Bellflower renews cannabis business permits for 2021

By Arnold Adler

Contributing Writer

BELLFLOWER — In a special meeting Dec. 10, the City Council renewed for another year 12 marijuana permits held by five groups.

But the permit holders and others seeking to establish a marijuana-related operation will be under new rules, also approved by the council Dec. 10.

The vote on both items was 5 to 0.

According to Randi Stover, assistant to City Manager Jeffrey L. Stewart, the major rule change was that groups holding cannabis business permits in the city will no longer have to undergo an annual public hearing to renew their permit.

Additional changes include allowing the annual drug education and rehabilitation monies to be used for homeless prevention, Stover said in her report.

The council also approved increasing the number of cannabis business permits from 12 to 22. However, the city will limit the number of dispensaries in the city to four.

According to Stover, current marijuana-related operations in the city include cannabis cultivation, cannabis dispensaries, cannabis manufacturing, cannabis distribution and cannabis testing.

“On Oct.19, the city received applications and fees from five businesses for 12 cannabis business permits, Stover said.

The five council-approved renewals were asked to predict future revenue over the next three years.

The Medicine Woman Group, 9058 Rose St., which has permits for sales, manufacturing and distribution, projected total sales of about $8.7 million in 2021 with the city receiving about $405,000 in taxes. Projected sales for 2022 are $9 million and $9.5 million for 2023.

NC3 Systems, Inc., doing business as Deli by Caliva at 9535 Artesia Blvd., has a sales permit. Projections for 2021 are total earnings from sales of $8.8 million, generating $606,000 in taxes to the city; and projected earnings of $11.4 million and $14.1 million in the following two years.

Joint Forces, LLC, which has permits to operate a cannabis dispensary, cultivation, distribution and manufacturing operation at 10040 and 10042 Artesia Place, estimated total earnings for 2021 at $6.5 million with the city receiving taxes of $505,000; and earnings of about $8.3 million and $10 million in the next two years.

BB&Y Logistics, which has a permit to operate a cannabis cultivation facility at 8832 Ramon St., projected 2021 earnings as about $2.6 million with taxes of $178,168 going to the city based on the fee of $17.50 per square foot of growing space, followed by revenue of $3.9 million and $4.7 million in the next two years.

EEL Holdings, which has permits to operate a cannabis dispensary manufacturing and distribution facility at 9032-38 Artesia Blvd., projected 2021 earnings at about $17 million, with $12.3 million from sales and city taxes of $989,355, followed by revenue of $19.7 million and $21.2 million in subsequent years.

City taxes, which the council temporarily lowered earlier this year, are 7.5% on sales, 2% on manufacturing and 1% on distribution.

Permit holders say they have been hurt by illegal operations, which charge lower rates and pay no taxes.

Another hurdle is a Nov. 20 court ruling which allowed cities which prohibit any type of marijuana-related operations, to halt delivery of the substance to any address within their boundaries.

Neighboring Downey Dec. 2 stated it would continue to ban such deliveries.

Downey was one of 25 cities that protested the state rule allowing deliveries in all cities. The court held for the cities, Downey officials said in a press release.

A group of  legal marijuana dealers has called for a crackdown on illegal operators, to allow delivery employees to carry larger quanities of marijuana and for the federal government to remove its prohibition of marijuana sales.

That would allow banks to handle checks and credit card payments for marijuana. Because of the federal prohibition, banks will not do that, requiring transaction to be cash only.

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