The West Hollywood City Council last night gave its initial okay to an ordinance that would permit the city to grant up to eight licenses to recreational marijuana stores, eight to medical marijuana dispensaries, eight to lounges offering edible marijuana products, eight to lounges also allowing the smoking or “vaping” of marijuana and eight to locally based delivery services.
The decision came after a lengthy discussion during which Council members debated whether a City Hall proposal to grant up to eight licenses in each of five categories would mean too many marijuana businesses in WeHo. Council members also debated whether vehicles used to deliver cannabis to customers should be required for security reasons to carry two employees, whether space used for on-site cannabis consumption should be limited to 25% of the retail space, whether the city’s four existing medical marijuana dispensaries should get priority consideration in applying for recreational sales or delivery or on-site consumption licenses and how to create an application approval process that isn’t influenced by money or political connections.
The Council will take a final vote at its next meeting on the ordinance approved last night. The City of West Hollywood must have its own ordinance governing the sale of recreational marijuana in place by Jan. 1, 2018, or such sales will be governed by state law.
One issue that would affect an existing marijuana business, Alternative Herbal Health Services at 7828 Santa Monica Blvd., is a requirement in both the state marijuana regulation law and the proposed city law that all retailers be at least 600 feet from a school. AHHS is located fewer than 600 feet from Fountain Day School at 1128 Orange Grove Ave. The Council agreed that AHHS should receive a temporary license for its current location if the state agrees to grant it a temporary license until it can move.
The Council decided to reject the proposed requirement that at least two people be in any vehicle delivering marijuana after objections from some marijuana business owners and advocates for them. Jackie Subeck, CEO and founder of Hey Jackpot!, a Los Angeles cannabis business consulting, events and advocacy firm, said requiring two people instead of one would mean substantial payroll costs for a delivery business.
The Council agreed that a business licensed to offer onsite cannabis consumption should be able to devote up to 50% of its retail space to that purpose. And it agreed that vaping, which is inhaling marijuana through a device that vaporizes the drug rather than burning it, should be allowed only in the sort of places where smoking already is permitted, which already is stipulated by state law.
The merit-based criteria for deciding who gets a marijuana license would assign points based on the following factors:
— Previous adult-use retail, medical-use dispensing, or consumption area experience in a regulated state or in other similarly regulated business such as alcohol sales.
— Ability to demonstrate the quality of cannabis strains and derivative products such as candies.
— Employee training, operating procedures, online ordering systems and procedures for providing cannabis to disadvantaged or disabled persons.
— Social equity in terms of providing a living wage and benefits and complying with local, state and federal employee non-discrimination policies.
— A comprehensive and effective security program.
— Being a pre-existing West Hollywood cannabis business that has no outstanding code violations with the city and is in compliance with local and state laws. That said, an existing medical dispensary would not get preference in applying for a recreational marijuana sale license.
— Being able to meet the City of West Hollywood’s urban design standards.
While those with previous misdemeanor arrests for marijuana sales or possession would not be barred from consideration, the Council agreed to bar those convicted of selling to minors or using minors to dispense marijuana. It also added that the criteria include an understanding by the applicant of West Hollywood’s culture.
The Council didn’t come to a clear agreement on how to vet applications. A City Hall proposal would establish an application evaluation committee with at least three members having experience in city government or the cannabis industry and none with business interests in West Hollywood. While Councilmember John Duran argued that local business owners should be part of the approval process, Councilmember Lindsey Horvath asked why it couldn’t be conducted by existing city staffers.
If the City Council gives the ordinance changes its final approval at its next meeting, the application process could begin on Jan. 2. The four current medical marijuana dispensaries could continue operating under a temporary state license until they receive permanent state and city licenses. They also could be granted temporary use permits to sell recreational marijuana for up to 120 days while they submit formal applications for such a license. All new licenses must be renewed after a year.
The approval process is likely to be somewhat lengthy. Applications can be submitted in January and will be reviewed in February and March of next year. Top applicants will have to be approved to operate their businesses within the proposed zoning area, a process that would take place in March and April. Final approvals would be granted in April and June.
The city estimates it will receive at least $200,000 to $300,000 in additional annual sales tax revenue (an estimate based on an assumption of $20 million in annual cannabis sales). The proposed license application fees would generate $400,000 to $500,000. West Hollywood also will consider next year putting a city-specific tax on the March 2019 ballot.
EDITOR’S NOTE: An earlier version of this story misidentified the school whose closeness to AHHS could pose a problem in its application for a new marijuana dispensary license and erroneously stated that the City Council agreed that marijuana delivery services would have to have two staffers on each delivery. The story has been changed to correct those errors.