New Cannabis Policy Initiatives

• Project Status Updates
• Project Timelines
• Project Feedback & Engagement
• And more!

Many of these initiative are focused on increasing equity in the cannabis industry in Long Beach.

Delivery-Only Businesses	Cannabis Special Events
Retail businesses that sell cannabis goods to customers exclusively through delivery	Temporary cannabis events are multi-day events where people can sell and consume cannabis

Completed Projects

• Tax Relief Plan

  Using a two-tiered approach, businesses may be eligible for a combined 4 percent in tax relief—while maintaining a two percent minimum tax rate—upon meeting a set of good standing requirements and eligibility criteria. The proposed Tax Relief Program requirements and criteria aim to address areas of community benefits, local hiring, living wages, and fair labor standards.                                                                                       

  Tax Relief Plan Timeline 

  March 15, 2022 - City Council directed City staff to investigate the feasibility of repealing the tax for cannabis cultivation (medical and adult-use) in Long Beach, including fiscal and workforce impacts.

  May 10, 2022 - City Council directed City staff to prepare a report exploring the feasibility of reducing the City's adult use cannabis retail tax rate to align with the medical cannabis retail tax rate.

  August 17, 2022 - Feasibility study findings were released to City Council in one comprehensive report with a staff recommendation and alternative option.

  August 18, 2022 - City staff presented feasibility study findings to Economic Development and Finance Committee.

  August 23, 2022 - City staff presented feasibility study findings to Budget Oversight Committee.

  September 6, 2022 - City Council passed the following motion as part of the FY 23 budget adoption process: 

  • Motion to reduce the adult-use and medical cannabis cultivation and retail taxes for equity businesses, and direct City Manager to come back to City Council with a report on how a potential rebate program would work where any revenues above $12 million would be rebated back to businesses who paid taxes with a prioritization on rebating back to cultivation businesses, along with an updated projection report to City Council on the status of cannabis revenues. This action will promote equity goals while not resulting in revenue loss from the proposed budget.

  December 16, 2022 - Staff provided an update to City Council as part of the summary of the FY 23 Budget Adoption Actions on September 6, 2022.

  April 18, 2023 - Item 30, City Council approved the following recommendation sponsored by Councilmember Joni-Ricks-Oddie, Vice Mayor Cindy Allen, and Councilmember Suely Saro:

  • • Request the City Manager to work with the Office of Cannabis Oversight to
      develop a tax relief plan to help stimulate the growth of local cannabis retail
      establishments with structured incentives that promote community benefits,
      local hiring, livable wages, and fair labor standards, and return to the City
      Council as part of the FY 24 budget process.

  April 18, 2023 - Item 31, City Council approved the following recommendation:

  • • Request the City Attorney to prepare an Ordinance to amend the Long Beach Municipal Code (LBMC) to reduce the adult-use and medical cannabis cultivation and retail taxes for equity businesses by half the rate set in Section 3.80.261 of the LBMC.

  August 8, 2023 - Item 39, Recommendation to declare an Ordinance amending the Long Beach Municipal Code by amending section 3.80.261 to reduce the adult-use and medical cannabiscultivation and retail taxes for equity businesses, read for the first time and laid overto the next regular meeting of the City Council for final reading.

  November 29, 2023 - The City Manager released a memorandum on the proposed cannabis tax relief plan.

  January 23, 2024 - City Council approved Cannabis Tax Relief Plan.

  April 9, 2024 - Item 28, Adopted Pilot Tax Credit Program:

  Good Standing Requirements
  Be compliant with the regulations set by Section 3.80.261 of the LBMC and cannot have outstanding taxes and fees for any cannabis license associated with the business, except for businesses on a *Special Circumstances Payment Plan.
  Be complaint with the regulations set in Chapter 5.90 and Chapter 5.92 of the LBMC and cannot have pending enforcement action(s) for any cannabis license associated with the business
  Be compliant with the regulations set by the Department of Cannabis Control, including the issuance of an active provisional or annual state license
  Eligibility Criteria
  Local Hiring	40% of employees reside within Long Beach
  Workforce Quality of Life	Employees receive wages set at 110% (or above) of the state minimum wage 80% of employees receive wages set at 115% (or above) of the state minimum wage
  Training	Proof of participation in a High Road Training Partnership
  Equity Business Support	At least one (1) of the following: -            15% of shelf space reserved for cannabis goods cultivated, manufactured, or delivered by an equity business -             Provide 50 hours of incubation support per year to equity businesses
  *Businesses on a Special Circumstances Payment Plan of up to 12 months become eligible for the Pilot Tax Credit Program after 6 months of proven payments and all quarterly reports submitted. This would allow businesses with Special Circumstances to participate after 6 months upon meeting the other remaining good standing requirements and eligibility criteria with demonstrated payment, but not be advantaged over other cannabis businesses who have paid within the current 6-month plan.

  • Recommendation: Recommendation to approve ordinance amendment to Section 3.80.261 of the Long Beach Municipal Code (LBMC) to reduce the cannabis cultivation tax rate and adult-use retail tax rate and add provisions for the Pilot Tax Credit Program, read for the first time and laid over to the next regular meeting of the City Council for final reading.
  • Motion: Approve ordinance amendment to Section 3.80.261 of the Long Beach Municipal Code (LBMC) to reduce the cannabis cultivation tax rate and adult-use retail tax rate and add provisions for the Pilot Tax Credit Program, declare ordinance read the first time and laid over to the next regular meeting of the City Council for final reading; and adopt the Proposed Pilot Tax Credit Program chart attached to the Council letter with the following edits and additions:
  1. 1. Strike the requirement to be compliant with California Department of Tax and Fee Administration regulations to be considered to be in “good standing”
     2. Add the two requirements set forth below to be considered to be in “good standing”:         
     • • Create a Special Circumstances Payment Plan that allows up to 12 months to pay outstanding taxes to be considered in compliance with the Long Beach Municipal Code.  This would create additional time for payment for those businesses that have special circumstances and need additional time to pay.  Those businesses would be considered in compliance with the municipal code (therefore not at risk of suspension for nonpayment)  if they pay every month. However, they would be subject to business license suspension if they default on the payment plan. In addition, they also have to have all of their quarterly reports submitted.
       • Require that businesses become current on their payments for local taxes before they are eligible for the Cannabis Tax Credit Program, with the exception that any business on the Special Circumstances Payment Plan of up to 12 months become eligible after 6 months of proven payments and all quarterly reports submitted.  This would allow businesses with Special Circumstances to participate after 6 months after they meet the other remaining eligibility requirements with demonstrated payment, but not be advantaged over other Cannabis businesses who have paid within the current 6 month time plan; and
     3. Require a thorough review of the tax relief program, including the impacts of these eligibility standards on program enrollment and participation, no later than six months from when the program officially begins.  This review should assess compliance and business application levels, economic impacts, and any unforeseen consequences, and the City Council will be able to propose any necessary amendments to the eligibility standards or the program design based on the review findings.

  June 20, 2024 - Tax Credit Program Launched.  The 2024 Cannabis Business Tax Credit Application can be found here.

• Shared-Use Manufacturing

  Shared-use manufacturing allows multiple licensed manufacturers to produce cannabis products from a single facility. The following operations can be conducted at a shared use facility: 

  - Infusions (ex: making cookies, cakes, gummies, etc.)

  - Packaging & Labeling

  - Extractions using butter or food grade oils  
  
  The Long Beach City Council passed the Cannabis Shared-Use Manufacturing Business Ordinance at its meeting on July 13th, 2021. The ordinance took effect on August 15, 2021, thirty-one (31) days after it was signed into law by Mayor Robert Garcia.

  Next Steps

  The City is now accepting applications from licensed cannabis manufacturers interested in becoming a shared use manufacturing facility, otherwise known as a ‘Principal Licensee’. For more information, please visit the Cannabis Shared-Use Manufacturing License website.

  State Laws & Regulations

  At the State level, cannabis manufacturing operations are regulated by the California Department of Public Health. 
  
  Shared-Use Manufacturing Regulations
  Shared Use Manufacturing Fact Sheet

• Equity Dispensaries

  To promote business ownership opportunities for equity applicants, the City Council approved an ordinance amendment on May 10, 2022, to allow eight (8) equity dispensaries in the City. 

  This would bring the total number of dispensaries in the city to 40. 

  Timeline
  

  •  March 16, 2021 – The City Council requested the City Manager to conduct a feasibility analysis on the addition of up to 8 new dispensary licenses exclusively for Equity Applicants in the Program.

  • September 2021 - Staff drafted the Cannabis Equity Retail Storefront (Dispensary) Feasibility Analysis. 

  • October 1, 2021 – The City Manager released a memorandum on the Equity Dispensary Feasibility Analysis which included a summary of community feedback and recommendations to expand the “Green Zone”, place a cap on licenses, and utilize a hybrid application process (merit-based review plus lottery).

  • October 12, 2021 – The Office of Cannabis Oversight presented the Equity Dispensary feasibility study to the City Council, who approved a motion directing staff to conduct a feasibility analysis on a 1,500-foot buffer for dispensaries, and prepare an ordinance to allow up to 8 new dispensary licenses be issued to equity applicants, expand the Green Zone for dispensaries, and focus a merit-based application process (no lottery).

  • April 27, 2022 – The City Manager released a memorandum providing an update on 1) the feasibility analysis for a 1,500-foot buffer for dispensaries, 2) grant funding for Cannabis City Staff, and 3) community engagement on the Equity Dispensary RFP criteria.

  • May 10, 2022 – The Office of Cannabis Oversight presented the Equity Dispensary Ordinance and Resolution to the City Council for adoption to authorize the City Manager to establish a Request for Proposals (RFP) for dispensary licenses for the Program. The City Council passed a motion requesting staff to return toto the following City Council meeting, with changes to the ordinance to 1) only allow Equity Applicants verified on or before Tuesday, May 10, 2022 to participate in the RFP, 2) require Equity Applicants to provide a 10-year business plan, 3) restrict these licenses from being sold to a non-equity partner within the first ten (10) years of the Equity Applicant(s) holding the license, 4) give preference to Equity Applicants who have participated in the City’s prior cannabis dispensary lottery processes, and 5) review the RFP proposals without the names of the Equity Applicants.

  • May 17, 2022 – The Office of Cannabis Oversight presented the Equity Dispensary Ordinance and Resolution with the amendments to the Equity Business ownership requirements and Equity Dispensary RFP Guidelines, as requested by the City Council. The City Council approved the recommendation to amend the proposed Equity Business ownership requirements to prohibit Equity Businesses from transferring more than 51 percent ownership interest to a non-equity individual for ten years from the date the Equity Business submits a cannabis business license application to the City, 2) amend the Equity Dispensary RFP Guidelines to only allow equity applicants who were verified on or before May 10, 2022, to submit a proposal. Equity applicants who received their verification after May 10, 2022, are not eligible to participate in the RFP process, and 3) amend the Equity Dispensary RFP Guidelines to add a provision to give priority to equity applicants who were selected in a previous lottery on September 10, 2010 and/or September 28, 2017. In order to be eligible to receive additional points in the RFP process, an Equity Applicant must have received their verification letter on or before May 10, 2022, and be listed on the original business license application(s) as an owner/managing member.

  • May 24, 2022 – Upon staff’s recommendation, the City Council adopted Equity Dispensary Ordinance and Resolution.

  • August 24, 2022 – The Cannabis Equity Dispensary Request for Proposals (RFP) was released through the City's procurement portal Long Beach Buys. 

  • September 7, 2022 – The Cannabis Map was updated to include the expanded buffer zones for dispensaries. The former Proposed Cannabis Map for Equity Dispensaries was strictly for educational purposes and is no longer available. 

  • June 1, 2023 -  The Purchasing Division has posted the Notice of Intent to Award (NOI) via Long Beach Buys for the Cannabis Equity Dispensary RFP (No. CM-22-125) to select eight equity applicants to apply for a cannabis equity dispensary license. 

  • September 21, 2023 - The Purchasing Division has provided an update regarding the Protest Period, the final phase of the RFP process that automatically commenced once the NOI was posted via LB Buys, the City’s online procurement portal.
  • September 3, 2024 - The Purchasing Division has completed the protest response period requirements and completed the Cannabis Equity Dispensary Request for Proposal (RFP) (No. CM-22-125) process, utilized to select eight equity applicants to apply for a cannabis equity dispensary business license.