Southern California

Pomona delays ballot measure to allow commercial marijuana — but is already planning for tax revenues

Pomona city officials have asked for a more detailed analysis of an end to the city’s ban on marijuana activity, meaning that a citizen-backed ballot measure to throw out the ban won’t be on the November ballot — even as the city council debates how to spend potential revenues from a potential marijuana tax.

In a 6-1 vote late Monday night, the council agreed to place a tax measure on the Nov. 6 ballot which proposes to generate between $400,000 to $500,000 annually. The measure would establish a tax rate of up to 6 percent of gross receipts for all commercial cannabis/marijuana activities and $10 per square foot for cultivation.

“If it comes, we have to be in a position to tax this,” Mayor Tim Sandoval said. “If the council makes the decision to allow it in the city, and we don’t have a tax measure in place, then it would have to go to a special election and there could be tremendous costs associated with that. In my view, this is being proactive.”

At the same time, city leaders have asked staff to analyze the full impacts of a residents-backed initiative that aims to overthrow the city’s ban on marijuana activity, a move that prevents it from making it on the Nov. 6 ballot.

How the city ultimately would spend potential cannabis-tax revenues sparked a nearly hourlong debate at Monday night’s meeting.

Councilman Robert Torres, the sole dissenter, said he wanted to earmark all the money for enforcement. Torres noted that Pomona has spent $320,000 over the course of three years on enforcement and shuttering illegal dispensaries.

Councilwoman Ginna Escobar agreed: “We’ve discussed this for at least two months’ worth of meetings. There’s no money that goes back into the enforcement aspect. For (Torres and me), that’s a big issue.”

To appease their colleagues, Councilwoman Cristina Carrizosa and Sandoval suggested the language in the sales tax indicate the revenues be spent on law enforcement.

But that also isn’t sufficient to cover the costs, City Manager Linda Lowry said, because the bulk of the $320,000 was spent on legal services.

“We have the opportunity to tax a business that may potentially come to Pomona. It is the City Council which will decide how to spend those city dollars, as we do with any city budget,” Sandoval said. “In fact, there may be different needs. How do we know exactly where the need is going to be if the council decides to allow cannabis in the city? If we don’t have the latitude to make those changes then it limits us on what we can do.”

The citizen-backed measure proposes to amend Pomona’s zoning code to allow commercial cannabis use by creating two zones: a self-described “safety access cannabis” zone in the middle of downtown and pockets of industrial areas throughout the city. The city banned commercial marijuana operations in late 2017.

The council had several options when it discussed the measure at Monday’s meeting: It could have chosen to place the initiative on the Nov. 6 ballot directly or adopt it as an ordinance, without alterations, making it effective immediately or within 10 days. By requesting the report, the council will miss the Aug. 10 deadline to place the proposed initiative on the Nov. 6 ballot.

Attorney Roger Jon Diamond, who is representing Jacqueline Dilley, one of two Pomona residents pushing the measure, threatened to take legal action.

By requesting the report, Diamond told city leaders, “You’re basically saying you want to stall the matter and delay it. That’s just going to cost money.”

Diamond has experience to back up that claim. A yearslong battle with Upland resulted with that city paying him $180,000 in legal fees after the council delayed a citizen-backed initiative until a general election. Diamond, representing the California Cannabis Coalition, argued the measure should have been placed on a sooner, special election.

The California Supreme Court agreed in an August 2017 ruling. Diamond was allowed to recover his fees.

Pomona, according to Diamond, already had a staff report prepared about the initiative when the council discussed it during the June 4 meeting.

“You don’t need another report. It just costs the taxpayers a lot money,” Diamond said. “You’ve already analyzed the issue. The only question here is will it appear on the Nov. 6 or a later ballot?”

The initiative would prohibit cannabis businesses within 600 feet of a school, day care, or youth center as defined by state law.

The so-called safe access zone, which would be two blocks north of the Civic Center, would allow storefront, retail, microbusiness and distribution uses in the areas bound by Monterey Avenue, Third Street, Locust Avenue and Parcels Street. That leaves 100 parcels within this vote eligible to host cannabis businesses.

The industrial zone would allow cannabis manufacturing, cultivation, testing laboratory and distribution on parcels zoned M-2 (for manufacturing) scattered around the city, including lots east of Reservoir Street’s rail tracks and lots between Pomona Boulevard and Mt. Vernon Avenue between Humane Way and Temple Avenue.

While 30-plus people filled out cards indicating they wanted to speak, more than half said they merely wanted their names on the record, showing support for the initiative.

Several supporters, including Brandon Roman, wore a gray T-shirts with a green Angeles Emeralds logo. The organization advocates for responsible cannabis policy in Los Angeles County.

“A regulated market would make the city safer, create good jobs and provide additional revenues for public programs in our community,” Roman said. “Funds from cannabis businesses could go toward unfunded schools and could fix infrastructure problems, like on Hamilton Road.”

Arts Colony developer Ed Tessier told the council he was OK with a fiscal impact study of the proposed ballot measure. While he supports legalization, he believes the public was misled during the signature-gathering process.

“People were not informed about the 100 parcels being targeted for retail authorization. They were not consulted for this act. There was no analysis about the impact of the downtown revitalization process,” he said.

Tessier believes this particular ballot measure strips the city of the ability to properly regulate uses, he said.

Pomona resident Roberta Pearlman said she would prefer to see the ballot measure restrict cannabis operations 1,000 feet away from schools rather than the 600-foot buffer zone.

The full report is expected to be reviewed at the next City Council meeting, Sept. 10.