Recommendation to request the State Legislation Committee to review and consider supporting SB 1281 and AB 2792; and consider adding an item to the State Legislative Agenda generally advocating for lowering the state cannabis cultivation tax.
Communication from Councilwoman Allen, Councilmember Younger Vice Mayor Richardson recommendation to request the State Legislation Committee to review and consider supporting SB. 1281. And AB 2792 and consider adding an item to the state legislative agenda advocating for lowering the state cannabis cultivation tax. Thank you. I'm going to turn to Councilman Allen to be. Thank you, Mayor. I want to start by recognizing council member your Ranger and Vice Mayor Richardson for their support on this item. Our state cannabis laws were designed to regulate cannabis, protect public health, and help sells out of the illegal market. But I mentioned earlier tonight the cannabis industry is over, taxed and burdened by various regulations. There is no industry taxed as much as the cannabis industry. While this certainly benefits towards the state and local budgets, it's just flat out unfair to the industry. And this structure is also a factor and how strong the illicit cannabis market is throughout the state as this existing state laws imposes a weight based tax, the cultivation tax and a 15% excise tax on cannabis operators. Local taxes are then imposed in addition to these state taxes, the cultivation tax of $161 per pound. This is a flat tax, meaning that the impact of this tax will vary depending on the market price for per pound of the cannabis. If the market price of cannabis is low, the tax is a greater burden on legal cannabis operators, often leading businesses to cut jobs, cut, lost or lose their doors altogether. Or like the lady who just spoke. You can add janitors if you need them. The structure makes it very difficult for legal cannabis businesses to be successful and earn a profit. This is a result. And displace workers. Close cannabis entities to seek other, more low cost avenues for business, such as the illicit market, which does not face the operating and regulatory cost of the legal market. If legal cannabis businesses struggle to operate, the illicit market will continue to grow and be even more persuasive. The state is working on cannabis tax reform and it's important that the city demonstrate strong support for its current and future legislative items. Both SB 1281 and AB two 2792 address these tax issues. These bills will help the legal cannabis industry market compete against the the illicit cannabis markets, which in turn will help create more jobs, increase government revenues and community benefits from local business owners. So I ask the State Legislation Committee support these bills and add an item advocating for lower state cannabis cultivation tax on the committee agenda. Thank you very much. Thank you. Can I get the motion in the second, please? On record. The second, please. There you go. Counselor, we want to thank you. Councilmember Allen, for bringing this forward. More than happy support. I think that when we look at our legislative agenda for this coming year, this is a very important item that should be included in there. And I think we should have some real robust discussion on this because obviously, as we've discussed tonight, the cannabis industry is is being I'm not going to say attacked, but it is under scrutiny and it needs in support. It needs help. And I think one of the most progressive things that we can do in the city council is to support that in support of our cannabis industry partners here. So more than happy to agenda, is it we will discuss it and I'm sure that we will support it and send it forward to our legislation committee as well and then to the City Council for full support later on in the in the process. So thank you for bringing this forward. Happy to support. Thank you. Councilman Austin. Thank you, Councilmember Allen and Your Honor, for bringing this forward. I certainly want to support this item before us this evening. And I've already written letters of support on both SB 1281 and maybe to 279 to to the sponsoring legislators in Sacramento and noting that two of the three state legislative committee members are agendas in this particular item. I just want to ask from a from a form kind of perspective, what's going to be the process? As I understand this, this will go back to the state merge committee where we. Will. Possibly get a report from staff and support this. Because I just heard our chair say that he he wants to support this. My question is, can't we just cut the process and and support it tonight as a as a body and women that. So you do have some options. I think you with the consent of the chair of the state large committee, you can actually amend that and bring it. If there's support of doing this, we are going to be bringing the state legislature agenda, I think, next week. It just got heard in committee. And so, you know, this could be then added in as a as a supplemental to that and bring back to your to your consideration or if you really wanted to delve into it and get additional testimony and information, you could do that in committee and then bring it back. Okay. Like I said, I'm I'm inclined to support it tonight. But, you know, if the maker of the motion and the senator one to continue with this process, I'm I'm okay with that to support it as is. Yeah, I'm absolutely in favor of getting this done. So if you if the colleagues are amenable to supporting this tonight, I'm all for it. It's a matter of the advice of our attorney. But we can do it tonight. Let's do it. Let's get it. Let's get out of the way. So. So, if I understand, the amendment to the motion would be to add it to the supplemental state led agenda that will come back in a week to the council. There you go. Stupid teacher. Okay. Yeah. I mean, I think I think the the the from the perspective would be, I think adding it to the state let's committees for approval next week which I think is set to be approved next week in skipping the committee process, I think meets Councilmember Austin's needs as well as the councilwoman. I'm sure it comes from for. Is that you're amenable to that. Okay, Councilwoman. Okay. So then the adjusted motion is then to just fold the support into the seat ledge. Official agenda, which it needs to be anyways. And that way our, you know, our lobbying team and our, our, our folks and also get engaged on the city side to push this issue in Sacramento. So that is the motion. Vice Mayor Richardson Giovanni, there's no comment. I like where this is headed. I'm support. Thank you. Then with that, please cast your votes. We're actually I'm sorry about that. We actually have public comment on this one as well. Madam Quirk. Well, Elliot Lewis, Jose Hernandez, Daniel Lopez, Jordan, Wilbert and Edgar Cruz. Please line up at the podium. Elliot, Jose, Danielle, Jordan and Edgar. I think some of them are saying that they don't want to speak up. Okay. So I think we're I think we're good because anyone comes forward, we're going to go out and take a is there someone that's speaking or please come forward. Good evening, counsel and staff. As you may know, my name is Edgar Cruz, Social Security recipient, and I am the founder of the Cannabis Concert Complex of Long Beach, where we focus on social equity and community redevelopment in our jurisdiction. I'd like to start off by thanking counsel, cannabis oversight and economic development for their hard work and support. In regards to Agenda Item 17, 28 and 33 and October, the Office of Cannabis Oversight presented a proposed map that would amend Green Zone for dispensaries but made no mention of the other license. Types are in desperate need of relief. Even after the state has revived their location requirements, the city has done little to catch up. Property owners and realtors are well aware of what this means and for them to be valued, their property is 2 to 3 times higher than those not in the Green Zone. While it is unknown how the market will respond to this expansion of the buffers, the initial response will, we hope, will level devise and force them to offer more competitive pricing. Another issue facing the cannabis industry is federal legalization, with the banking industry threatening property owners to foreclose a property if leased to any cannabis businesses. This again limits competition and the valuable properties, so any guidance you can offer would be appreciated. A solution could be to promote property ownership. They are also has stated that they currently do not support ownership through the grant program, instead encouraging leases that increase the likelihood that the lease would enter into a predatory or financial unstable agreement . Property ownership will not only provide location for the business, but a real asset that may outlast the business. What does it mean to truly support equity businesses? If we look at other cities that have done that have done to bring parity to the marketplace, the answer is really simple Give equity applicants exclusive access to a licensing process . Equity businesses are not essential because anyone can do it, and if anybody can do it, they're going to do it without us. From the property owner to the investor, all seeking ways to control or cut out the equity owner. But if equity is the only point of entry, equity is vital to the industry. The city has taken many steps to support equity businesses, with the exception of building equity businesses to support equity businesses. The collective power of a group of like minded business owners will ensure the success of all incubating, training, learning as a whole towards the mutual success of each with the collective buying power and resources to have a fair shot in an industry that is locking them out, facing regulations that are more punitive than any other similar business or industry. At the October Council meeting, it was made clear that new licenses, delivery dispensaries, shared manufacturing would be exclusive to equity applicants . And I would also encourage you to go further and expand licensing to include events and onsite consumption. Denver recently approved the first social equity onsite consumption loan, and I hope that you take cue from 2015 when Long Beach went to complete with the other cities at the forefront of this new industry. I really thank you guys for your time in industry and I know it's been a frustrating and long process in regards to creating the social equity program and making it more substantial. And I think it takes all of us, we are learning as we are going and is very grateful for you guys to have this process. A lot of people that I know don't have the opportunity to speak to their council members. Mr. Speaker, murder, economic development. So for us to have that opportunity is very grateful. So thank you, guys. Thank you very much. That concludes public comment. We have a motion in a second on the floor, please. Members, cast your vote. Motion is carried. Great. Thank you very much. We are we're going to continue the regular agenda. I know the cannabis items are over. If I can ask everyone to exit as as quiet as possible so we can continue the meeting. That would be great.