CANNABIS REVENUE — WHERE DOES IT GO?
State’s pot earnings fall short, but there are local success stories
Nurse Justine Wiley, left, high-fives Lilah, 15months, and mom Cecilia Mendoza in Santa Cruz. Cannabis taxes pay for nurse visits.
Drug abuse prevention, public safety, protecting the environment, economic development — these were some of the visionary promises that legalized cannabis would pay for.
Now, 11/2 years after the start of legal sales, the lofty goals of Proposition 64 remain only partially fulfilled, deferring the dream of funding major new social programs.
In order to collect the $1 billion a year in state tax revenue promised by backers of the initiative, plus millions of dollars more for cities and counties, California needs to sell at least $7 billion worth of weed. Last year, $2.5 billion was sold.
Hampered by a slow start and strict rules required by the initiative, the state has put a regulatory structure in place. But much else is still on the drawing board.
Only an estimated onethird of communities allow sales — and most deposit their new tax revenues into a general fund, to be spent on everyday needs rather than special projects. Two-thirds of California’s communities aren’t getting any direct revenues at all, because they’ve rejected cannabis businesses.
There are a few notable exceptions, according to a Bay Area News Group analysis, where governments are creating success by moving quickly to license businesses, listen to public concerns and target specific needs.
Santa Cruz County is assisting needy mothers and babies. Monterey County established
reputation,” Wang said in an interview after the meeting.
Wang said she was thankful that the council “taking care of Mountain View residents” but would have liked to see a ban on deliveries as well.
A small handful of residents, who were far outnumbered by their counterparts, spoke in support of allowing both cannabis storefronts and delivery businesses within the city — citing that nearly 68 percent of the city’s residents voted to
legalize marijuana.
Former Mountain View Mayor Leonard Siegel, who voted in support of the ordinance in October, called on the council to refrain from making any changes to the ordinance.
“We want variety; We want competition; We want a regulated system so that those people who already use marijuana and may be buying it from illegal sources, can use it safely and legally here in Mountain View,” Siegel said during the meeting.
Although California voters legalized recreational marijuana in Nov. 2016 by passing Proposition 64, cities can regulate it within
their boundaries. Following Thursday night’s decision, Mountain View joins more than a dozen Bay Area cities and hundreds of California municipalities that have banned the storefront businesses.
In October, Mountain View City Council passed an ordinance allowing four cannabis businesses within the city boundaries — two storefront shops and two warehouse and delivery businesses.
But about four months later, newly elected councilwoman Ellen Kamei voiced concerns about the city’s ordinance and asked council to consider tightening the
restrictions.
At a meeting in March, the council discussed scrapping the ordinance and banning cannabis businesses entirely but that motion was defeated.
Instead, the council asked staff to look into adding tighter restrictions to the ordinance, including bigger buffer zones around schools and other “sensitive use” facilities like parks, libraries and community centers.
At an April 24 meeting, the environmental planning commission meeting voted to recommend that the council amend the ordinance to only allow one cannabis business in the
city’s downtown area, prohibit the businesses in and around the San Antonio Center shopping area and mandate a 600-foot buffer zone between storefront cannabis businesses.
The council deviated from that recommendation Thursday after listening to its residents, Matichak said.
Under the city’s ordinance, applicants were required to go through an extensive process that was expected to culminate with a March lottery. That lottery was postponed after residents and the council members began expressing more qualms about the cannabis shops.
Ten potential business owners submitted applications but only four of those applicants were deemed eligible by city staff — three storefront businesses and one distribution business.
Under the amended ordinance, the one distribution business deemed eligible will move forward with opening its business. The other three applicants for storefront businesses will be given the opportunity to reapply for a delivery business.
If the city does not reach three qualified delivery businesses from those applicants, it may open another application period.