Los Angeles County voters in California approved Measure C on Tuesday, which will impose a tax structure on businesses in unincorporated areas of the county once they receive permits, Los Angeles Daily News reports.

At the time of writing, nearly 60% of the votes were in favor of Measure C as the final tallies came in.

Measure C imposes several initial tax rates: 4% on gross receipts for retail operations, 3% for manufacturing and distribution, $4 per square foot for mixed light cultivation, and $7 per square foot for indoor cultivation. The Los Angeles County Board of Supervisors may decrease or increase the tax rates within the maximum approved by the voters after July 1, 2026.

It’s important to note that Measure C itself does not legalize cannabis sales in the county, with additional steps before the industry can launch. The Board of Supervisors still needs to vote on that, and they’ve indicated they plan to do so in early 2023.

“All cannabis business activity will remain prohibited in the unincorporated areas of the County until the cannabis business permitting program is launched in 2023,” the bill summary reads. “This measure would make it legal for the County to tax the revenues of cannabis businesses operating in these areas. Once the permitting program launches, a cannabis business operator will need to obtain all the required permits and licenses from the appropriate state and local regulatory agencies including a cannabis business permit issued by the Los Angeles County Office of Cannabis Management.”

The Office of Cannabis Management (OCM) under Los Angeles County’s Department of Consumer and Business Affairs is developing an equitable commercial cannabis program that includes permitting and resources for eligible applicants with a proposed launch in late 2023.

“The approach we’ve adopted will equitably distribute legal cannabis businesses in each supervisorial district and specifies that cannabis cultivation will only be permitted indoors—not outdoors in greenhouses,” Supervisor Kathryn Barger said at a recent board meeting.

“Our board must be clear: we will not tolerate illegal cannabis operations. Growers who operate illegally undermine our efforts to create a regulated and responsible cannabis industry, and often do so at the expense of the rural communities I represent. I’m firmly committed to upholding the law and will corral all available resources to enhance enforcement and abatement efforts.”

County officials estimate a total of $10.4 million in tax revenue that would go to the Los Angeles County General Fund and a cannabis equity program that would provide equitable access for entering the cannabis industry.

For the time being though, cannabis businesses remain prohibited in unincorporated areas of the county until the permitting program launches.

Any existing or newly established cannabis businesses in the unincorporated areas must register with the Los Angeles County Treasurer and Tax Collector within 30 days of commencing operation once the permitting program has launched or within 30 days after the effective date of this ordinance.

Regulations are still being developed, but Los Angeles County staff said the initial plan will likely allow for up to 25 storefront retail cannabis businesses countywide, 25 delivery retail businesses, 10 indoor/mixed light cultivation establishments, 10 manufacturing businesses, 10 distribution facilities, and 10 testing laboratories.

A similar vote also took place nearby in San Diego County.

Voters also decided whether or not to approve Measure A in San Diego County’s unincorporated areas will pay a tax that would generate revenue going toward government services such as health care, fire safety, and parks.

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Los Angeles County has long been home to illegal cannabis endeavors, and now the Board of Supervisors has approved the introduction of an ordinance that could charge illegal cannabis operations tens of thousands of dollars per day.

The Los Angeles County Board of Supervisors voted unanimously on Tuesday to introduce an ordinance to start fining illegal cannabis businesses. Any cultivation or dispensaries operating without a permit in unincorporated areas of the county could soon be charged $30,000 every day. Although the introduction was approved, the ordinance still needs to be voted on by the Board for formal adoption.

The official motion text describes the “nuisance abatement ordinance” that could be approved in a future meeting. “The unpermitted commercial cannabis activities including illegal cannabis cultivation are incredibly profitable and in particular, cannabis cultivation has continued to proliferate due to the ease of establishment in more remote and rural locations,” the motion reads. “Therefore, the penalties contained within the draft ordinance should, consistent with State law, be adjusted and increased to ensure that they act as a deterrent to the continued operation of illegal commercial cannabis operations.”

The motion was written by Supervisors Kathryn Barger and Sheila Kuehl. “The County Code currently prohibits all commercial cannabis activity within the County’s unincorporated areas, including the establishment, maintenance, and operation of any commercial cannabis business activity, and the renting or leasing of, or allowing property to be used for that purpose in all zones,” the motion states. “However, the County continues to be inundated with unpermitted cannabis dispensaries in the unincorporated areas. Despite the efforts of numerous County departments, the growth of unpermitted cannabis dispensaries continues to outpace enforcement.”

Barger presented the motion with the hope that it could help cull illegal cannabis operations, noting that water supplies that contain chemicals pose both a threat to public safety, among other concerns. She states that even though the county’s work against illegal cannabis is steadfast, a lack of “legally enforceable options” puts the efforts at a disadvantage.

In a press release, Barger summarized how these illegal cannabis businesses are harming the county. “Unpermitted commercial cannabis cultivation is profitable and has thrived in the rural Antelope Valley because of how easy it is to stand up operations. Communities in the desert continue to report illegal large scale cannabis grows that have been accompanied by water theft, trespassing, trash and the use of dangerous pesticides and fertilizers, putting residents’ health and safety at risk.”

Supervisor Sheila Kuehl also agreed that something needs to be done. “California voters legalized recreational cannabis in order to create a system that assured consumers of product safety while prohibiting cannabis access to minors,” said Kuehl, “but illegal cannabis operations continue to  undermine the will of the people. This motion puts teeth in enforcement and ensures that unpermitted dispensaries face stiff penalties in the future.”

Supervisor Janice Hahn confirmed that strengthening and protecting the region’s legal cannabis businesses is also a way to tackle the illegal businesses head-on.

“I do know that providing a legal pathway for people to grow, produce, sell cannabis can help in some way to tackle the illegal market,” Hahn shared. “Hopefully, we’re going to be voting soon on the idea of legally providing options for cannabis businesses in unincorporated county [areas].” A news release on Barger’s website confirms that a study is being conducted to determine recommendations for legal cannabis businesses, such as retail, manufacturing, distribution and more.

In October 2021, Los Angeles County set aside $5 million to fund the effort to combat illegal cannabis in Antelope Valley. A press release states that $2.4 million will go to the Los Angeles County Sheriff’s Department and $1.2 million toward the department’s Marijuana Eradication Team, while $503,000 will go toward Lancaster Sheriff Station overtime patrols and $707,000 will be used to buy trucks that can traverse tough terrain in these investigations.

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