Long Beach City Council this week voted to allow more cannabis dispensaries and marijuana companies that only offer delivery services, but urged employees to figure out how to pay for the expanded program without raising taxes.
“It could potentially paralyze the companies we want to build,” Al Austin said of the rejected tax increase. “That is my real concern.”
The city’s social justice program was launched in 2018 to enable those who have been victims of cannabis crime to benefit from legalization.
The ordinance will allow eight more pharmacies to work in Long Beach, exclusively for those who qualify for the share program.
To determine these new eight business owners, the city’s employees would run a performance-based lottery, which means that applicants go through an interview first and the appropriate candidates are selected at random. But this process, too, has been questioned by councilors, and some have called for a process that does not involve a lottery.
To qualify, equity applicants must meet one of the following requirements:
- Had an annual family income of 80% or less than the region’s median income last year.
- Have a net worth less than $ 250,000.
- You have either lived for three years in a Long Beach census area, where the majority of residents have incomes 80% or less than the median income for the area, or were arrested prior to November 8, 2016 for a cannabis offense.
- Is a resident who is receiving unemployment benefits.
According to an employee presentation, none of the 32 pharmacies in Long Beach are owned by equity applicants.
“There is a lack of diversity in the cannabis sector,” said Carlos Zepeda, a local cannabis entrepreneur, at the meeting on Tuesday evening, October 12th.
Legalizing delivery-only companies, meanwhile, could allow more equity seekers to enter the industry as they would not need to secure property in a designated cannabis area of the city, according to an employee report. While cannabis can already be delivered in Long Beach, pharmacies perform these operations
However, under the original proposal, Long Beach would have increased its cannabis business tax by 0.25%, which the staff report said would support the increased cost of expansion.
“I am strongly against the tax hike,” said Elliot Lewis, CEO of Catalyst Cannabis in Long Beach.
The council agreed – and rejected the tax increase.
Supply-only cannabis companies are instead taxed the same as medical and adult pharmacies, the staff report said, which is 6% of gross medical sales and 8% of gross adult sales.
In the meantime, staff will be looking for grants and other sources of funding to fund the expansion of the program.