Struggling cities hope to cash in on California marijuana laws
LOS ANGELES — As California braces for the impact of relaxed marijuana laws that allow recreational use for adults, several small, financially strapped cities in southeast Los Angeles and elsewhere are at the forefront of efforts to seize business opportunities — despite pushback from some residents.
In Los Angeles County, cities like Maywood are approving marijuana licenses in anticipation of boosting local economies, creating jobs and filling commercial lots. Huntington Park has issued three permits, and Lynwood is negotiating development agreements with 13 applicants for marijuana businesses.
Elsewhere, the desert town of Adelanto has tried to sell itself as a place for growers with a 30-acre industrial park divided into units that will be sold to marijuana cultivators for $7.5 million each. And in Northern California, Oakland has received more than 100 applications for marijuana businesses under a city program in which at least half of available permits will be granted to applicants that include individuals with marijuanarelated convictions.
In contrast, under a proposed plan for Los Angeles, marijuana growers and sellers would receive a “certificate of compliance” instead of a business license or permit. Marijuana businesses in L.A. would remain illegal but could operate with “limited immunity” from criminal prosecution if they follow city and state laws. (In a recent letter to the Los Angeles planning department, City Council President Herb Wesson proposed a new system that would grant legal licenses and permits for marijuana businesses.)
Maywood has already collected more than $90,000 in license application fees for medical marijuana businesses, including cultivation, manufacturing and dispensary use, according to city spokesman Robert Alaniz.
“A small jurisdiction like that could raise tens of thousands, maybe hundreds of thousands, of revenue each year by having marijuana dispensaries within their jurisdiction,” said Patrick Murphy, research director of the Public Policy Institute of California, adding that much depends on competition with neighboring cities and the city’s tax on marijuana businesses. “Being first is always good, because that means that there’s less competition. You at least have a chance to gain a larger share.”
Murphy said Maywood’s actions could create a domino effect among other small cities.
“Their ability to respond and move pretty quickly is much greater than, of course, a big city like Los Angeles,” he said. “If I’m a small town about the same size and see them do it, that means more to me than knowing that San Jose has done it. That’s not reality to me.”
But Maywood may also offer a preview of the challenges cities small and large face in negotiating the contours of a controversial industry without full support from the community. The city has a long history of mismanagement and questionable financial dealings.
A state audit last year said Maywood could face financial collapse, with $16 million in debt that it cannot repay. The predominantly workingclass city south of downtown Los Angeles came close to bankruptcy in 2010 as well, at a time when it also became involved in a major municipal corruption scandal in the neighboring city of Bell.
Now, many residents and former city officials complain that they’ve had little input in drafting a marijuana ordinance that has undergone several revisions and amendments. They accuse city leaders of failing to address major questions about the costs and benefits of allowing commercial marijuana activities.
Their concerns include the proximity to schools of two businesses approved for marijuana licenses. The property of one of the businesses is owned by the head of the Planning Commission.
Residents say the working-class city of 30,000, which stretches just over a square mile, is too small for such enterprises. They have pushed back, collecting hundreds of signatures that sought to force two referendums.
“We have fought hard,” said Elizabeth Bibiano, who gathered petitions at a local school. “I can’t understand how this has gone on, on, on and now we have the permits.”
In an Oct. 25 letter to Maywood’s City Hall, Los Angeles County District Attorney Jackie Lacey admonished the city for failing to provide adequate notice of an August 2016 meeting at which officials discussed repealing a ban on marijuana dispensaries and demanded that it withdraw any recommendations approved at the session. She noted that the meeting was held two weeks before its scheduled date and that notice was not posted until 3:25 p.m. the same day.
The city subsequently revoked the ordinance it passed following the Planning Commission meeting but approved virtually the same plan in December.
Controversy has also swirled around the city council’s decision in late October to terminate two planning commissioners who had opposed allowing marijuana businesses.
Former commissioners Cindy Lara and Heber Marquez said they believe their dismissals were related to their resistance.
“I kept on requesting by emails and by phone calls why I’m not part of it,” Lara said. “I kind of know it has to do with the marijuana. We were the only two people who got kicked out of the planning commission.”
Marquez said he had received few answers about how closely businesses would be allowed to operate near schools, parks and churches.
“My whole argument was, ‘provide this for us so we can see if it’s feasible and possible for Maywood to even proceed with this,’” he said. “They never saw that as a reason to stop and actually look into it.”
Mayor Ramon Medina responded that replacing commissioners was not unusual in a new city government.