Numerous California Cities Approve Cannabis Retail Measures

A majority of the cannabis-related initiatives that were approved were located in Los Angeles and San Diego counties, green lighting the possibility of 70 additional cannabis retail licenses. In California, Los Angeles leads as the most populated county, followed by San Diego County, Orange County, Riverside County, and San Bernardino County.

Los Angeles County voters approved 25 retail licenses with Measure C by 59.88%, which enacts taxes in unincorporated areas of the county. This includes $10 per square foot for cultivators, 6% tax on gross retail receipts (as well as a gross receipts tax, including 2% tax for testing facilities, 3% tax on distribution, and 4% for “manufacturing and other marijuana business facilities.”) Additionally, Santa Monica voters approved Measure HMP with a 66.79% “yes” vote to implement taxes for non-medical cannabis retailers, medical retailers, and all other licensed cannabis businesses (the city currently only has two licensed retailers). Cannabis-related measures in Claremont, Cudahy, Lynwood, and South El Monte also passed. However, there were numerous cities that chose not to embrace cannabis such as Hermosa Beach, Manhattan Beach, and El Segundo all chose to maintain bans on commercial cannabis businesses.

San Diego County, which has only approved five cannabis businesses so far, saw the approval of a cannabis tax through Measure A with 57.28%. This implements a 6% tax on retail businesses, 2% on testing, 3% on cultivation (or $10 per canopy square foot, which is an adjustment for inflation) and 4% for all other businesses. County officials estimate that these taxes could generate up to $5.5 million annually in the general fund, and could lead to 20 new cannabis business licenses. According to George Sadler, CEO of the San Diego-based cannabis brand Gelato, any news is good news. “Access has always been an issue,” said Sadler. “Any progress is a big plus.”

Currently, most of Orange County doesn’t allow for cannabis businesses with the exclusion of the city of Santa Ana. However, last week Huntington Beach voters approved Measure O with a yes vote of 54.69%, to approve an ordinance that will implement a 6% tax on gross receipts for retailers, and 1% of gross receipts for other cannabis businesses (estimated to generate $300,000-$600,000 annually). This could lead to up to 10 retail cannabis licenses. In Laguna Woods, voters also approved a cannabis tax that would go toward general city services with Measure T with 62% of the vote.

In Northern California, Sacramento County voters were presented with a cannabis tax measure called Measure B but it failed. Although 53.49% of voters approved of this initiative, it required a 2/3 vote (or 66%+) to pass. Neighboring cities such as Monterey and Pacific Grove approved tax measures. In Sonoma County, Healdsburg voters approved Measure M.

In San Bernardino County, voters approved a tax initiative in Montclair with Measure R. Central Californians in Kings County, Avenal approved a tax initiative as well with Measure C, as well as voters in McFarland, which is located in Kern County.

While local cities and counties in California delivered on cannabis initiatives, the state has also been implementing other changes recently. 

California state voters also chose to keep Gavin Newsom as governor for another term. Earlier in October, Newsom signed a bill called the “Alternate Plea Act” that will help defendants who have been charged with drug-related offenses. According to the Drug Policy Alliance, the “public nuisance plea will carry the same criminal penalty as the drug offense charged but without triggering the collateral consequences.”

“With this plea option, individuals will be able to resume their life after incarceration and not be blocked from securing housing and employment,” the organization explained.

In September, Newsom also signed a bill to protect employees who choose to consume cannabis off-the-clock. “For too many Californians, the promise of cannabis legalization remains out of reach,” Newsom said in a press release. “These measures build on the important strides our state has made toward this goal, but much work remains to build an equitable, safe and sustainable legal cannabis industry. I look forward to partnering with the Legislature and policymakers to fully realize cannabis legalization in communities across California.”

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