CITIES SEE GOLD IN MAR­I­JUANA

Strug­gling south­east L.A. County lo­cales have OKd li­censes for stores to sell pot, but some res­i­dents say the process ig­nores their con­cerns

Los Angeles Times - - FRONT PAGE - By Leila Miller

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 grow- ers 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 mar­i­juana-re­lated 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 work­ing-class 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 Dist. Atty. 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.

“The two former plan­ning com­mis­sion­ers were ap­pointed un­der the former mayor and coun­cil ma­jor­ity, and the cur­rent coun­cil ma­jor­ity wanted to align the plan­ning com­mis­sion with the vi­sion of the cur­rent city coun­cil ma­jor­ity,” he wrote in an email.

The prop­erty owner of one of the ap­proved busi­nesses, Corona Sky Inc., is Ignacio Flores, chair­man of the May­wood Plan­ning Com­mis­sion, ac­cord­ing to the busi­ness ap­pli­ca­tion. Corona Sky is on At­lantic Boule­vard, about three blocks from a new mid­dle and high school open­ing in Au­gust, and has been ap­proved for com­mer­cial cannabis manufacturing.

In an email, Flores wrote that “any­one who knows any­thing about fi­nan­cial and build­ing se­cu­rity for your fam­ily knows that real es­tate is a wise in­vest­ment,” and added that he pur­chased the prop­erty more than 20 years ago.

The sec­ond busi­ness, May­wood L’Chaim, lo­cated on May­wood Av­enue across the street from a res­i­den­tial neigh­bor­hood and a block from Loma Vista El­e­men­tary School, was ap­proved for li­censes to cul­ti­vate, man­u­fac­ture and dis­pense mar­i­juana.

May­wood’s mar­i­juana busi­nesses must re­ceive con­di­tional use per­mits to be­gin oper­at­ing, said City Atty. Mike Mont­gomery, who added that Flores will have to re­cuse him­self when the mat­ter goes to the Plan­ning Com­mis­sion.

Like other res­i­dents, Bib­iano said she’s con­cerned about Corona Sky’s prox­im­ity to May­wood El­e­men­tary School, which is two blocks away.

“It’s an el­e­men­tary school where par­ents walk by with their chil­dren,” she said. “We al­ready bat­tled drug prob­lems in schools years ago.… Now I’m even more wor­ried be­cause it’ll be within reach.”

Mary Mariscal, a former plan­ning com­mis­sioner, knocked on doors with other com­mu­nity mem­bers on two oc­ca­sions to gather hun­dreds of sig­na­tures for a ref­er­en­dum on the or­di­nance. The city told Mariscal that the first pe­ti­tions were “moot” be­cause it had re­voked its pre­vi­ous or­di­nance. The sec­ond time, res­i­dents couldn’t gather enough pe­ti­tions by the dead­line.

“I’m not against cannabis. I’m not against mar­i­juana. But it doesn’t fit here — our city is very small,” Mariscal said.

Me­d­ina said a re­view of busi­ness-li­cense ap­pli­cants was con­ducted by an in­de­pen­dent con­sult­ing group be­fore city staff made their rec­om­men­da­tions.

Coun­cil­man Ed­uardo De La Riva, who has voted against the mar­i­juana or­di­nance, said he re­ceived no in­for­ma­tion about com­pa­nies that sub­mit­ted ap­pli­ca­tions other than the two that re­ceived li­censes.

“I didn’t get to see the ap­pli­ca­tion for these two com­pa­nies that were ap­proved,” he said. “I made that clear to staff — ‘you’re ask­ing us to make a de­ci­sion with in­com­plete in­for­ma­tion.’ I don’t know any­thing about these com­pa­nies.”

City of­fi­cials have touted the po­ten­tial ben­e­fits of the busi­nesses for a city that has long been rid­dled with — and crit­i­cized for — fi­nan­cial mis­man­age­ment.

“It means a new rev­enue stream to the city of May­wood, and it means good­pay­ing jobs,” Coun­cil­man Ser­gio Calderon said.

“If you look at the city of May­wood, you will no­tice that the com­mer­cial lots … are not deep enough to at­tract na­tional chains. There’s no way we’re go­ing to get a Tar­get, there’s no way we’re go­ing to get a Best Buy.”

In an email, the mayor wrote that those who op­pose the or­di­nance “are not at­tuned or sym­pa­thetic to needs of our res­i­dents who are suf­fer­ing from var­i­ous af­flic­tions” and said that the mar­i­juana busi­ness’ rev­enue would help the city re­cover from a dire bud­get short­fall.

In Novem­ber, vot­ers ap­proved Propo­si­tion 64, a statewide ini­tia­tive le­gal­iz­ing recre­ational use of pot for adults be­gin­ning in 2018. The mea­sure per­mits cities to as­sess lo­cal taxes on mar­i­juana busi­nesses, but May­wood in­terim City Ad­min­is­tra­tor Reuben Martinez said that the city had made no rev­enue pro­jec­tions or de­ter­mined how it would col­lect any re­turns. Calls to the in­de­pen­dent con­sult­ing group were not re­turned.

The city’s cur­rent or­di­nance seeks to reg­u­late med­i­cal mar­i­juana busi­nesses, de­spite a June 28 news re­lease tout­ing the new or­di­nance and that fact the ma­jor­ity of May­wood vot­ers ap­proved Propo­si­tion 64.

“With voter-ap­proved Propo­si­tion 64, lo­cal gov­ern­ment has a duty and obli­ga­tion to reg­u­late this new busi­ness econ­omy,” Me­d­ina said in the re­lease. “It’s im­por­tant that we at­tract the right kind of op­er­a­tors to en­sure ad­her­ence to city codes and reg­u­la­tions, and to op­er­ate in a way that is re­spon­si­ble and re­spect­ful of the com­mu­nity.”

Be­fore May­wood adopted its cur­rent pol­icy, Marc O’Hara, founder of the po­lit­i­cal con­sult­ing firm Pre­ci­sion Pol­i­tics who at the time was also a di­rec­tor of a mar­i­juana trade group, met with then-Mayor Oscar Ma­gaña in 2014 to ask him to sup­port over­turn­ing an or­di­nance then in ef­fect that banned mar­i­juana busi­nesses.

O’Hara said he rep­re­sented a client in­ter­ested in start­ing a busi­ness in May­wood, and as an in­cen­tive, of­fered to help cre­ate a city­con­trolled non­profit that would re­ceive $150,000 a year from his client.

“I told him (re­peal­ing the or­di­nance) needs to go be­fore the city coun­cil,” Ma­gaña said. “There’s a process that needs to be fol­lowed.”

O’Hara ac­knowl­edged that the mayor seemed un­com­fort­able with his of­fer.

“Af­ter my meet­ing with Oscar, I met with my client and said, ‘This is too hard,’ ” O’Hara said.

News that the city had ap­proved mar­i­juana li­censes sur­prised some res­i­dents, in­clud­ing Manuel Her­nan­dez, who runs May­wood Mini Mar­ket across the street from May­wood L’Chaim.

“If they only come to buy the prod­uct and then leave, there won’t be prob­lems,” he said. “If it be­comes a place where they’re hang­ing out to get the prod­uct, like at a bar, it can be­come a prob­lem.”

Roberto Perez, 35, runs a shop that sells smok­ing equip­ment on Slau­son Ave. He fa­vors the mar­i­juana or­di­nance, ex­plain­ing that the clos­est dis­pen­saries are sev­eral miles away.

“That would be nice,” he said. “A lot of the com­mu­nity has been ask­ing for a dis­pen­sary or reg­u­lar us­age place… I haven’t in­quired be­cause I wasn’t aware that the city al­lowed it.”

At a July 12 City Coun­cil meet­ing two weeks af­ter the city an­nounced its ap­proval of both busi­nesses, the city amended its lat­est or­di­nance, adding de­tailed guide­lines for cul­ti­va­tion, manufacturing and com­mer­cial cannabis ac­tiv­ity.

At that meet­ing, some ex­pressed puz­zle­ment over why guide­lines were be­ing added af­ter the li­censes had been ap­proved.

“You guys are do­ing things re­verse,” said res­i­dent Ri­cardo Lara.

Lara also drew at­ten­tion to some­thing that was miss­ing from the City Coun­cil web­site be­fore the meet­ing: a copy of the pro­posed amended or­di­nance.

“It’s kind of hard for the pub­lic to do the pub­lic hear­ing when you don’t have any of this ma­te­rial avail­able for us to speak on,” he said.

Pho­to­graphs by Francine Orr Los An­ge­les Times

ROBERTO PEREZ owns the Righ­teous Glass Gallery, a shop that sells smok­ing prod­ucts in May­wood. The city re­cently is­sued its first two mar­i­juana busi­ness li­censes, a move that spurred push­back from res­i­dents.

A BILL­BOARD in Vernon ad­ver­tises an on­line com­mu­nity for re­views of pot dis­pen­saries. Nearby cities are hop­ing such shops could im­prove their fi­nances.

Francine Orr Los An­ge­les Times

THE CITY OF May­wood, which hopes to bring med­i­cal mar­i­juana busi­nesses to town, has al­ready col­lected more than $90,000 in li­cense ap­pli­ca­tion fees. Above, a store on Slau­son Av­enue sells smok­ing equip­ment.

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