The city of Long Beach wants residents to consider approving a tax measure
on medical and recreational marijuana to help offset enforcement costs
should voters pass one or more citizen-backed ballot measures come
November.
Vice Mayor Rex Richardson said the city needs to consider putting a safeguard in place to capture tax revenue because, if approved, a local medical marijuana ballot measure includes provisions that would repeal taxes related to sale and cultivation that were adopted by voters in 2010 and significantly reduce voter-approved taxes on medical marijuana.
The City Council on Tuesday asked City Attorney Charles Parkin to bring a four-part tax measure back to council for a vote on Aug. 2, the final date for the city to place a proposal on the Nov. 8 ballot. The measure also prepares for financial hurdles the city may face should California voters approve Proposition 64, a citizen-backed initiative that would regulate and tax recreational marijuana for adults 21 and older statewide.
The city tax measure would need to receive more votes than the local initiative in order to pass. Parkin said it would apply only to the taxation, leaving other sections related to regulation of medical marijuana untouched.
Here is what the city proposed:
• Establish a gross receipts tax of 6 percent on medical marijuana dispensaries, with an option for the council to increase the tax to a maximum rate of 8 percent;
• Establish a gross receipts tax of 8 percent on the recreational sale of marijuana for adult use with an option to increase the tax to a maximum rate of 12 percent;
• Establish a gross receipts tax of 6 percent on any business located in Long Beach that engages in the manufacture, testing, processing, distributing, packaging or labeling of marijuana or cannabis-related products, medical or nonmedical, for wholesale to other retail marijuana businesses that sell those products to customers, with an option to increase the tax to a maximum rate of 8 percent. If such a business conducts retail sales, the gross receipts tax identified above on retail sales in Long Beach will apply in lieu of the taxes in this section;
• Establish a tax of $12 per square foot of space dedicated to the cultivation of marijuana over the canopy area with an option to increase that tax to a maximum rate of $15 per square foot.
“This approach is balanced, it’s modest, and it assures that the tax revenue is captured to ensure that the city of Long Beach does receive public benefit should the voters move forward with adopting this medical marijuana ordinance,” Richardson said on Tuesday.
Third District Councilwoman Suzie Price also asked the city attorney to come back at a later date with a resolution declaring intent to set aside revenue for public safety costs, which will likely include curtailing illegal drug operations.
“Our police chief has indicated very publicly that our Police Department cannot handle additional responsibilities ... that illegal operations would bring,” Price said. “What we’ve seen in the city of Los Angeles, for example, is there is 135 legal dispensaries and 1,000 illegal ones. It is going to place strain on our Police Department, that’s just a reality.”
Former Councilwoman Tonia Reyes-Uranga, speaking during public comment, cautioned the council to be conservative when it comes to taxing medical marijuana.
“If it was my preference, I would not tax medical marijuana at all, but put the burden on recreational,” she said to the council on Tuesday. “Have some consideration for those people who actually use this to alleviate their pain and to use it because they need it. It is an economic burden as well as a physical one.”
Parkin said he would return with a tax measure on Aug. 2 and bring back some options for the council to discuss its intent to direct revenue from marijuana taxes toward law enforcement, code enforcement or any other area the city may see fit.
Vice Mayor Rex Richardson said the city needs to consider putting a safeguard in place to capture tax revenue because, if approved, a local medical marijuana ballot measure includes provisions that would repeal taxes related to sale and cultivation that were adopted by voters in 2010 and significantly reduce voter-approved taxes on medical marijuana.
The City Council on Tuesday asked City Attorney Charles Parkin to bring a four-part tax measure back to council for a vote on Aug. 2, the final date for the city to place a proposal on the Nov. 8 ballot. The measure also prepares for financial hurdles the city may face should California voters approve Proposition 64, a citizen-backed initiative that would regulate and tax recreational marijuana for adults 21 and older statewide.
The city tax measure would need to receive more votes than the local initiative in order to pass. Parkin said it would apply only to the taxation, leaving other sections related to regulation of medical marijuana untouched.
Here is what the city proposed:
• Establish a gross receipts tax of 6 percent on medical marijuana dispensaries, with an option for the council to increase the tax to a maximum rate of 8 percent;
• Establish a gross receipts tax of 8 percent on the recreational sale of marijuana for adult use with an option to increase the tax to a maximum rate of 12 percent;
• Establish a gross receipts tax of 6 percent on any business located in Long Beach that engages in the manufacture, testing, processing, distributing, packaging or labeling of marijuana or cannabis-related products, medical or nonmedical, for wholesale to other retail marijuana businesses that sell those products to customers, with an option to increase the tax to a maximum rate of 8 percent. If such a business conducts retail sales, the gross receipts tax identified above on retail sales in Long Beach will apply in lieu of the taxes in this section;
• Establish a tax of $12 per square foot of space dedicated to the cultivation of marijuana over the canopy area with an option to increase that tax to a maximum rate of $15 per square foot.
“This approach is balanced, it’s modest, and it assures that the tax revenue is captured to ensure that the city of Long Beach does receive public benefit should the voters move forward with adopting this medical marijuana ordinance,” Richardson said on Tuesday.
Third District Councilwoman Suzie Price also asked the city attorney to come back at a later date with a resolution declaring intent to set aside revenue for public safety costs, which will likely include curtailing illegal drug operations.
“Our police chief has indicated very publicly that our Police Department cannot handle additional responsibilities ... that illegal operations would bring,” Price said. “What we’ve seen in the city of Los Angeles, for example, is there is 135 legal dispensaries and 1,000 illegal ones. It is going to place strain on our Police Department, that’s just a reality.”
Former Councilwoman Tonia Reyes-Uranga, speaking during public comment, cautioned the council to be conservative when it comes to taxing medical marijuana.
“If it was my preference, I would not tax medical marijuana at all, but put the burden on recreational,” she said to the council on Tuesday. “Have some consideration for those people who actually use this to alleviate their pain and to use it because they need it. It is an economic burden as well as a physical one.”
Parkin said he would return with a tax measure on Aug. 2 and bring back some options for the council to discuss its intent to direct revenue from marijuana taxes toward law enforcement, code enforcement or any other area the city may see fit.
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