City Mgm't Memo Estimates Previous LB Medpot Ordinance Cost LB Taxpayers Nearly $4 Mil From FY10 Thru FY15, Says City Doesn't Have Resources Available to Implement Potential New Medpot Ordinance Coming To Council Sept. 1
Council's Medical Marijuana Advisory Task Force Votes 7-6 To Recommend Council Not Lift Current Ban Until State Takes Further Action (On Implementation, Regs, Enforcement)
VIDEO: At Community Meeting, Councilwoman Price and Police Chief Luna Cite Budget Costs, PD Resource Impacts As Reasons Why Medpot Outlets Shoudn't Resume, Medical Marijuana Advocate Lejins Disagrees And Has Public Dialogue With Chief Luna
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(August 7, 2015) -- On September 1, a City Council majority will decide whether or not to proceed with enacting a second Long Beach medical marijuana ordinance (replacing LB's court-stricken first ordinance), effectively lifting LB's current ban on medpot outlets and letting the operations resume in some parts of Long Beach.
In a detailed itemized June memo, City Manager Pat West informed the Mayor and Council that LB's previous medpot ordinance cost LB taxpayers nearly $4 million from FY10 through FY15...and in a March memo statement that he reiterated in June, told the Council that the City doesn't have resources currently available to implement a potential new medpot ordinance.
LBREPORT.com obtained and provides both managerial memos below, which were publicly attached to a July agenda item of LB's Council-chosen Medical Marijuana Advisory Task Force. On August 5, the Task Force voted 7-6 to recommend that the Council not lift its current ban on medpot outlets until the state (Sacramento) takes further action (on medical marijuana implementation, regulations and enforcement.)
On July 25 (VIDEO below), Councilwoman Suzie Price alerted attendees to her monthly neighborhood residents meeting to the upcoming Sept. 1 Council medpot item and urged them to attend the meeting, noting that those in favor of re-opening the outlets will, as they traditionally have, show up in sizable numbers while others frequently don't do so.
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Councilwoman Price framed the issue in terms of city resources, not cannabis benefits. It's more about whether we as a city can absord this industry given the resources and the budget limitations that we currently have," she said. "Whatever your opinion is about marijuana, that's not the subject of the debate. The debate is, what is it going to require from the ciyt resource-wise to support this industry and to effectuate the industry...and are we as a city ready to take that on. That's the only question in my opinion. It could be the most brilliant, wonderful idea ever but if you can't take it on as an obligation, then it's not something that is reasonable for you..."
Long Beach Police Chief Robert Luna (the meeting's guest speaker) likewise voiced concern about lifting LB's current ban on medpot outlets. Asked about the impacts of medical marijuana dispensary operations on his Department, Chief Luna gave an explanatory response, and ended by saying: "At the end of the day, what Councilwoman Price said is true. It did negatively impact the resources of this Police Department" and added, "Did it have an impact on the Police Department? Yes it did: a negative one."
Long-time medical marijuana advocate Diana Lejins later commented on mike: "During the time that we actually had the dispensaries, crime kept going down. Now there's none but crime goes up, so you can't demonize that any more; now you're using Prop 47 as an excuse, to me, for the crime. Perhaps we need to take a different look at the other states, the other cities, the other places where it actually does work and reduces crime...Proper regulation, if you have it, can reduce crime..."
Chief Luna replied that while he respected Ms. Lejins' opinion but didn't agree with it. "At the end of the day, I want to make this city safer, and I'm going to try and take almost every angle I can to make that happen but in my years of experience, and I have a lot of 'em, narcotic use is directly tied into violent crime and property crime, and when I say narcotic use, I mean heroin, cocaine, methamphetamine, I'm not only talking about marijuana..."
Although other most OC and L.A. County cities banned medpot outlets (L.A. was an exception), former LB Councils devoted multiple agenda items -- spanning months stretching into years -- debating, amending and re-amending a LB medical marijuana regulatory ordinance. The Council's major advocates in this process were then-voting Councilman/Vice Mayor (soon to be Mayoral candidate and now Mayor) Robert Garcia and still-voting Vice Mayor Suja Lowenthal. The Council ultimately enacted an ordinance that didn't satisfy a number of medical marijuana proponents, spawned multiple lawsuits, triggered administrative issues and enforcement costs and didn't pass muster with an appellate Court. With LB's initial ordinance stricken and no enforceable ordinance in place, then-City Attorney Bob Shannon urged the Council to enact a ban on medical marijuana dispensaries to halt a proliferation of uncontrolled outlets until the CA Supreme Court ruled on other legally murky matters.
After the CA Supreme Court issued its ruling (clarifying some issues), a Council majority then moved to enact second LB medical marijuana regulatory ordinance and appointed an advisory Task Force. (Mayor Garcia said at the time he wouldn't vet the appointees, basically didn't care whom Councilmembers appointed.) A Council majority would ultimately have a final say.
The Council's move toward enacting a second medical marijuana ordinance was opposed by then-LBPD Chief (now County Sheriff) Jim McDonnell. His successor, LBPD Chief Robert Luna, has consistently stressed the costs involved and the need for additional LBPD resources if a Council majority really intends to proceed. In the interim, LB's ban on medpot outlets has remained in effect...although a new ordinance could advance allowing some outlets in some LB locations (ultimately lifting the citywide ban) depending on how a Council majority votes on September 1.
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In his June 3, 2015 memo to the Mayor and City Council, City Manager West wrote in pertinent part:
Since 2010, it is estimated that the City has expended more than $5 million in enforcing the prior regulatory ordinance and ban on medical marijuana. This has ranged from $360,000 to more than $1.5 million on an annual basis. The largest expenses were incurred in FY 113 and FY 14, following the enactment of the ban and increased enforcement efforts. The
table below provides a breakdown by department.
Total costs incurred FY10-FY15
Department
Total costs
Fire
$15,000
Police
$425,000
City Att'y
$3,000,000
City Prosecutor
$550,000
Financial Mgm't
$1,200,000
Development Services
$70,000
Total
$5,260,000
During this same time period, the City collected $1,275,000 in fines from administrative citations, out of a total of $3,320,000 issued.
The bottom line FY10-FY15: a net estimated cost to LB taxpayers of $3,985,000.
To view the full June 3, 2015 and March 24, 2015 memos (single document), see below.
Regarding fiscal impacts of a new draft ordinance, City Manager West's memo reiterated what he told Councilmembers in a March 24, 2015 memo (made public recently by 3rd dist. Councilwoman Suzie Price via a link to her monthly neighborhood e-newsletter):
The City does not currently have the resources to successfully implement and manage a medical marijuana ordinance. If an ordinance were adopted without additional resources, the City would experience the same type of problems encountered with the prior ordinance, perhaps to an even greater degree. Further, even if additional resources were found, there would need to be a minimum of a one year preparation period as staff would need to be hired through Civic Service. Additionally, the Police Department would need to decide which current enforcement operations would be reduced to provide a marijuana enforcement detail. Also, consultants would need to be interviewed and hired and appropriate policies and procedures would need to be developed to be fully prepared for the ordinance implementation.
The City Manager's June memo (after itemizing costs by several Departments) estimated annual costs for all Departments to implement the proposed new ordinance as currently drafted would be $3,905,000 plus one-time costs of $445,000...for total costs of $4.395,000.
Regarding anticipated revenue from a new ordinance, the City Manager's June memo indicates that the Financial Management Department hired a consultant who roughly projected estimated tax revenues as follows:
[City Manager June 3 memo text] The consultant estimated that 4% of the City's adult population would be medical m marijuana patients, based on rates ranging from 11.7% to 5% in other California cities. In addition, the
consultant estimated the demand and usage rates within the City based on ordinance
features, such as the local grow requirement and the inability for collectives to establish
discounted loyalty programs. The projectIons below include three different scenarios based
on low, medium, and high patient demand and retention. The consultant further estimated
how altering requirements of the ordinance, including tine local grow and residency
requirements, would affect revenues. Finally, the consultant assumed cultivation sites
would be of various sizes, and the projections below assume that there will be twelve small
facilities, four medium size facilities, and two large facilities.
Although these projections have been developed based on the best available evidence, the
nature of the medical marijuana industry makes accurate revenue forecasting difficult. The
projections below should be interpreted as rough estimates. If the City Council decides to
pass a regulatory ordinance, actual revenue may vary significantly from this estimate. The
revenues below assume a level of 6% on gross receipts from dispensaries and a $15 per
square foot business tax applied to cultivation facilities and also include the City's 1% share
of sales tax on all sales from dispensaries. Transfer from cultivation facilities to dispensary
facilities would not be taxable under the current ordinance, as both facilities would be
owned by the same company.
Projected Medical Marijuana Taxes and Sales Tax Revenue (Patient demand and retention ranges of low, medium and high)
Current ordinance
$850,000
$1,000,000
$1,250,000
Ordinance w/out local grow
$1,050,000
$1,300,000
$1,500,000
Ordinance w/out residency
$1,350,000
$1,800,000
$2,500,000
Ordinance w/out local grow and residency
$2,700,000
$3,150,000
$3,600,000
On Aug. 5, a Council-chosen Medical Marijuana Advisory Task Force (18 members, 2 per Council district) voted 7-6 to recommend that the Council not lift its current ban on medpot outlets until the state (Sacramento) takes further action (on medical marijuana implementation, regulations and enforcement.)
Now-pending Sacramento legislation, AB 266, would establish a local agency licensing and regulatory framework for medical marijuana, including state divisions in the Governor's office, State Board of Equalization, State Health Department and State Dept. of Food and Agriculture. In June, AB 266 cleared the Assembly on a 62-8 vote with local Assembly members O'Donnell and Rendon among those voting "yes"; it's now awaiting action in the State Senate Appropriations Committee that could stall or advance it to a vote on the Senate floor in the coming weeks.
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LB's Advisory Task Force also voted down an item 5-8 that would have recommended that the Council continue the City's current ban on medpot operations; in other words, it favored the Council lifting its current ban. (The Task Force also voted on over 20 other agendized items.)
The non-binding Task Force recommendation against continuing the City's current ban (favoring lifting LB's current ban) is not consistent with concerns variously voiced by 3rd dist. Councilwoman Suzie Price, LBPD Chief Robert Luna and -- in an internal memo released to the public by Councilwoman Price -- City Manager Pat West who told Councilmembers in a March 24, 2015 memo:
The City does not currently have the resources to successfully implement and manage a medical marijuana ordinance. If an ordinance were adopted without additional resources, the City would experience the same type of problems encountered with the prior ordinance, perhaps to an even greater degree. Further, even if additional resources were found, there would need to be a minimum of a one year preparation period as staff would need to be hired through Civic Service. Additionally, the Police Department would need to decide which current enforcement operations would be reduced to provide a marijuana enforcement detail. Also, consultants would need to be interviewed and hired and appropriate policies and procedures would need to be developed to be fully prepared for the ordinance implementation.
And in a section regarding tracking police and criminal activities associated with medical marijuana operations, the City Manager's March memo text states in pertinent part
It is widely known in the law enforcement profession that there is an absolute correlation between drug use and property crime. However, this correlation may not be demonstrable. For example, an auto burglary that occurs miles away from a dispensary, but that was committed by a person looking to get money to pay for marijuana (medical or otherwise) will not be tied to any particular dispensary.
Marijuana remains a federally designated [by Congress] Class 1 controlled drug...although the Obama administration's Justice Dept. has said it won't enforce some current federal laws if they're consistent with state medical marijuana provisions and meet other DOJ requirements.
A previous LB City Council voted years ago to add a section to the City's federal legislative agenda [policies the City is supposed to be supporting/advocating] to "Support legislation to classify medical marijuana as a recognized pharmaceutical medication dispensed through pharmacies." Such action would involve legislative action in Congress.
Congressman Alan Lowenthal (D, Long Beach-West OC) has supported some legislation supportive of medical marijuana dispensaries, but to date we are unaware of any House legislation authored or supported by him (or by Cong. Janice Hahn (D, LA Harbor/southbay) that would do what the City's legislative agenda seeks. For the record, a bill introduced in March 2015 in the U.S. Senate by Senator Cory Booker (D, NJ), joined by co-sponsors Sen. Rand Paul (R, KY) and Sen. Kirsten Gillibrand (D, NY) -- S 683 -- would downgrade marijuana from Schedule 1 to Schedule 2 of the Controlled Substances Act. Since then, 12 co-sponsors have been added to the three originating Senators including Sen. Barbara Boxer (D, CA.)
To our knowledge, there's been no action(s) or public advocacy of which we're aware at this point by the City of Long Beach to support this bill.
