Bellflower raises pot taxes, but not as high as expected

Wave Staff Report

BELLFLOWER — Four legal marijuana dispensaries are facing a 1% tax hike on the sale of cannabis as of July 1, but the increase is less than previously proposed.

The City Council unanimously agreed June 14 to raise the tax on dispensary retail sales from the current 7.5% to 8.5% instead of the 10% that was proposed in Measure B, a voter-approved tax levy passed in March 2017.

The reduced increase is aimed at keeping the Bellflower shops in competition with those in surrounding cities, such as neighboring Long Beach, where the sales tax is 8%, said Travis Sais, assistant to City Manager Jeffrey L. Stewart.

He said the dispensary retail taxes in other cities include 18% in Carson, 10% in Los Angeles and Maywood; 8% in Santa Ana; 7% in Costa Mesa; 7.5% in West Hollywood; 6% in Culver City and Pasadena; and 2.5% in Malibu.

In a report to the council, Sais said the 8.5% tax is estimated to create about $2.6 million a year in revenue to the city. The 1% hike is estimated to bring in $300,000 annually.

He noted that the council had previously altered the tax proposals in Measure B. In  September 2020, the proposed tax of 7.5% for manufacturing was dropped to 2% and the levy for distribution was lowered from 7.5% to 1%.

Those two taxes will not change July 1, nor will the $1,500 a year fee on transportation.

Three tax hikes were approved as listed in Measure B. They are on non-nursery cultivation, from $17.5 a square foot to $20; nursery cultivation, from $3.5 per square foot to $5; and testing, 7.5% hiked to 10%.

Bellflower has issued 12 permits for various aspects of cannabis operations. They are held by five groups — The Medicine Woman, Joint Forces, BB&Y Logistics, EEL Holdings and NC3 Systems, doing business as Calivia.

All but BB&Y have retail/sales permits. BB&Y has a permit only for non-nursery cultivation and currently uses 4,992 square feet. It’s limit is 10,181 square feet under the permit, Sais noted in his report.