CANNABIS CONVERSATIONS ON TUESDAY

The Costa Mesa City Council meets again on Tuesday, August 1, 2023 and, among the many issues on the agenda, are two involving cannabis retail sales in the city.  One is an appeal of a previously denied application by the Planning Commission.  The other is a discussion on possible changes that might be made to the current ordinance that governs retail cannabis sales.  After much contemplation I decided to share my views on this issue with the City Council and wrote the following email to them this afternoon.  Take a few minutes to read my thoughts.

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TO:  Mayor John Stephens, Mayor Pro Tem Jeffrey Harlan, Council Members Arlis Reynolds, Manuel Chavez, Andrea Marr, Loren Gameros and Donald Harper.

SUBJECT:  Cannabis ordinances in the City of Costa Mesa

Dear Elected Leaders,
I write to you today as a 50-year resident of Costa Mesa with some significant concerns about how cannabis is being managed in our city.  You will address some of these concerns during your meeting Tuesday, August 1, 2023.

GREEN ZONE TAX REDUCTION
Several years ago the residents approved the non-retail sales uses of cannabis to be conducted north of the I-405 Freeway - an area known as the Green Zone.  Those activities were to be taxed at 6% of sales.  After a short time the operators of those businesses began to whine to the City Council that the tax was making it difficult for them to make a profit, so the Council knuckled under and reduced the tax to 1% - barely enough to provide administrative oversight of those activities.

RETAIL CANNABIS SALES
More recently the voters of this city overwhelmingly authorized the retail sales of cannabis products, approving a rapidly-crafted ordinance that, as it turns out, left too many loopholes in the process, including the total number of cannabis outlets to be approved and some laxness as to locations thereof.

APPEAL OF A DENIAL
On your agenda Tuesday night is an appeal of a recent Planning Commission denial of a cannabis outlet.  I watched that meeting and think the Planning Commissioners reached the proper conclusion. I hope you will uphold that denial.

REVIEW OF THE CANNABIS RULES
Also on your agenda Tuesday night is a request to revisit the cannabis ordinance with an eye to tightening up rules about total numbers and locations.  I wish to address that item.

NOT A FAN OF “THRESHOLD DRUGS”
First, I’m not a fan of cannabis sales.  There is irrefutable scientific evidence, which can be found with a simple Google search, that cannabis use can be - and many times is - a threshold drug, leading to the use of much more addictive substances.  As you know, our area is in the midst of a very serious opioid epidemic and there is reason to believe that easy availability of cannabis may contribute to that epidemic.  That being said, we have an ordinance that authorizes retail cannabis sales, so...?

HOW MANY ARE TOO MANY?
Currently there are 21 cannabis dispensaries approved for our city, with MANY more in the hopper pending consideration/approval.  At one time the total was over 60 applications pending.  While nobody can tell us how many should be approved, logic tells us that 5 dozen dispensaries - several with a home delivery element - are just too many for our city of around 112,000 souls.

“THE MARKET” MYTH
Some council members - and some shills for the industry - tell us “the market will take care of itself” - meaning that if there are too many dispensaries some will drop by the wayside because they cannot compete with others.  We see no evidence that this assumption is valid so far.  Logic tells us that a finite number should be established and controlled.

BUSINESS OUSTERS
As the approvals have been made we’ve seen some long-established businesses forced out of their locations because cannabis businesses can pay steeper rents.  Some moved while others just packed it in.  As some of those unsuccessful cannabis businesses drop by the wayside they leave in their wake those ousted businesses AND vacant storefronts at their locations.

CLUSTERING
As applications have been approved we have seen several venues throughout the city that now have “clusters” of cannabis retail outlets in close proximity to each other.  In my view, this is bad for their business, and bad for the other businesses and residences nearby.  We should designate minimum spacing between retail cannabis outlets.

APPLES AND ORANGES
In response to that assumption, some folks - including some elected officials - trot out the facts of the number of places in our city where alcohol and beverages containing it, are widespread in our city, citing restaurants,  bars, liquor stores, markets, mini-markets, etc.  In my view, this straw man is an “apples and oranges” situation.  Since the end of prohibition nearly a century ago, alcohol sales has been a federally-monitored activity.  Bars and restaurants permit on-site consumption of alcoholic products.  There is no such permission for on-site consumption of cannabis products… yet.  Liquor stores typically also sell other products.  Markets and mini-markets have alcohol sales as only a small segment of their total retail sales.

DUI IS MEASURABLE - CANNABIS IS NOT
Overuse of alcohol is monitored by the police when they stop impaired drivers and administer blood alcohol tests.  No such test currently exists for the cannabis-impaired.  We rely on the training and skills of our police officers to make assumptions about the level of impairment of drivers under the influence of cannabis or other drugs.

CANNABIS SALES PROXIMATE TO REHAB HOMES
In their recent meeting the Planning Commission chose - unwisely, in my view - to shove an application for a cannabis store to their next meeting, apparently hoping the discussion held in the Joint Study Session about the Inclusionary Housing Ordinance might provide some guidance on that issue.  I can’t understand how that would be relevant nor timely.  Regardless, one of the concerns expressed about that particular location was the proximity to a residential rehabilitation home.  Yes, that should be a codified concern.  Just as is the case with churches,  schools and playgrounds, cannabis dispensaries should not be permitted near a known rehab home.  The quandary here is that there is NO control over where such homes may be located.  AND, further complicating this issue, is the fact that cannabis products may be delivered to locations in our city - without restriction - by drivers from cannabis outlets.

CANNABIS SALES TAX
Another factor I see coming into play soon is the 7% tax on retail cannabis sales.  It will not surprise me at all if, in the very near future, existing cannabis retail operators band together to complain to the city officials that the 7% tax is unworkable for them, and request (demand?) that it be reduced.  There is a history of this happening with businesses in the Green Zone.  One of the selling points used to promote the ordinance authorizing the retail sale of cannabis products was that it would generate significant sales tax dollars.  I expect, if pushed, this council will, once again, knuckle under and reduce the sales tax on retail cannabis stores.  That, in my opinion, would be a “bait and switch” move -  a failure to follow the wishes of the electorate, who passed the ordinance, at least in part, because of the potential tax revenue.

TO SUMMARIZE
Summarizing this long-winded essay, I feel the following issues, and probably others, should be addressed and clarified/modified regarding cannabis sales in Costa Mesa:

1-Restrict the total numbers of such businesses in the city.

2-Redefine the restrictions on locating near drug and alcohol rehabilitation homes.

3-Make it clear that the sales tax burden of 7% WILL NOT be reduced for any retail sales cannabis business.

4-Modify the ordinance to prohibit “clustering” of cannabis businesses in the city. 

PROTECTING OUR CITY’S IMAGE
As a long-time resident of Costa Mesa - one who actually has paid attention to municipal issues for most of the past couple decades, studied them and offered opinions on them - I don’t want our town to become known as Orange County’s “Cannabis Central”.  I know this view is not shared by some of you - some who have established close relationships with some applicants and their representatives and see the siren-song of sales tax revenue worth the diminishing of our image in the community of cities.  I don’t want our city to be the “go-to” place for drugs.  This city has SO MUCH to offer the broader region - wonderful cultural and artistic venues, unparalleled shopping venues, proximity to nearby beaches, etc. - that it would be a real shame to have our image darkened by the proliferation of these businesses. 

YOU HAVE DEMONSTRATED GREAT LEADERSHIP BEFORE

As a group you’ve demonstrated great leadership managing the homelessness issue - you’ve shown the way to all other Orange County cities on that subject.   It’s NOT TOO LATE to do the same on this issue - to throttle-back and implement significant controls on cannabis businesses.  As you hear the discussion and the views of folks supporting and opposing the issue, please give it careful consideration Tuesday night. 

THANK YOU…
 I continue to be grateful to each of you for your dedication to our city and the time you take to manage such important issues.  Most of you read the staff reports, consult with the staff on sticky issues, visit sites in question and represent our city at ceremonial events.  That, of course, is why we pay you the big bucks and I appreciate most of you for your efforts on our behalf.  Thanks for that.

Respectfully,

Geoff West

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I know the council will be interested in opinions of the residents on this issue.  Please attend and speak, or call in during the appropriate "comments" segment.  I'm going to share this post on my Facebook page.