by Kevin Cody
Hermosa Beach has become the first of the three Beach Cities to legalize home, and business delivery of cannabis.
An ordinance allowing the delivery of cannabis in Hermosa Beach, with the exception of schools, parks, and city hall, was approved on a 3 to 2 vote by the city council at its Tuesday evening, September 13, meeting.
The ordinance specifies an annual $702 license fee and a five percent cannabis sales tax. Cannabis deliverers without a permit will be subject to a $20,000 per day fine. But first-time violators will be given the option of having the fine forgiven if they apply for a sales license.
Councilmember Justin Massey introduced the motion. Councilmember Michael Detoy seconded the motion on the condition it be amended to prohibit cannabis deliveries in commercial zones.
Detoy withdrew his second when Massey said he saw no reason to exclude commercial districts.
“What’s the difference between cannabis delivery to a place of work and alcohol?” Massey asked.
“Would you allow cannabis delivery to an alcohol establishment?” Detoy responded.
“If I want a fifth of bourbon, or five [cannabis] gummies delivered to my hotel room, what’s the difference? If the concern is about delivery to bars, we can delete bars,” Mayor Raymond Jackson said. He then seconded Massey’s motion.
City Manager Suja Lowenthal told the council the city will have access to a State software program that tracks deliveries by zip codes, but not by addresses.
“There’s no way to enforce stopping deliveries to the commercial zone,” the city manager said.
Detoy countered that he did not see a distinction between zone enforcement of cannabis delivery, and zone enforcement of ride sharing, which the city currently does.
Council Member Rob Saemann provided the third vote in support of allowing delivery in commercial zones.
“If a business doesn’t want cannabis deliveries, it can put a sign in their windows stating that,” he said.
Councilmember Dean Francois joined Detoy in opposing Massey’s motion because he wanted delivery to bars excluded, he said.
Redondo resident Jonatan Cvetko, the executive director of the United Cannabis Association (of retailers), congratulated the city on being the first of the three Beach Cities to legalize cannabis sales.
But he expressed concern that the five percent cannabis tax was too high.
“We now have a triple compounding tax,” he said.
On a $40 cannabis sale, he explained, Hermosa’s five percent tax would add $2 to the sale. The State’s 15 percent cannabis excise tax will add $6.30, and the 9.5 percent sales tax will add another $4.59, for a total of $12.89, or 25 percent.
High taxes have been widely blamed for the continued popularity of blackmarket cannabis.
Cvetko said he plans to apply to Hermosa Beach for a delivery.
The Hermosa council voted to lift the city’s ban on cannabis deliveries in August, 2022, in hopes of undermining support for Measure M, a retail cannabis initiative on the November 8, 2022 ballot. Residents rejected the initiative, which would have allowed delivery, and two retail cannabis stores, by a vote of 72 percent to 27 percent.
On the same ballot, residents approved by a vote of 66 percent to 34 percent, Measure T, authored by the city council. Measure T allowed a tax of up to 10 percent on cannabis sales.
The tax applies to all “cannabis or industrial hemp businesses,” which include CBD (cannabidiol) products sold by a wide range of local retailers. The city has not yet begun to collect taxes on CBD products, and does not have revenue projections for these products, according to Hermosa Beach Finance Director Viki Copeland.
Manhattan Beach, and Redondo Beach also rejected initiatives on their November 2, 2022 ballots, that would have allowed cannabis delivery, and retail sales in their respective cities. During the same election, Manhattan residents approved a measure authored by its council, banning all cannabis sales in the city, including delivery.
Prior to last November’s election, Redondo’s council passed an ordinance approving cannabis delivery, and two cannabis retailers (as opposed to three proposed by the initiative). Last week the Redondo council directed city staff to draft a procedure for taxing cannabis deliveries. Redondo has not yet begun accepting applications for either cannabis delivery or cannabis retail stores. ER
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Hermosa Beach council okays cannabis delivery, but not to City Hall – Easy Reader
