Equity Delivery Ordinance
On October 12, 2021, the Office of Cannabis Oversight presented the feasibility analysis on allowing non-storefront retail (delivery) businesses in the city. The presentation also included a report on the feasibility analysis to allow up to an additional eight (8) retail storefront (dispensary) licenses made exclusive to equity applicants in the city. The City Council directed staff to develop an ordinance for both delivery and equity storefronts, making both exclusive to equity applicants.
STAFF RECOMMENDATIONS & PRESENTATION
As part of staff's presentation to the City Council, staff provided the following recommendations related to the feasibility of allowing delivery and equity dispensary facilities in Long Beach:
- Allow delivery with no licensing cap and make licenses available exclusive to equity applicants.
- Expand the Green Zone for dispensaries in Long Beach.
- Allocate eight new adult-use dispensary licenses to verified equity applicants.
- Use a hybrid application process, including a merit-based review and lottery, to select which equity applicants can move forward in the dispensary licensing process.
- Strengthen the LBMC and provide additional education, training, and direct technical assistance to equity applicants.
- Add 2.0 FTEs at an annual estimated cost of $230,000 and one-time funds of $325,000.
- Increase the cannabis business license tax by .25% for all cannabis businesses charged a percentage of gross receipts.
- Report back on the status of the new equity license types in 24 months.
CITY COUNCIL DECISION
After discussing staff's recommendations, the City Council voted to:
- Direct staff to prepare an ordinance to allow cannabis delivery and equity dispensary facilities in Long Beach;
- Have staff conduct an analysis of a 1,500 ft. buffer for dispensaries, in addition to the buffer recommendations;
- Eliminate the proposed tax increase and look for grants as a first option for funding;
- Authorize $50,000 for a consultant to assist in engaging the community on the design of the equity dispensary licensing process; and,
- Eliminate the lottery from the dispensary application process and instead focus on a full merit-based process.
View the minutes from the meeting.
Staff is currently working on drafting ordinances to allow for equity delivery businesses in Long Beach. Staff will be presenting the delivery ordinance to the City Council after the zoning amendment is passed by the Planning Commission in June 2022.
At the State level, a delivery only (non-storefront) license allows for the retail sale of cannabis and cannabis products directly to consumers through delivery if:
- The licensed retail business is closed to the public.
- Deliveries are made to a physical address in any jurisdiction within the California that is not on publicly owned land, a school, a daycare, or a youth center.
- Delivery employees must verify the age of the customer purchasing cannabis goods and prepare a delivery request receipt for each delivery of cannabis goods.
- Cannabis goods must comply with all packaging, labeling and exit packaging requirements.
- Delivery drivers must be employees of the business, no third-party deliveries are allowed.
- All cannabis goods have been obtained through a licensed distributor.
Delivery-only businesses can operate as a microbusiness if they intend to engage in at least three (3) commercial cannabis activities, as defined by the State of California. A licensed non-storefront retailer or licensed microbusiness who is not engaged in storefront retail sale is not required to hire or contract for security personnel.
*This is not a complete list of requirements for a delivery-only license and additional requirements may apply.
Delivery (non-storefront) businesses require less up-front capital to build out, given their smaller footprint compared to other license types and that they are not open to the public.
Providing this license type to equity applicants will decrease the barriers to entry into the cannabis industry, promote equity business ownership and access to the retail cannabis marketplace in Long Beach.
Survey - The Office of Cannabis Oversight prepared a survey that was posted to the City’s website on June 7th, 2021 and emailed directly to over 850 stakeholders. The survey closed on June 30, 2021 with 79 responses. Community input collected from the survey was included as an attachment to the Cannabis Non-Storefront Retail (Delivery) Feasibility Analysis that will be presented to the City Council. Read the complete report here.
Town Hall - The Office of Cannabis Oversight invited cannabis businesses, community members, and the public to attend a town hall meeting to share input about licensing and regulating delivery only businesses in Long Beach. Community input collected from the Town Hall was included as an attachment to the Cannabis Non-Storefront Retail (Delivery) Feasibility Analysis that will be presented to the City Council later this year.
Watch the June 16th, 2021 Town Hall Video Here.
To date, the City has taken the following actions regarding delivery:
- July 31, 2020 - Staff released a feasibility study to the City Council on delivery businesses
- August 5, 2020 - Staff released a memo to the City Council on equity business ownership opportunities, which included delivery.
- January 5, 2021 - The City Council voted to request staff to conduct a feasibility study on licensing and regulating delivery, including setting a cap on the number of licenses and creating a priority licensing process for equity applicants.
- January through May 2021 - Staff has been performing research and outreach to other cities regarding their delivery programs and conducting policy discussions with various City departments responsible for the licensing and regulation of cannabis facilities.
- June 7, 2021 – The City of Long Beach Delivery-Only Retail Survey became available. Community input collected from the survey was included as an attachment to the report that will be presented to the City Council later this year.
- June 16, 2021 - Staff hosted a Town Hall with members of the Long Beach community to solicit feedback on the delivery business type and increasing equity business ownership opportunities. Community input collected from the Town Hall was included as an attachment to the report that will be presented to the City Council. Watch the June 16th, 2021 Town Hall Video Here.
- May through August 2021 - Staff drafted the Delivery-Only Retail feasibility report.
- August 17, 2021 - The complete report was published to the MEMOS TO THE MAYOR AND COUNCIL web page.