Two years after Californians voted to legalize recreational cannabis, voters in half a dozen Riverside cities will decide Nov. 6 the details of what that means in their areas.
Prop. 64, which legalized recreational marijuana statewide, also gave cities and counties the power to regulate commercial cannabis within their borders.
So far, only about a third of California cities and counties permit any sort of marijuana business to set up shop, according to a database of local policies compiled by the Southern California News Group.
Elected officials in each jurisdiction can change that — as the Riverside County Board of Supervisors did Oct. 23, when it allowed dispensaries and other marijuana-related businesses in unincorporated parts of the county.
But voter approval is required if a city or county wants to tax marijuana businesses on top of the state tax of 15 percent and regular sales tax that averages 8 percent.
And citizens unsatisfied with their representatives’ actions can gather enough signatures to force an election on measures that, if passed, will become law regardless of city council members’ opinions.
Each of them needs a majority to pass. In cities with competing proposals, if both receive more than 50 percent, whichever measure receives more “yes” votes will become law Jan. 1.
In Palm Desert, where marijuana businesses are already allowed, Measure Q would allow annual taxes of up to $20 per square foot for cannabis cultivation, up to 3 percent of gross receipts for cannabis manufacturing and up to 15 percent of gross receipts for cannabis retail and delivery.
The Banning City Council put two different measures on the ballot that would allow cannabis in the Industrial Zoning District and tax it.
Measure N would authorize the city to enact an annual tax of between $15 and $25 per square foot for marijuana cultivation businesses and up to 10 percent of yearly receipts for manufacturing and testing businesses. The city estimates it will generate up to $1.2 million per year for the city.
Measure O would add a 10 percent yearly tax on the gross receipts of cannabis retail businesses in the city, which the council could raise as high as 15 percent in the future. The city estimates it will generate up to $1.5 million annually.
The money raised would be put in the general fund, where it can be used for most purposes, including fire, paramedic and police protection; road repairs; youth programs; and parks and recreation.
“Whether you agree with the legalization of cannabis or not,” council members Don M. Peterson and Arthur L. Welch write in the official ballot argument, “the city is now faced with a choice of either keeping retail sales of cannabis in Banning illegal, underground and tax free, or allowing some state and city-regulated stores to operate in the city generating needed tax revenue for the city.”
No one submitted a ballot argument against the measures.
Six months after voters shot down their proposal to allow marijuana businesses in parts of Jurupa Valley, the same advocates have another measure on the ballot. This time, there’s one key difference: It would mean tax money the city could spend on other city services.
The amount it could raise is disputed, with advocates saying it could be up to seven figures a year and opponents — including the entire City Council — saying they think the financial benefit would be far less.
Annual taxes would be set at $25 per square foot of space used for retail marijuana sales and $3 per square foot on other commercial cannabis activity.
The measure would allow one dispensary for every 15,000 people in the city. Given the current population, that would be up to seven dispensaries.
The ballot argument against the measure, signed by all five City Council members, says legalizing dispensaries would likely require the city to spend an extra $345,000 per year on staff and law enforcement.
Attorney Jason Ryan Thompson of Thompson Advocacy, which is pushing for passage of the cannabis measures in Jurupa Valley and Hemet, said allowing a few dispensaries would help the city shut down its existing dispensaries in two ways. The money from the measure could be used for staff and court fights, and authorized dispensaries could be allies, using their financial resources to shut down illegal competitors, he said.
The city has struggled to keep dispensaries closed, with eight active as recently as August. But a new legal procedure accelerated the city’s efforts, whittling it down to two active dispensaries as of Oct. 23, according to city spokeswoman Terri Rollings.
The City Council voted in March to allow dispensaries and other marijuana businesses.
And it decided Oct. 16 to keep the limit on marijuana dispensaries at eight — on top of eight cultivation centers, five manufacturing plants, two testing facilities, two distribution centers and two microbusinesses.
If Measure M passes Nov. 6, those sales could be taxed up to 8 percent per year, along with a maximum of $15 a year per square foot of growing space for commercial growers.
When the council placed the measure on the ballot, however, Chief Financial Officer Marshall Eyerman recommended that the tax be set well below the maximum — at 5 percent on sales and $7 per square feet for cultivators — to help new marijuana businesses get established.
The City Council voted in January to allow cannabis operations in two industrial zones: one in north Perris, and one in the southern part of the city, deciding at the same time to ask voters’ approval of an annual tax of up to 10 percent on cannabis distribution and manufacturing businesses.
No ballot arguments were filed for or against Measure G.
Voters will face two competing measures, either allowing marijuana almost immediately or not until 2020 at the earliest.
Thompson Advocacy, which also is handling the marijuana measure in Jurupa Valley, placed Measure Y on the ballot. The measure would allow an unlimited number of non-retail cannabis businesses in manufacturing zones as long as they’re not in residential zones, within 600 feet of schools or within 1,000 feet of three or more cannabis businesses. They would be taxed $10 per square foot.
To counter that measure, the City Council put Measure Z on the ballot, which bans marijuana businesses for at least two years.
“If (Measure Y) passed right now, the city doesn’t have the staffing to process applications and do all the work it entails,” said Mayor Michael Perciful. “We’d have to divert all our staffing efforts to do that.”
Thompson calls that disingenuous, saying the city would have time to beef up its staffing while businesses went through the state and local permitting process required under Measure Y.
Marijuana proposals at a glance
Measure N: Tax of between $15 and $25 per square foot for marijuana cultivation businesses and up to 10 percent on marijuana businesses.
Measure O: Tax of 10 to 15 percent on cannabis retail businesses in the city.
Measure L: Allow up to 7 dispensaries and tax them $25 per square foot of space used for retail marijuana sales and $3 per square foot on other commercial cannabis activity.
Measure M: Tax dispensaries up to 8 percent, along with a maximum of $15 per square foot of growing space for cannabis cultivation operators.
Measure Q: Allow annual taxes of up to $20 per square foot for cannabis cultivation, up to 3 percent of gross receipts for cannabis manufacturing and up to 15 percent of gross receipts for cannabis retail and delivery.
Measure G: Allow tax of up to 10 percent on cannabis distribution and manufacturing businesses.
Measure Y: Allow non-retail marijuana businesses and tax $10 per square foot.