ELECTION 2022 – City will offer initiatives to combat Cannabis Initiative 

by Mark McDermott 

The City Council on Tuesday night hatched a plan to stave off the Cannabis Initiative that will appear on November’s ballot. They directed staff to prepare two alternative initiatives to appear on the same ballot, one which would ban cannabis shops within city limits and another that would levy taxes as high as 25 percent should the Cannabis Initiative prevail. 

The Cannabis Initiative, backed by Catalyst Cannabis Co., which operates a chain of stores in Southern California, would allow up to three shops in Manhattan Beach. 

Mayor Pro tem Steve Napolitano, responding to criticism during public comment Tuesday that accused the Council of being “pot pushers” by allowing the Cannabis Initiative on the ballot, said the City’s effort is simply to keep the ban on retail sales which it already has in place. 

“We are dealing with other people wanting to push pot. That’s why we’re here,” Napolitano said. “This is another initiative process that other people have taken and presented and lied to the voters to get their signatures to put it on the ballot. In this case, I would think that we want to direct the City Attorney to come up with a competing ballot initiative from the city that adopts the ordinances that we already have as a prohibition.” 

Napolitano had earlier asked City Attorney Quinn Barrow to investigate how much tax the City could levy, a means to provide disincentive for shops to locate in Manhattan Beach. Barrow told the Council Tuesday that his research indicated 15 to 20 percent taxation is not unusual, which in addition to state and county taxes would make retail cannabis products prohibitively expensive. In giving direction to Barrow for another initiative, Napolitano went higher. 

“If the citizen’s initiative does pass, then it would set a tax rate for it as 25 percent and regulate it, to the extent possible, giving the City as much authority as possible in those regulations,” Napolitano said. 

Those regulations could include cannabis stores’ distance from “sensitive” locations like school and possibly even limit hours of operation. 

Catalyst also has initiatives in Hermosa Beach, El Segundo, and Redondo Beach; the former two cities will also include a Cannabis Initiative on November’s ballot, while Redondo Beach found another means to combat the initiative. Because it is a Charter City rather than a general law city, Redondo was able to delay the vote for more than a year. 

The Cannabis Initiative has drawn opposition even from within the cannabis industry both because its signature collection has allegedly been loose with facts —  one resident testified that canvassers told her the initiative sought to rid the city of illegal marijuana dispensaries —  and because Catalyst appears to be seeking to control the local market. 

Jonathan Cvetko, director of the United Cannabis Business Association, testified before the Council last month that the two firms backing the initiative, Catalyst Cannabis Co. and TradeCraft Farms, were attempting to establish a monopoly locally and had paid canvassers to spread misinformation in order to collect signatures. 

“Each of these Beach Cities have identified the overarching problem, that these initiatives take local control away from the cities to regulate cannabis retail activities,” Cvetko said. “It’s worth mentioning, though, that there are some other important and lesser discussed policies in the initiative that could affect the city. There is no local cannabis tax, resulting in an unfunded enforcement liability. It bans the delivery of cannabis from delivery services outside the city. This will be an enforcement nightmare for the city’s police force…. Number three, it bans all hemp businesses and products from the city. Mother’s Market, the Vitamin Shoppe, and other can no longer sell a variety of CBD or other hemp products. This policy allows the proponents to eliminate the competition to the disadvantage of the residents, furthering their monopoly in the city.” 

On Tuesday night, the Beach Cities Health District again stated its opposition to the initiative and willingness to assist cities in fending it off. 

“Our Beach Cities Health District board has taken a policy position against the introduction of cannabis dispensaries across the beach cities for recreational use due to the impacts on youth,” said BCHD’s Allie Steward. We hear from our youth advisors…that when they see a lot of alcohol and vaping and marijuana around them and it’s perceived to be normal and acceptable in their community, they’re more likely to use. And we see that in data, both here locally and across the country.” 

The Council voted 4-0 to direct the City Attorney to craft alternative initiatives, with Councilperson Richard Montgomery recusing himself because his investments include portfolios that have a stake in the cannabis industry. ER 

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