California cities, counties OK pro-cannabis measures, paving way to scores of new licenses

Get in-depth analysis from MJBizCon’s Passholder Days about how 2020 local elections in California might impact the marijuana industry as well as financial insights into recent hurdles affecting MJ operators in the state. It’s all available to you on demand.

(This story has been updated to correct an initial statement that a ballot measure in Mount Shasta was an “industry loss.” The ballot measure that was defeated was actually anti-marijuana and would have constricted business opportunities in the city.)

Election Day not only ushered in marijuana legalization wins in five states, it also brought more than two dozen victories at the city and county levels in California, opening the door to new local markets for cannabis businesses up and down the state.

All told, there were at least 37 marijuana ballot questions in 35 cities and counties, according to tallies by California NORML and San Jose-based retailer Caliva.

Of those initiatives, 31 were approved by voters, potentially setting the stage for perhaps hundreds of new business opportunities.

Caliva’s director of government affairs, Hirsh Jain, said he stands by a prediction he made in August that together the measures could result in 100-150 new retail licenses as well as permits for cultivation, manufacturing and other plant-touching business types.

“When you see 30-35 cities taking action, that will significantly increase the number of licenses available,” Jain said Thursday during Marijuana Business Daily’s California-focused Passholder Days Forum.

“What we’ll see on average in these cities is four to five licenses being issued. Not all of these will be immediate – some of these are tax measures or advisory measures – but what we’ve seen is if they’re not retail ordinances themselves; they’re often followed by retail ordinances.”

Many of the measures didn’t explicitly authorize new cannabis companies but instead asked voters to initially approve a marijuana-related tax.

That’s typically a first step for local governments on the road to authorizing a new industry and is usually followed by a regulatory ordinance and then a business licensing process.

The reason the victories are so important is that, as of June, only 168 of California’s 540 cities and counties allowed for any type of legal MJ retail operations, and many of those don’t allow adult-use retail, only medical.

That means these 31 victories represent a growing embrace of the industry statewide.

Jain noted there are only about 700 storefront retailers across California, adding, “These cities themselves will account for an additional 20% of the total” number of shops. (That doesn’t include the number of delivery operators and microbusinesses.)

Following are municipalities that voted on marijuana ballot measures and the results:

Artesia

This Los Angeles suburb approved Measure Q, which authorizes a new 15% gross-receipts tax and a tax of $20 per square foot for marijuana cultivation.

The measure garnered 67% of the vote.

Banning

This desert town near Palm Springs approved Measure L, which:

  • Allows MJ distributors to set up shop.
  • Imposes a distribution tax of up to 10% on company gross receipts.

The town already permits retailers, cultivators, manufacturing and testing.

Measure L got 69% of the vote.

Benicia

This small town in the San Francisco Bay Area narrowly approved Measure D, a nonbinding advisory question on whether new cannabis retailers should be allowed.

It passed with 51% of the vote.

Calaveras County

The eastern Sierra county, home to hundreds of cannabis farmers, approved Measure G, a new cultivation tax structure.

The measure attracted 65% of the vote.

The tax system will be based on square foot of canopy, instead of the current tax that’s based on dry weight of marijuana.

Calabasas

In this small town northwest of Los Angeles, voters approved Measure C, a general cannabis business tax of up to 10% on gross receipts.

It’s essentially a starting point for the City Council to craft a cannabis industry ordinance in a town that currently prohibits marijuana businesses.

Measure C won 62% of the vote.

Commerce

Another L.A. suburb, this was one of the few marijuana defeats.

Voters shut down Measure SB, which would have greenlighted six marijuana company-development agreements struck between city officials and businesses.

Measure SB attracted only 43% of the vote.

Costa Mesa

This Orange County city will become the second to allow commercial cannabis shops after voters approved Measure Q, which allows the City Council to establish a retail marijuana tax of 4%-7%.

The city already allows manufacturing, testing and distribution.

The measure garnered 66% of the vote.

Encinitas

Voters in this beach town north of San Diego chose to allow commercial marijuana cultivation, manufacturing, distribution and up to four retail shops by approving Measure H.

The city currently prohibits all cannabis businesses.

Measure H passed with 51% of the vote.

Fairfield

In this town northeast of the Bay Area, voters approved Measure C.

It will establish a general cannabis business tax of up to $10 per square foot of canopy for cultivators, 6% of gross receipts for retailers and 4% of gross receipts for all other license types.

Measure C got 66% of the vote.

Grass Valley

Voters in this Sierra mountain town approved Measure N, which will establish an 8% gross-receipts tax for retailers, a 6% gross-receipts tax for other businesses and a cultivation tax of up to $7 per square foot.

It won 62% of the vote.

Hawthorne

Another L.A. suburb, voters approved Measure CC, a 5% gross receipts general cannabis business tax.

The city currently prohibits all marijuana businesses.

The measure attracted 62% of the vote.

Jurupa Valley

In another rare marijuana defeat, voters shot down Measure U, which would have expanded the number of retailers allowed in the city from seven to nine and increased taxes on cannabis businesses.

It received 48% of the vote.

King City

Voters in this agricultural town in Monterey County approved Measure P, which allows the City Council to establish a gross-receipts tax on marijuana products of up to 5%, and a separate gross-receipts tax of up to 2% on MJ products for distribution of products from outside the city.

It passed with 71% of the vote.

Laguna Woods

Another Orange County city, voters narrowly approved Measure V, an advisory question that asked whether the city should allow marijuana retailers.

All cannabis businesses are currently prohibited.

The measure got 51% of the vote.

La Habra

A third Orange County city with a marijuana ballot question, its voters approved Measure W allowing four cannabis-delivery businesses and a tax of up to 6% on gross receipts.

The city already permits distributors and testing labs.

It got 68% of the vote.

Lemon Grove

Voters in this San Diego suburb approved Measure J, a general cannabis business tax of up to 8% of gross receipts.

The city currently allows only medical marijuana dispensaries, so the yes vote likely will open the door to recreational businesses.

Measure J received 73% of the vote.

Madera

Voters in this Central Valley town approved Measure R, which will establish a general cannabis business tax of up to:

  • $10 per square foot of canopy for cultivators.
  • 6% of gross receipts for retailers.
  • 4% of gross receipts for all other business types.

The city currently prohibits marijuana businesses.

It won 67% of the vote.

Marina

This Monterey County town easily approved Measure Z, which will enact new zoning restrictions for marijuana businesses and maintain a 5% gross-receipts tax and a cap of three recreational marijuana retailers and three MMJ dispensaries.

It got 72% of the vote.

Marysville

Voters in this town north of Sacramento approved Measure N, a general marijuana and hemp business tax of up to:

  • $10 per square foot of canopy for cultivators.
  • 6% of gross receipts for retailers.
  • 4% gross receipts for all other business types.

The measure attracted 63% of the vote.

Mount Shasta

In an industry win, voters rejected Measure L, which would have restricted business development in the city by prohibiting new licenses from being issued.

It got 40% of the vote.

Oceanside

Voters in this San Diego suburb approved Measure M, which authorizes a general cannabis business tax of up to 6% of gross receipts for retailers, manufacturers and distributors and up to 3.5% for cultivators.

It won 63% of the vote.

Ojai

Voters in this city near Santa Barbara approved Measure G, a general cannabis business tax that will begin at 3% of gross receipts for all businesses.

However, city officials could increase that levy to as much as 10%.

It won with 70% of the vote.

Pomona

Voters in this L.A. suburb chose Measure PO but shot down the competing Measure PM.

Measure PO authorizes up to eight new marijuana businesses with a zoning restriction that they can’t be within 1,000 feet of schools, day-care centers or youth centers. Measure PM would have set the same zoning restrictions at 600 feet.

Measure PO won 59% of the vote; Measure PM got just under 50%.

Porterville

Voters in this Central Valley town approved Measure R, a general cannabis business tax of up to $25 per square foot of canopy for cultivators or 10% of gross receipts.

It won 59% of the vote.

San Bruno

A suburb south of San Francisco, voters supported Measure S, a general cannabis business tax of up to 10% of gross receipts.

The city currently prohibits all marijuana businesses.

It won 64% of the vote.

San Joaquin County

This Central Valley county, which includes Stockton, approved Measure X, a general cannabis business tax of 3.5%-8% of gross receipts for all business types as well as an annual $2-per-square-foot fee for growers.

It drew 66% of the vote.

Solana Beach

Voters in this San Diego suburb defeated Measure S, which would have allowed at least two storefront marijuana retailers along with indoor cultivation and delivery.

The city currently prohibits all cannabis businesses.

The measure got 37% of the vote.

Sonoma

The city’s voters approved Measure X but rejected Measure Y.

Measure X, backed by the City Council, will establish a general cannabis business tax of up to 4% for retailers, manufacturers and indoor growers; 3% for distributors; 2.5% for outdoor cultivators; and 2% for testing labs.

Measure Y, supported by a grassroots coalition of marijuana activists, would have allowed broader personal cultivation rights and a more wide-open business landscape.

Measure X won 79% of the vote; Measure Y got 43%.

Tracy

This Central Valley town approved Measure W, which establishes a general cannabis business tax, including 6% of gross receipts for retailers, 4% for other business types and $12 per square foot for cultivators.

It won 66% of the vote.

Trinity County

Voters in one of the three counties that comprise the famed Emerald Triangle approved Measure G, a general marijuana cultivation tax:

  • For cannabis flower, the tax will be $15.44 per pound.
  • For marijuana leaves, it will be $4.59 per pound.
  • For fresh cannabis plant material, the tax will be $2.16 per pound.

The measure also establishes an annual 2.5% gross-receipts tax for retailers, though the county does not yet permit retailers.

Measure G garnered 72% of the vote.

Vacaville

This town, halfway between Sacramento and San Francisco, approved Measure V, a general cannabis business tax of 6% of gross receipts for retailers, 3% for distributors, 2% for testing labs and $10 per square foot for cultivators.

The city currently prohibits all marijuana businesses.

It won 65% of the vote.

Ventura

Voters in this town, just north of L.A., adopted Measure I, a general cannabis business tax of up to $10 per square foot of canopy for cultivators, 8% gross receipts for retailers and 4% for all other business types.

The city currently prohibits all cannabis businesses.

The measure got 73% of the vote.

Ventura County

Located between L.A. and Santa Barbara counties, this county approved Measure O, which will allow commercial cultivation, processing, manufacturing and distribution – but not retail sales – in unincorporated areas.

The county currently prohibits all marijuana businesses.

Measure O won 57% of the vote.

Weed

Voters in this small Northern California town approved Measure B, to establish marijuana business regulations.

It garnered 60% of the vote.

Yountville

In another marijuana loss, this wine country town defeated Measure T, which would have authorized:

  • A single retail operation in the city.
  • A local cannabis tax of 3% of gross receipts.

The city currently prohibits all cannabis businesses.

It received 33% of the vote.

John Schroyer can be reached at [email protected]

2 comments on “California cities, counties OK pro-cannabis measures, paving way to scores of new licenses
  1. Julio Flores on

    I wonder what city or county will be resident friendly by not charging it’s local businesses those outrages fees and taxes. At the moment only big businesses can afford to be legit in the state of California. For example, in my city of San Jacinto, Ca., it cost $14,000, just for a deposit with your application, non refundable, of course.

    Reply
  2. Pat on

    That’s right Julio. The vast majority of these licenses will be granted on a non-evidenced based rationale ( a mountain of b.s. barriers ), and be based upon political and money generating considerations by all of these municipalities. This law was written by the special interests, including local/state govt. That’s it. The rest of the populace has been targeted to be the cow, with no say in the matter other than: You can grow your 6 plants.. Oh! But, you can’t have it tested/sell any of it ( You could have under a slightly modified version of 215/420. But, then “they” can’t make the money they want… ). Or! You have to buy it from us: The reconstituted cartel composed of the original cartels facilitated and blessed by state/local govt. And there you have it. Legitimized in their eyes only. How’s everyone else reacting to it? Been reacting to this kind of corruption? Just look around all of the state’s prime growing regions. Do ANY of them have licenses? How may of these operations exist outside of the current licensing scheme? Probably like comparing the size of the earth to the sun. The sun representing all those natural sun loving cultivators. And no one ( journalist ) gives this part of the equation the attention that it requires. Oh well! The state is out of its f’n mind. How much money is it going to cost the taxpayer to put out a fire that metaphorically is as large and burns as bright and as hot our sun? Hey, it’s all ok for those agencies caught up in the racket; inc. law enforcement. They absolutely do not care where their money comes from. Just like knowingly receiving a bag of stolen goods, and looking the other way. And then calling it gainful employment. Special interest’s win/citizen loses. Citizen loses in the most obscene manner. And here we are around this issue on the cusp of 2021.

    Reply

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