LA licensing fees for marijuana businesses exceeding expectations

Los Angeles Daily News/February 16, 2018

LOS ANGELES >> The city of Los Angeles has issued a total of 101 temporary authorizations to marijuana businesses since the drug became legal for recreational use and sales in the beginning of January, a Los Angeles City Council committee was told Friday.

Cat Packer, head of the city’s Department of Cannabis Regulation, also told the Rules, Elections, and Intergovernmental Relations Committee that her office has so far taken in far more revenue than was anticipated.

“Originally the department was given a budget of $1.3 million, and to date we have collected over $2.2 million in licensing fees, and we have around about $800,000 in outstanding invoices, so it is likely that our revenue projections through June will be $3.5 million,” Packer said.

California voters approved the legalization of recreational marijuana in 2016, effective Jan. 1 of this year. In March 2017, Los Angeles voters approved Measure M, which set up regulatory measures for the cannabis industry, which could generate more than $100 million annually in revenue through licensing fees, sales taxes and other sources for a city with a budget that topped $9 billion last fiscal year.

The committee’s meeting focused on several outstanding issues that were not completed when the City Council approved several new ordinances in late 2017 to regulate recreational marijuana, including potential restrictions on advertising.

A proposed ordinance, forwarded by the committee to the full council for consideration, would prohibit marijuana advertising within 800 feet of sensitive locations such as schools, limit a cannabis business to one on-site sign that has a maximum size of 75 square feet, and prohibit portable signs or sandwich signs located in the public right-of-way.

The committee also approved a motion that explores expanding the city’s social equity program into parts of the San Fernando Valley. The program aims to help people convicted of some low-level marijuana-related crimes and residents in some low-income communities impacted by the war on drugs to open a cannabis-related business.

The committee also approved a report about on-site cannabis consumption. Currently, California law allows for on-site consumption of cannabis at businesses, but only if the local jurisdiction specifically allows it.

The City Council did not allow for on-site consumption in the ordinances it approved last year, but is exploring the option. The committee approved a city staff report that detailed the rules in place for jurisdictions that do allow on-site consumption or are in the process of allowing it, including San Francisco, Oakland, West Hollywood, although the report did not contain any recommendations or potential rules for Los Angeles.