City Of Long Beach Rings In 2018 Opening Its Gates To Medical Marijuana Businesses

Long Beach Municipal Code Chapter 5.90 – On November 8, 2016, the citizens of Long Beach voted to approve the regulatory portion of Measure MM, making it legal to own and operate a medical marijuana business in the City of Long Beach. The ordinance allows for medical marijuana dispensaries, delivery, manufacturing, cultivation, distribution, and laboratory testing. The newly added Long Beach Municipal Code (LBMC) Chapter 5.90 requires medical marijuana businesses to be licensed by the State following the State issuing licenses beginning in January 2018.

Marijuana Business Licenses

On November 8, 2016, California voters approved Proposition 64, the Adult Use of Marijuana Act (AUMA). AUMA created a statewide regulatory and licensing system for adult-use marijuana businesses. On June 27, 2017, Governor Jerry Brown signed into law the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), which merged regulations for medical and adult-use cannabis into a single regulatory framework. MAUCRSA grants local governments the ability to regulate and/or prohibit commercial marijuana activity within their jurisdictions. The State of California will issue temporary marijuana licenses beginning January 1, 2018 pursuant to Business and Professions Code Section 26050.1. In order to apply for a State temporary license, Applicants must provide evidence of a valid license, permit, or other local authorization.

The Business License Division within the Department of Financial Management is the licensing authority for all medical marijuana businesses in the City of Long Beach. Long Beach will accept applications only for medical marijuana businesses. Currently, Long Beach is not issuing licenses for recreational marijuana businesses. Long Beach will shut down and prosecute any marijuana business located in the City of Long Beach that does not have the required licenses.

Available Medical Marijuana Business Licenses in Long Beach

Five types of medical marijuana business licenses will be issued in the City of Long Beach:

Medical Marijuana Dispensary

Medical Marijuana Cultivation Facility

Medical Marijuana Manufacturing Facility

Medical Marijuana Distribution Facility

Medical Marijuana Testing Laboratory

Status Of Businesses Providing Adult-Use (Recreational) Marijuana in Long Beach

On November 14, 2017, the Long Beach City Council voted to request the City Manager to work with affected City Departments to develop recommendations to legalize and regulate commercial adult-use (recreational) marijuana businesses in Long Beach. The City Attorney will report back to City Council with a draft ordinance to allow, license, and regulate the retail sale, cultivation, manufacture, distribution, and laboratory testing of adult-use marijuana in Long Beach by June 2018.  In the meantime starting November 14, 2017, a temporary ban is in effect for the next 180 days, prohibiting the operation of any commercial adult-use marijuana activities in Long Beach. This ban does not apply to medical marijuana business licenses.

Procedure For Licensure

The State of California will issue temporary marijuana licenses beginning January 1, 2018. In order to apply for a State temporary license, Applicants must provide evidence of a valid license, permit, or other local authorization. The City of Long Beach will issue a letter of local authorization for an applicant to obtain the temporary State license if the proposed medical marijuana business has completed the following tasks:

1. The Applicant has submitted the Medical Marijuana Business License Application, Operating Plan, Supplemental Information, and applicable fees to the City of Long Beach and such application has been determined by the City Manager or his or her designee to be complete;
2. The City’s Planning Bureau has conducted a review of the proposed business location and has deemed the application to be in compliance with all applicable buffer distance requirements as set forth in LBMC Section 5.90.030 and Section 5.90.060, as applicable;
3. The Applicant has submitted all required plans for plan check approval for review by the Department of Development Services and had such plans approved;
4. The Applicant has been issued a valid building permit for the approved marijuana use at the proposed business location by the Department of Development Services; and
5. The Applicant has paid all applicable business license taxes and fees.

The letter of local authorization does not grant a business the right to operate in Long Beach. The letter of local authorization is exclusively intended to assist marijuana businesses in initiating an application for a temporary license with the State to obtain the license in a timely manner. Upon receiving the State temporary license, a medical marijuana business can start operating in Long Beach beginning January 1, 2018 provided that the businesshas been issued all necessary and valid local permits for the proposed business location and the City has issued a valid City of Long Beach Medical Marijuana Business License.

Acceptable LocationsIn Long Beach For Medical Marijuana Businesses

Proposed medical marijuana facility locations must comply with the restrictions laid out in LBMC Section 5.90.030:

1. No Medical Marijuana Business may be operated in an area zoned exclusively for residential use
2. No Medical Marijuana Business may be located within one thousand (1,000) foot radius of a public or private school (as defined in Health and Safety Code 11362.7689(h));
3. No Medical Marijuana Business may be located within one thousand (1,000) foot radius of a public beach;
4. No Medical Marijuana Business may be located within a six hundred (600) foot radius of a public park or public library;
5. No Medical Marijuana Business may be located within a six hundred (600) foot radius of a day care center (applications submitted before January 1, 2018 are exempt from this requirement); and
6. No Medical Marijuana Dispensary may be located within one thousand (1,000) foot radius of another Medical Marijuana Dispensary.

What Should You Do?

Whether starting a new marijuana business or acquiring/selling an existing marijuana business, be proactive knowing that you have hired tax counsel to implement the proper cash management and accounting systems now.  Marijuana businesses who hire an experienced attorney-CPA should benefit in paying the least amount of tax under the tax code and if audited, the least audit adjustments and avoiding costly litigation. Let the tax attorneys of the Law Offices Of Jeffrey B. Kahn, P.C. located in Orange County, Long Beach and other California locations maximize your net profits and get you the best possible result.