advocates, some councilmembers said many surrounding cities will likely move forward with ordinances for recreational marijuana businesses in coming months.

“I do believe our voters overwhelmingly voted for recreational marijuana,” said 1st District Councilmember Lena Gonzalez. “There are a lot of other cities that are doing the same thing and we can put ourselves ... in a place where we can really make a statement and be ahead of the curve. I think that this is an opportunity for us to do that.”

Long Beach will now join the cities of Los Angeles, San Diego and Carson as the only cities in Southern California to have ordinances for recreational adult-use marijuana businesses, according to city staff.

Ajay Kolluri, the city’s cannabis program manager and assistant to the city manager, said that most surrounding cities have banned both medical marijuana and recreational adult-use marijuana businesses. Only a handful of cities, including Santa Ana, Santa Monica, Costa Mesa, Compton, Desert Hot Springs and Palm Springs, have ordinances for medical marijuana dispensaries, he said.

As for Long Beach’s commercial medical marijuana program, only two dispensaries have been permitted to operate. Those include: Connected Belmont Shore, located at 5227 2nd St. and LB Green Room, located at 1735 E. 7th St.

Kolluri stated in an email to the Beachcomber that, while approximately 200 medical marijuana dispensary businesses have applied, only 32 have been selected to proceed in the process to obtain licenses pursuant to an initiative approved by voters in November 2016. He said medical marijuana dispensaries must undergo a “point ranking and public lottery process” after submitting an application.

The timeline for awarding licenses to the remaining 30 medical marijuana dispensary applicants depends on quality of architectural drawings, the amount of time it takes to submit corrections to those drawings and a timeline for construction, Kolluri said, adding that more dispensaries should begin to open in the first and second quarters of 2018.

In addition to dispensaries, the majority of other medical marijuana related businesses, including 43 grow operators, 23 manufacturers, eight distributors and two testing laboratories, are moving through the city’s application process and are not expected to open until next year, he said.

Kolluri said the state, under Proposition 64, will only issue business licenses for adult-use recreational marijuana sales in cities that permit commercial marijuana activity. While Long Beach voters approved two ballot measures permitting medical marijuana activity, simply relying on the city’s existing permissive zoning laws may invite costly and uncertain litigation from marijuana advocates or businesses, he said.

In drafting the new ordinance, city staff is recommending that any adult-use recreational marijuana dispensary “co-locate” within the 32 medical marijuana dispensaries that have already been selected to maintain the city’s current cap on dispensary locations. Additionally, the city will determine how to process medical marijuana dispensaries that choose to convert to adult-use sales.

Upon release of the draft ordinance, city staff will present a fiscal impact report on adult-use recreational marijuana businesses at which time the city council and the public will have a chance to provide further input.

While some residents expressed concerns about how the legalization of recreational marijuana will impact the community, crime, underage use and public health, medical marijuana advocates, business owners and some councilmembers stated that leaving the local market unregulated will only allow black market illegal operations to thrive and put Long Beach businesses at a disadvantage.

“A lot of these surrounding cities are going to go recreational,” said Elliot Lewis, partner of Connected Belmont Shore, which plans to open three more dispensaries in the city. “We appreciate the opportunity here to operate in Long Beach as medical marijuana dispensaries. If we miss this opportunity to be put on an even playing field with surrounding cities, we’ll lose market share and it will undermine the industry.”

sean@beachcomber.news