If the mayor and city council have their druthers, voters will approve Measure MA, which would set a gross-receipts tax for sales of medical and recreational cannabis, as well as establishing a tax on cultivation, processing, testing and distribution of pot in Long Beach.
However, that measure was designed to compete with another— Measure MM— which will be included on the ballot after garnering enough petition signatures— more than 35,000— from registered voters. MM would tax, regulate and allow medical-marijuana businesses to operate in the city.
(Local poll-goers will see yet another cannabis-related measure on their ballots— Proposition 64, which will legalize recreational marijuana statewide if approved.)
Long Beach Mayor Robert Garcia conducted a press briefing on the topic Monday, along with various other city officials, in his conference room at City Hall. Flanked by Fire Chief Mike Duree, Police Chief Robert Luna and Assistant City Manager Tom Modica, the mayor made a case for voters’ approval of Measure MA, primarily because, he said, MM would not fully offset the costs associated with legalized marijuana, be it medical or recreational.
He emphasized, however, that MA is a tax measure only.
“What Measure MA does not do is determine if medical and recreational marijuana should be allowed in Long Beach,” he said. “So, MA is not a vote for or against medical or recreatonal— it’s purely a tax measure, if voters vote and approve other measures.”
Garcia explained that MA is a general tax that would fund city services such as police, fire, 9-1-1 emergency response and regulation of the marijuana industry, as well as homeless-assistance programs.
Officials estimate that MA would generate about $13 million annually, if both Prop 64 and MM pass.
Indeed, there are numerous possible outcomes, with the Long Beach measures alone. Voters could approve both.
Voters could reject both. They could approve MM but not MA, or they could pass MA and say no to MM.
The Signal Tribune contacted Long Beach City Clerk Maria de la Luz Garcia for confirmation on these possibilities.
“Ballot measures MM and MA are two separate ballot measures,” she said. “So, a voter has the option of voting yes or no for each of them.”
In an email to the Signal Tribune Thursday, Michael Mais, assistant city attorney for Long Beach, further clarified the potential outcomes for the two measures.
“In order for Measure MM to pass and become effective as a regulatory ordinance, it would have to receive at least 50 percent of the vote plus one,” Mais said. “In order for Measure MA to pass, it would likewise have to receive at least 50 percent of the vote plus one, and, in addition, it would have to receive a total number of votes that is greater than Measure MM. If the above scenario were to occur, the Measure MM regulatory provisions would become operative, but the City’s tax rates from Measure MA would govern the taxation of marijuana.”
In other words, if both measures pass, medical cannabis will be permitted in the city, subject to the regulations contained in MM. The measure that garners the most votes will determine the tax rates.
“One is a regulatory and tax measure, which is the citizen measure—MM,” Garcia said Monday. “Then you have the tax-only measure, which is the City’s measure, which is MA. Of those two— because they both speak to taxes— if Measure MA…receives more votes… the tax structure that is desired by the City and the council would then go on top of the regulatory measure, and that would be the tax structure.”
Under Measure MA, sales would be taxed at 6 to 8 percent of gross receipts, but the rate would initially be set at 6 percent. Recreational sales would be taxed at 8 to 12 percent of gross receipts, initially set at 8 percent. The distribution, processing, transportation or testing of recreational and medical cannabis— when not conducted by the dispensaries that also sell the final product— would be taxed at 6 to 8 percent of gross receipts, initially set at 6 percent. Marijuana cultivation would be taxed at $12 to $15 per square foot, initially set at the former amount.
Garcia said only marijuana businesses and consumers buying pot from a dispensary would pay the tax.
“Essentially, the only folks being taxed are those that are purchasing the marijuana and the marijuana businesses themselves,” Garcia said. “No one else in the population would pay the tax. General members of the community who do not purchase, cultivate, test or process would not pay.”
He added that MM does not indicate how the City would regulate recreational cannabis.
“Regardless of whether Proposition 64 passes or not, the city council still has the ability then— if they’re interested— to craft a regulatory ordinance,” Garcia said.
When the Signal Tribune asked Garcia for his response to opponents of MA who claim there is no oversight or guarantee to how its funds would be used, the mayor pointed to two other recent measures that local voters approved.
“I think, first, the council has been pretty clear on where the funds would be spent, and I think what you’re going to see, as the council discussed, is over the course of the next few weeks, the council will be… looking at adopting a similar resolution that they adopted for Measure A, which specifies where those funds will be spent,” Garcia said. “But, to be clear, it’s a general tax, and, similar to when we passed Measure A— it was a general tax, but we specified where the funds would be spent, and that’s where we spent them, per the budget that the council just adopted.”
Police Chief Luna said that his staff has studied police departments in states where recreational marijuana is already legal, such as Colorado, to determine the level of increased strain on public-safety needs that results from permitted cannabis use.
“The bottom line is, when it comes to police and our partners over at the fire department, there is an increase of workload,” Luna said, “and there has to be a funding source if there’s going to be an increase in either police or fire workload.”
One proponent of Measure MM, however, sees the City’s desire for more taxes on marijuana as unjust, and he disagrees with how officials have determined incoming revenue from pot sales versus any public-safety costs that may arise from those transactions. For Larry King, whom the mayor and council appointed to write the sample ballot argument against Measure MA, the City has been ineffective in its research. Furthermore, his support of medicinal cannabis gets a bit personal.
King was CEO of a chain of Cingular/AT&T stores for over 30 years prior to both his parents dying of cancer. Before his mother’s death though, he turned his retail expertise to medical marijuana, with her as his first patient.
“Go ahead and tax recreational pot if that state measure should win,” King said. “But any increase in taxes on medical cannabis, over what is already offered in citizens’ Measure MM, would be an unfair and even cruel burden on the backs of the patients who have patiently waited seven long years for Long Beach to get it right.”
He said he has been a Long Beach homeowner and business operator for the last 20 years, and he takes exception to one councilmember’s characterization of med-pot distributors.
“I cringe every time [3rd District] Councilwoman [Suzie] Price says that the operators are a bunch of out-of-town profiteers,” he said. “I have never made a penny running a not-for-profit dispensary, and in fact, the actions of this City, after saying we could be operators seven years ago, have cost me my entire life savings and, as of recently, my home. And Ms. Price says we should be fiscally responsible on this subject, which she is sure will lose money. Yet she voted along with the rest of the council to allow two competing measures on the ballot, costing the City well over $1.5 million when the council could have simply voted to allow just Measure MM after the 35,000 voter voices were heard with no cost.”
King added that, since the city council banned many Long Beach medical-marijuana businesses in 2010, he has been a patient advocate, as well as a paid political and business consultant locally and around the country.
“In my work as a consultant, I have built, and often managed, several legit medical-marijuana businesses here in Long Beach, as well as in Illinois and Oregon,” he said. “This City never turned to the experienced and knowledgeable people within the industry, many of whom were formerly pre-vetted, experienced and approved by the City of Long Beach, to acquire the necessary data to judge the amount of tax revenue coming in and the costs of regulating and enforcing going out. Because they instead hired a shadowy figure under the name of ‘the Tax Whisperer’ to supply questionable data, their fiscal estimations of revenue are vastly underestimated, and their operating costs are deeply inflated. They admit they are relying on guesswork because there is not enough relevant data to make a fact-based estimation. All they had to do was ask the local experts, but they were too busy waging war on many of those experts and trying to run them out of Long Beach.”
The Signal Tribune emailed Price’s chief of staff, Julie Maleki, and communications director, Antonella Schaub, for comment, then reached Schaub by phone Wednesday morning to verify their office’s receipt of the email. Schaub said she had forwarded the Signal Tribune’s email to the councilmember so that she could respond, but a reply from Price had not arrived by press time Thursday afternoon.
King was one of five individuals who signed off on the official argument against Measure MA, which is available on the city clerk’s website. The others are Nick J. Morrow, retired Seal Beach detective and sheriff; Stephen Downing, retired deputy police chief of the Los Angeles Police Department and board member of Law Enforcement Against Prohibition; Rae Gabelich, former Long Beach city councilmember; and Diana Lejins, a disability rights advocate.
Lejins spoke to the Signal Tribune Wednesday and explained that she had asked to be appointed as an arguee on the cause through petition. She likened the city council to a “run-away freight train” that taxes to the max, “grabbing money anywhere they think they can and spending frivolously on their pet projects.”
Lejins said, on this issue, the overtaxation is especially egregious because it will be on the backs of people who are sick and/or disabled and who cannot get reimbursed for their medicine from insurance companies.
“We don’t tax pharmaceuticals, so this is just a money grab based on untruths spread by the government that [cannabis] is not medicine,” Lejins said. “Tell that to the many parents that have moved to Colorado just so their children can live using this medicine [for] cancer, epilepsy, multiple sclerosis and many other maladies.”
Additionally, Lejins said, just like alcohol and cigarettes, if taxes are high enough, the illegal black market will garner a great deal of business. “No taxes will be paid,” she said. “More people will go to jail. More expenses to the taxpayer. It’s just a vicious cycle.”
Prohibition did not work for alcohol, and it’s not working for marijuana, Lejins said, citing a quote from Abraham Lincoln that claims that prohibition goes beyond the bounds of reason in that it attempts to control a man’s appetite by legislation and makes a crime out of things that are not crimes.
“As for costs, what legal business do you know of that has to pay upfront money just in case other illegal businesses open up? We have close to 900 liquor outlets in Long Beach,” Lejins said. “Do they have to do the same? If an illegal bar opens up, do all of the others pitch in and pay for those costs?”
As for Luna’s statement during Monday’s press conference that the police department will need to reinstate its DARE drug-awareness program for students, since so many kids will see their parents using marijuana, Lejins sees some hypocrisy.
“As for DARE, what do kids do when their parents imbibe on liquid drugs?” she asked. “What happens when their parents smoke? What about parents who take pills, especially opioids, which are the most abused drug group in America today? How do parents explain all of the pharmacies in this city, the liquor stores, cigarette sales? It is far easier for kids to obtain marijuana today than alcohol because it is not regulated. Who wants to risk their liquor license selling to a minor? The gangs and cartels don’t care.”
She said that perhaps Long Beach should look to other shores for the answers.
“The ‘war on drugs’ has been going on for about 80 years,” Lejins said. “Yet, more people partake than at any other time in history. Portugal decriminalized all drugs approximately 12 years ago, and their addiction rate and drug use has gone down a whopping 50 percent. Perhaps we could learn from other countries that have seen the light and the harm prohibition has done to their people.”
