If Approved, Costa Mesa Retail Cannabis Measure is Expected to Bring Financial Windfall

UNSPLASH

Stock photo shows marijuana plants.

Retail cannabis dispensaries and delivery services could soon be opening up shop legally in Costa Mesa depending on the outcome of a November ballot measure.

Cities across Orange County looked at cannabis sales as a way to offset budgets pummeled by a loss of sales tax revenue caused by business closures due to the coronavirus pandemic. If voters approve the ballot measure, Costa Mesa could join Santa Ana, the only other city in Orange County to have already legalized marijuana retail sales.

The city would then be able to tax, regulate and profit off of legal retail cannabis shops. City Staff estimate that doing so could bring in between $1.4 million to $3.1 million at a time when the pandemic has cost Costa Mesa millions in sales tax revenue. Cannabis sales would be taxed between 4% and 7%.

The City Council voted 5-2 Tuesday night to approve a resolution in support of the ballot initiative with Council members Sandra Genis and Allan Mansoor dissenting.

Mansoor said there was a lack of transparency on the measure. He criticized the publication of a poll on the initiative online only Monday and said it should have been published weeks ago. Genis voted against the resolution because, she said, she didn’t want to sway the public.

A majority of council has spoken in support of the measure saying it will not only diversify the city’s revenue stream but will bring an end to the numerous unlicensed pot shops in the city that have been selling cannabis products untaxed and unregulated. 

“I believe in the measure,” said Councilman John Stephens.I think it’s implicit that because we voted to put the item on the ballot that we support the item and I think this resolution simply makes explicit what is implicit.” 

The City Council voted in July to put the measure on the ballot.

City staff have said that enforcing a ban on illegal cannabis dispensaries and delivery services has proven to be a burdensome and costly task. One resident telephoned into the meeting to ask what assurance can be given that the city will shutdown the unlicensed shops.

“It can take years to jump through all the hoops to get a business opened in this city yet these illegal dispensaries pop up with no licenses or permits and absolutely nothing is done. What exactly does it take to get an illegal dispensary shutdown in Costa Mesa?” the resident said.

Mansoor agreed with the speaker and said there was no assurance the measure would bring a stop to the unlicensed businesses.

The measure will be on the ballot on Nov. 3.

Hosam Elattar is a Voice of OC Reporting Fellow. Contact him helattar@voiceofoc.org or on Twitter @ElattarHosam.