The cannabis industry made solid chess moves in California Tuesday night—and we’re not just talking about the approval of Prop. 64. Voters in Laguna Beach, Costa Mesa and Long Beach faced decisions that would determine the fate of medical marijuana within their cities.
Laguna Beach’s Measure KK, a citizen-backed initiative rescinding the ban on medical marijuana, would have permitted a maximum of two dispensaries to open in the city. Proponents argued that it would keep residents from having to drive 50 minutes up the freeway (to Santa Ana) in order to access safe medicine, ultimately making access easier. The Laguna Beach City Council adopted a resolution opposing the measure, rather than drafting a competing ordinance. "We need your help as citizens to spread the word that we are not supporting this initiative," said council member Toni Iseman in a council meeting prior to the election. “As a council we can adopt a resolution voicing our opposition to the initiative.”
The city devised a “Defeat Measure KK” campaign, gaining support of groups such as the Laguna Beach Unified School District Board of Trustees, the Chamber of Commerce and the Laguna Beach Firefighters Association to name a few.
KK needed at least 55 percent of votes to pass. But 71.3 percent of Laguna’s voters denied the measure, deepening the roots of the seven-year-old ban.
Twenty minutes north, Costa Mesa saw three medical marijuana measures on the ballot: Measures V, W and X. While V and W targeted the current ban by allowing storefronts to open, Measure X focused on the non-retail side of the industry—manufacturing, cultivation, lab-testing, research and development, distribution and transportation.
Needing 50 percent approval to pass, Measure X collected 53.7 percent of the votes for the win. The city-backed ordinance has designated a non-retail, medical cannabis business zone north of the I-405 freeway and west of Harbor Blvd.
Keep in mind, however, that the measure doesn’t permit dispensaries in Costa Mesa. But they’re not completely out of the cards, either. The language of Measure X allows the possibility of storefronts to open down the road if the city council votes and approves it. For those who opposed Measure X, this was a part of the measure that appeared faulty, as the Costa Mesa City Council is notoriously divided on everything.
But the city most likely to set the bar for a booming marijuana industry is Long Beach. After nearly a decade of debilitating cannabis bans, the LBC approved Measure MM, the citizen-drafted medical marijuana ordinance, and Measure MA, the city’s marijuana tax measure. MM will permit 26 storefronts to open at first, with an potential maximum of 32. The measure also includes non-retail cannabis businesses to operate in the city, as well.
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Measure MA starts medical marijuana dispensaries at a gross receipts tax rate of six percent. This rate can increase in the future to a maximum of eight percent with a majority vote by the city council. Cultivation tax under MA is noted at $10 per-square-foot, while all cannabis businesses will have to pay an annual tax of $1,000.
Although it’s unclear whether Long Beach will allow recreational cannabis into the city, Measure MA includes language that addresses tax rates for “non-medical marijuana businesses.” If welcomed into the city, recreational dispensaries will be subject to an eight to 12 percent gross receipts tax rate. Non-retail businesses will have a gross tax receipts rate between six and eight percent. Cultivation tax will range from $12 to $15 per-square-foot.
But recreational cannabis won’t truly become legally available until 2018. In regards to medical marijuana, the city estimates that they’ll start processing applications for dispensaries in early January 2017. Although potential dispensary owners are encouraged to fill out the required paperwork, Measure MM grants priority to nearly two dozen people. Back in 2010, a lottery-system was used to determine who won a permit from the city to open a legal medical marijuana dispensary. These permits were ultimately discarded when the city banned medical marijuana businesses shortly there after.
Long Beach medical marijuana advocate, Larry King, one of the 2010 lottery winners, explains that the last seven years have been nothing short of agony. King not only lost his business due to the cannabis ban, but he also lost his home. The approval of Measure MM has helped restore hope and moral, for him and many others in the Long Beach medical marijuana community. “The fact that some of us are still standing is more than just a business thing,” he said. “It’s the first good thing we can cheer and be happy about.”