After lengthy discussion during its Tuesday, Jan. 25 meeting, the Signal Hill City Council voted to go forward in adding a measure to the November ballot letting voters decide if cannabis businesses can operate in the city.
In a 3-2 vote, the council agreed to begin drafting a resolution allowing cannabis businesses for the November election ballot for voters to approve or not. The City will first get feedback from its commissioners and the community on how cannabis businesses should operate and how they should be taxed.
The City may also have to hire a consultant to ensure the tax structure defined in the resolution is sound, City Manager Hannah Shin-Heydorn noted.
Signal Hill currently bans all cannabis businesses—including cultivation, manufacturing, testing and sales—to operate in the city, only allowing delivery from other places to its residents.
According to the council’s decision, the City will present information on cannabis businesses to the Parks and Recreation Commission and Planning Commission, as well as host a series of community workshops to discuss the ballot measure and share a map of potential cannabis business locations.
“We’re going to get more input as we move forward,” Councilmember Edward Wilson said.
The City has identified two areas on the east side of Signal Hill viable for cannabis businesses that are outside buffer zones 1,000 feet away from locations such as schools, daycare centers, places of worship, residences, civic centers and parks. State law requires buffer zones of at least 600 feet.
The two identified areas—-one surrounding the intersection of Orange Avenue and 28th Street and the other southwest of Redondo Avenue and E. Willow Street—are currently zoned for commercial and industrial use.
Vice Mayor Tina Hansen and Councilmember Lori Woods voted against moving forward with a ballot measure, saying the two viable locations may not be conducive to successful cannabis businesses and therefore not generate enough tax revenue to warrant the costs.
The City would face nearly $500,000 in staff and legal expenses each year to regulate cannabis businesses, according to City Manager Hannah Shin-Heydorn. In addition to existing administrative and legal staff, the City would need to hire a police officer, financial analyst and assistant planner, she said.
According to a consultant’s estimate last year, Signal Hill could see tax revenues of between $161,000 and $966,000 from two cannabis businesses in the first year of operation, depending on the type of business and tax rate. The midpoint of those amounts is $563,000.
Woods argued that if the City only sees tax revenue on the low side of that range—especially since there is an existing cannabis retailer near one of the sites—it would lose money each year.
“The numbers don’t add up,” Woods said, adding that even for cannabis testing businesses that need less policing, tax revenue is not guaranteed.
Hansen agreed, further noting that if the City wanted to change the ordinance later, it would have to take the measure back to voters. One reason would be if the City had to relocate its planned housing developments and thereby change the buffer zones.
Though Signal Hill residents surveyed in early 2020 favored allowing cannabis businesses, Woods pointed out that five separate petitions between 2016 and 2017 to get a cannabis measure on the ballot failed to garner enough signatures. Four petitions were to allow cannabis dispensaries and one was to tax them.
Two Signal Hill residents expressed disapproval to the council of allowing cannabis businesses. Realtor Terry Rogers questioned how profitable Signal Hill businesses would be with “big box” cannabis retailers nearby in Long Beach, and resident Randy Hartshorn argued that the human health toll would outweigh any tax benefits.
“Cannabis is addictive,” Hartshorn said. “Signal Hill might profit from the businesses […] but at what cost and at whose expense?”
Wilson, who works in the cannabis industry, said voters should decide and the market should play out. In agreeing on the ballot measure, voters would only be allowing businesses the chance to operate.
“Businesses survive or don’t survive,” Wilson said. “It’s part of the economic process.
