California Cities Are Rethinking Their Marijuana Business Bans

Nearly two dozen towns that had said no to legal weed shops are reconsidering.

Close to two dozen California communities are rethinking their local bans on retail marijuana sales, often under pressure from citizens or the threat of a local ballot initiative.

California's roll-out of legal recreational marijuana following the passage of Proposition 64 in 2016 has been very messy. The ballot measure allowed for municipalities to limit or even prohibit marijuana cultivation and retail sales within their borders. And that's exactly what most cities did: Two-thirds of California cities banned marijuana businesses.  So even though it's legal, many Golden State citizens don't live in a place where they can actually purchase marijuana at a licensed dispensary.

It's one of several reasons (high taxes being another) that black-market marijuana sales are estimated somewhere around the $8 billion range annually, compared to an estimated $5.2 billion in legal sales for 2021.

Now, some cities that had quickly banned the dispensaries (sometimes even in cities where the majority had voted in favor of Prop. 64) are rethinking their decisions.

In Simi Valley, for example, the City Council voted in March to start reconsidering a 2018 decision that prohibited marijuana cultivation, manufacturing, and retail sales within city limits. In Simi Valley's case, citizens were given an advisory vote on whether to allow marijuana businesses, which failed by just 2,000 votes.

But Simi Valley Mayor Keith Mashburn now says residents are asking the city to revisit the issue, and the city will be polling residents for a new round of feedback. Unsurprisingly, money may be on some leaders' minds. Even though the city might not allow direct sales, The Ventura County Star notes that Simi Valley still is able to claim tax revenue from delivery sales within city limits and collects about $15,000 annually. The more of that $8 billion in black-market sales that gets shifted to legal purchases, the more local government can attempt to collect a share.

For the same reason, the city of Healdsburg, in Sonoma County's wine country, is considering ending its ban on the commercial marijuana industry. There, City Manager Jeff Kay estimates that marijuana sales could bring in jobs and hundreds of thousands of dollars in tax revenue, though he also warned that the money "would not be a transformative cash cow."

Some cities are under pressure by citizens attempting local ballot initiatives to allow cannabusiness. In Huntington Beach, two residents have been cleared to get signatures to try to force the city to allow marijuana businesses. Voice of OC notes that the two citizens don't actually appear to be gathering signatures, but nevertheless, Huntington Beach's government is now going to go ahead and ask voters in a June election whether they want to tax potential marijuana businesses in advance of potentially allowing them to open shop there.

Huntington Beach City Council member Erik Peterson bluntly noted that "The handwriting is on the wall that cannabis is coming, legalization is coming, and that the best thing that the city council can do is get out in front of it."

Many cities across the state are mulling over similar changes—Anaheim, Riverside, Santee, and more than a dozen others, if media coverage from across the state is to be believed. Yes, on some level, they're motivated by a desire for more revenue, but in some cases these leaders are also being responsive to the citizens and finally setting aside marijuana panics. And it has also helped that legal marijuana for the past five years has not caused the nightmares fearmongers' insisted. If anything, the various problems California has been having with corruption and black markets for marijuana are the result of how restrictive the government has been in the first place.

These city leaders have the right idea, as opposed to state lawmakers who are backsliding and thinking they can stop the marijuana black market by introducing more criminal punishments and fines. We already know from decades of raids that the drug war has utterly failed to stop marijuana black markets. Get out of the way, and let a million pot shops bloom.