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City of Long Beach Medical Marijuana Sales Tax, Proposition A (April 2014)

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A City of Long Beach Medical Marijuana Sales Tax, Proposition A ballot question was on the April 8, 2014 election ballot for voters in the city of Long Beach in Los Angeles County, California, where it was overwhelmingly approved.

This measure authorized the city to impose a sales tax starting at 6%, with a maximum rate of 10%, on all medical marijuana sales. It also authorized an annual tax of at least $15 - with a potential maximum of $50 - per square foot for pot plant cultivation spaces in marijuana dispensaries.[1]

This tax was designed to not go into effect until the city completed and implemented its plan to legalize and regulate medical marijuana through a city ordinance. As of April 2014, there was essentially a ban in the city on the retail sale of all marijuana, including medicinal marijuana. The city council, however, was reportedly drafting an ordinance that would allow the sale of medical cannabis and enact regulation of the medical marijuana industry.[2][1]

An alternative law that would have established a 6% tax and a $30 per square foot cultivation area tax was considered by city council members but was abandoned for the bill described above, which has an initial tax rate of $15 per square foot and allows the council flexibility with regard to the tax rates.[1]

In 2010, Long Beach voters approved a measure to impose a 15% tax on businesses that sell recreational marijuana and a $25 tax on cultivation sites per square foot. This measure would have gone into effect if Proposition 19, legalizing recreational marijuana on a statewide level, had been approved. It was defeated, however, making 2010 Measure B irrelevant unless statewide legalization occurs in the future.[3]

Background

In 2010, the Long Beach City Council approved an ordinance allowing and regulating the operation of medical marijuana collectives. After several court cases and legal battles, the city repealed its ordinance resulting in a ban against the operation of medical marijuana collectives due to a lack of regulation. In the fall of 2013, the city council brought the issue forward again, commissioning the city staff to write a new ordinance to bring medical marijuana retail back to the city. At the same time, the council decided to put the Proposition A tax on medical marijuana before voters, which was set to come into effect when the council approved a medical marijuana ordinance.[4]

Election results

Proposition A
ResultVotesPercentage
Approveda Yes 26,017 74.0%
No9,12926.0%
Election results from the Long Beach elections office

Text of measure

Ballot Title

The ballot title for Proposition A was:[1]

This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.

An Ordinance of the City of Long Beach, California, amending the Long Beach municipal code by adding section 3.80.261 relating to a marijuana business license general tax.

Full text

The full text of the city ordinance that was enacted by the approval of Proposition A is available here.

Analysis

City Attorney Charles Parkin issued the following as an impartial analysis of measure A:[2]

This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.

Voter approval of Measure A would amend the Long Beach Municipal Code to establish a new business license tax on medical marijuana businesses operating in the City of Long Beach if the City Council rescinds the current ban on medical marijuana sales and adopts a regulatory ordinance. This business license tax is a “general tax” and therefore must be approved by the voters. Revenues from the tax would be deposited in the City’s general fund which is used to pay for police and fire protection, senior and youth programs, street repairs, parks and recreation, code enforcement, libraries, employee salaries and benefits and other City services. Measure A was placed on the ballot by the Long Beach City Council.

This measure, if approved, would impose on medical marijuana businesses a tax of up to ten percent (10%) of gross receipts for medical marijuana sales, with an initial tax rate of six percent (6%) and a tax of up to fifty ($50.00) dollars per square foot on all improvements used by the medical marijuana business as a cultivation facility or grow site, with an initial tax rate of fifteen dollars ($15.00). Medical marijuana businesses that qualify under state law as exempt 501(c)(3) non-profit organizations would pay ten dollars ($10.00) per square foot on all business improvements, instead of paying a tax based on the gross receipts of the business. The square footage tax rates would be adjusted annually for inflation as measured by the Los Angeles-Riverside-Orange County Area Consumer Price Index.

A “yes” vote on this proposition is a vote to approve the medical marijuana business license tax in the event the City Council rescinds the ban on medical marijuana sales and adopts a regulatory ordinance. A “no” vote is a vote to reject this tax.

The Long Beach Collective Association logo

Support

Supporters

  • The Long Beach Collective Association (LBCA)

The Long Beach Collective Association consisted of the following marijuana collectives:[5]

  • 562 Discount Meds, Inc.
  • ATS — Alternative Therapeutic Solutions
  • Avalon Wellness Collective
  • Calm & Collective Wellness Center
  • Care Alternative Meds
  • Chronic Pain Releaf Center
  • LB Collective
  • Long Beach Green Room

City council

The chosen tax bill was approved by the Long Beach city council in an eight to one vote.[1]

Arguments for

Supporters of Proposition A, including the Long Beach Collective Association, made the following arguments in favor of the approval of Proposition A:[6]

  • Because the city council would be motivated to allow and regulate medical marijuana in the city by Proposition A taxes, the legitimate market would take over the black market. This would make the city a safer place.
  • Proposition A would bring in essential revenue to the city coffers, money that is necessary for projects such as city improvement, public works, after-school programs and affordable housing.

LBCA Boardmember Adam Hijazi said, “The majority of the people we’ve talked to do not seem to have a problem with the [proposed] tax. And if it’s going to help public funding—whether it’s police, fire, parks, potholes, whatever it is—I think everybody is kind of okay with it.”[7]

The official arguments submitted in favor of Proposition A were authored by the attorney for the LBCA and are available here.[6]

Opposition

Opponents

  • Councilwoman Gerrie Schipske
  • Larry King, Long Beach resident

City council

The chosen tax bill was approved by the Long Beach city council in an eight to one vote. The sole dissenter was Councilwoman Gerrie Schipske.[1]

Arguments against

Schipske expressed concern that the tax would be burdensome on patients. She also pointed out that other prescription medicine is not taxed in California.[1]

The official arguments against Proposition A were written and submitted by Larry King, a seventh district council candidate and dispensary manager, and are available here.

The official statement in opposition to Proposition A included the following arguments:[8]

  • The taxes proposed by Proposition A are too high and are unfair to patients.
  • Proposition A opens the city up to lawsuits because it was hastily pushed through the city council and was ill conceived.

King also wrote, “This new measure was hastily pushed through Council to create an issue for this election and is ill conceived. No other prescribed medicine is taxed in California. And no other business in Long Beach has even been taxed on both gross sales and square footage combined. […] A tax on marijuana would be acceptable for recreational purposes, just like alcohol. But this is MEDICINE, which is not taxed in California.”[7]

Similar measures

Related measures

Approveda Long Beach Tax on Recreational Marijuana, Measure B (November 2010)

Recent marijuana measures

Recreational

Colorado:

Defeatedd Town of Palmer Lake Marijuana Legalization Referendum (April 2014)

Maine:

Michigan:

Wisconsin:

Approveda Dane County State Legalization of Marijuana Referendum (April 2014)

Medical

California:

Proposed ballot measures that were not on a ballot City of Napa Medical Marijuana Dispensary Referendum (November 2014)


All measures

See also

External links

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