Good morning and welcome to Monday Morning Coffee! Grab your cup and let’s get to your weekly briefing of what’s on the agenda for local government and business leaders. Get this in your inbox every Monday by signing up at lbpost.com/newsletters.
City meetings and memos
Remember when the City Council tried to give local cannabis retailers a tax break to help them compete with the black market? Turns out, none of them have yet received a promised 3% credit, according to a new report on the program.
Cannabis is a high-tax business. Last year, legal shops were being charged a 15% excise tax by the state and an additional 8% cannabis retail tax charged by the city on top of Long Beach’s regular sales tax, which could soon be 10.75%.
Sellers trying to play by the rules said they were struggling, and local lawmakers decided to act, with one council member declaring, “The cannabis industry is overtaxed and over-regulated.”
They gave cannabis sellers a small, automatic break by lowering the retail tax from 8% to 7%, and they offered another 3% in tax credits if a series of conditions were met. They included retailers being current on all their paperwork and, critically, catching up on their back taxes or at least holding to a payment plan.
This was easier said than done. As the new report puts it:
“To date, staff have received very few inquiries about the program and only two cannabis businesses have submitted tax credit applications. Of those two businesses, one is close to finalizing their application and qualifying for the three percent tax credit. The primary reason for low participation appears to be businesses’ inability to meet the program’s good standing requirements, which include being current on cannabis tax obligation and adhering to the terms of any payment plan. Many cannabis businesses have defaulted on these payment plans, making them ineligible for the credit.”
As of April last year, cannabis businesses owed the city $8.5 million in back taxes, mostly accrued during the pandemic when late fees and penalties were suspended. The businesses have been able to repay $2.8 million of that debt, but the bills continued to accrue. In all, $7.2 million remains in arrears, according to the city.
The bottom line is this: So many operations have already gone out of business that the city assumes most of the remaining debt will go unpaid. As for those still operating, most of the sellers who got on a payment plan have already defaulted.
The entire memo is an intriguing peek at the local cannabis industry and how much money the city makes off of it. The document includes an interesting chart about how cannabis sales (and tax revenue from it) soared during the pandemic.
And don’t forget, the city is trying to double down on cannabis and the taxes that come with it: Council members have asked for a plan to authorize sales at special events, not just at dispensaries and retail stores.
Elsewhere on the agenda this week, the City Council is scheduled to accept the gift of a lifeguard tower that Billie Eilish danced on as part of a promo for the 2028 Olympics. Maybe you remember the scene — now infamous locally — where announcers identified Rosie’s Dog Beach as Venice Beach during the handover from the 2024 Paris Olympics.
Perhaps there’s some consolation in the fact that Long Beach will now get to keep the prop tower that starred in the short clip. Olympic organizers have offered to hand it over, and the City Council is expected to vote to accept it at its 5 p.m. meeting on Tuesday.
City Manager Tom Modica writes that the tower “presents a unique opportunity to generate excitement, foster civic pride, and serve as a memorable and tangible symbol of the City’s Olympic legacy.”
“By accepting the donation, the City will be able to deploy the lifeguard tower at various public spaces for community activation, creating citywide opportunities for connection and celebration,” he says in the staff report.
As part of the deal, the city will have to get prior approval from Olympic organizers each time they display the tower. Let’s just hope they don’t make us pretend it’s in LA.
Speaking of the Olympics, the Economic Development Commission is scheduled to hear an overview of the Summer Games on Wednesday. And immediately after that, they’ll get a report on plans for the amphitheater being built by the Queen Mary.
It’s hard to know exactly what will be in these reports. To our chagrin, they’re not often shared publicly ahead of many commission meetings. Past experience says they’ll mostly be a summary of what’s already been announced, but there could be some new tidbits, and they’re a good place to start if you want an overview of what city officials are planning.
Business events and information
Long Beach is scheduled to reveal its homeless count numbers today. We’ll be covering it. Be sure to check LBPost.com for the latest news.Reminder: Memorial Day has passed, but a ceremony honoring Long Beach’s Naval history and commemorating the 74 sailors lost aboard the USS Frank E. Evans in the 1969 maritime disaster is coming up on Tuesday at 10 a.m. Check out all the details in last week’s newsletter.
ICYMI — California and national news
As the space business scales in Long Beach, major companies say they need workers (LB Business Journal)Whipsawing tariffs have put many industries on edge — even dog leash sellers (NPR)Trump Administration names Long Beach as a sanctuary city that could soon face penalties (LB Post)
Here’s what’s on the agenda for city and business leaders — including whether a local tax-credit program is working. Read More
