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The high cost of pot?

While Long Beach dispensaries apply for cannabis permit in compliance with recent ordinance, illegal markets take advantage of transition process

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The discussion of recreational marijuana throughout Long Beach reached another milestone on July 13, as Mayor Robert Garcia signed the adult-use cannabis business ordinance into law.

During a phone interview last week with the Signal Tribune, Ajay Kolluri, manager for the Long Beach Office of Cannabis Oversight (OCO), said the law will take effect 30 days after it has been signed.

“We will be accepting adult-use cannabis applications,” he said about the 30-day process. “We expect that the medical businesses that are open right now will likely apply as soon as they can. It will take some time for us to process them.”

Adam Hijazi, co-owner of the Long Beach Green Room dispensary, said there are application fees and facility regulations under which they have to operate before citywide dispensaries are allowed to sell cannabis for adult use.

During a phone interview Monday afternoon with the Signal Tribune, Hijazi said that he was happy to see the City pass the new ordinance, but that the application process did come with some hefty costs.

“Definitely excited about this new law,” he said. “People have been losing their medicinal cards, so [it] was very essential to have [this] law because we were letting so many people out of our legal facilities back into wherever it is that they go.”

Under the newly adopted law, cannabis dispensaries are required to undergo facility inspections to determine if they qualify for the adult-use sales permit. The quality of laboratory testing, packaging and labeling of cannabis has drastically improved as well, according to Hijazi.

Despite those improvements and the City’s support, Hijazi said that until the 30 days required for the law to take effect have passed, illicit marijuana markets are in a more favorable position for consumers.

“Right now, it’s in a really weird place. It kind of is hard to compete with that market,” he said. “There’s a lot of people that have two jobs, work hard at it every single day, and now what they usually get for $40 or $50– now they are getting it for $65 or $75, so it does make a difference.”

During a phone interview Tuesday afternoon with the Signal Tribune, Taylor Anderson, Long Beach City attorney, said the City echoes the dispensaries’ concerns about the illicit cannabis market.

The City is working on enforcement strategies as far as attempting to identify and shut down the unlicensed businesses.

“It is a tall order,” she said. “We have been working since 2016 to shut down illegal businesses as they’re reported to us, or as we are able to proactively find them as well.”

Anderson said the shutting down of the illicit cannabis market citywide and statewide is going to be an ongoing effort.

She added that the Green Light Long Beach program is used to help educate the public about legal and illegal cannabis products.

“A big problem is that consumers don’t realize– those [illicit] products aren’t tested,” Anderson said. “More times than not, when sheriff departments up north have to break down an illegal grow, they have to wear full hazmat suits because of the kinds of pesticides being used at these illegal grows. People are taking that into their lungs. It’s not being tested for mold. Yes, it might be more expensive for now, but hopefully, as more people [buy] from licensed dispensaries, the cost will go down.”

Ultimately, Hijazi said, consumers buying from legal dispensaries are paying for better quality. This includes the testing, sourcing and packaging of cannabis.

On July 1, the State mandated that licensees may only sell cannabis goods that have been tested, according to cannabis.ca.gov.

Hijazi said this state requirement and the cost to apply for the adult-use cannabis sales permit has caused some dispensaries to “lose business overnight.”

He said that, according to the city manager’s office, it costs roughly $6,000 yearly to comply with all of the City’s regulations.

On Tuesday evening, the city council met to discuss a resolution amending the master fee and charges schedule for the adult-use cannabis business application fees– which allow the City to charge businesses directly for services. Without it, the City cannot take in applications for adult-use permits because there would be no fee to charge.
The council unanimously passed the resolution.

According to the City’s financial management web page, licensed adult-use cannabis businesses are charged an annual fee of $2,840 per license to recover the cost of oversight and regulatory services the City provides registered dispensaries. There is also a $1,000 penalty fee for illegal cultivation.

During Tuesday’s council meeting, Ivan Jimenez, Gold Rush Farms representative and Long Beach resident, said that his colleagues in the marijuana industry are moving to other cities, such as Whittier, because the cannabis-permit fees are cheaper.

Eighth District Councilmember Al Austin said that Long Beach has “fair” application fees, and he added that the City of San Jose charges a $131,000 yearly operating fee.

With the master fee and charges schedule adopted, city officials can begin to process the adult-use cannabis applications.

“We hope there will be more help citywide and statewide to help legal operators turn this market around and bring all the users into the light,” Hijazi said.

He added that adult-use cannabis sales will likely take place in late August once the 30 days have passed.

2 Comments

2 Responses to “The high cost of pot?”

  1. Matthew Vinson on July 31st, 2018 3:31 pm

    I’m happy to hear LBC is finally getting with the program.

  2. sable on August 15th, 2018 12:45 pm

    The cost of ‘pot’ in Long Beach is ludicrous, even for patients. LB has an additional tax added to every cannibus sale. Im told this is because we had to fight to have it in our city. Hardly worth it, as unfortunately now, that most can’t afford to buy it here.

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The high cost of pot?