Orange County City Looks to Recoup Lost Revenue Through Cannabis Sales

February 22, 2021 Updated: February 22, 2021

Costa Mesa is moving forward with its cannabis retail plans as it tries to offset revenue lost amid the ongoing COVID-19 pandemic.

During a Feb. 23 special study session, city council will discuss a staffing plan for implementing Costa Mesa’s retail cannabis tax. The move comes after voters last November passed a ballot measure that will allow the city to permit storefront sales of the drug.

Measure Q is Costa Mesa’s retail cannabis tax and regulation measure. It allows for recreational cannabis dispensaries and deliveries to operate within the guidelines adopted by city council.

The city can generate up to $3 million annually based on a seven percent tax rate and six retail establishments, a staff report says.

Meanwhile, Costa Mesa is facing a $29.8 million revenue loss amid the CCP (Chinese Communist Party) virus pandemic, according to its website.

“The city is looking at options to help offset these revenue losses, and securing the city’s financial future so it can continue to provide the high-quality services residents deserve and depend on,” its website says.

So far, Costa Mesa has resorted to furloughing five percent of its employees, postponing capital projects, implementing a hiring freeze, and more to reduce the projected deficit.

“Without additional funding, the city may be forced to make additional cuts to local services, including 911 emergency response, road repairs, and support for small businesses and other core services,” the city says.

Cannabis tax revenue would be allocated to the city’s general fund and would go toward public safety and essential services, according to staff.

“Transparency and accountability are an important part of this measure, by requiring annual independent financial audits and public disclosure of all funds,” the city’s website states.

Cannabis sales must occur within commercially-zoned properties, or dispensaries.

Dispensaries are not allowed to be located within 1,000 feet of schools, playgrounds, child care centers, or homeless shelters.

They are required to have exterior building lighting, video monitoring, and security guards.

Prior to Measure Q, retail sales of cannabis for recreational use were prohibited in Costa Mesa.

As Costa Mesa moves forward with its marijuana plans, the City of Fullerton on Feb. 16 rescinded an ordinance that would have allowed commercial cannabis sales within city limits.

Fullerton Mayor Bruce Whitaker told The Epoch Times he felt relieved, adding that “the process was flawed from the beginning.”

“It was pushed a little bit too fast for the public,” Whitaker said. “In the end, it’s about government by consent, and I believe the prior council really didn’t listen to the public that much.”

Fullerton’s controversial commercial cannabis ordinance was originally adopted Nov. 17, 2020, with support from councilmembers Ahmad Zahra, Jesus Silva, and then-Mayor Pro Tem Jan Flory. But the composition of the council changed following the November election, with a majority now against supporting the ordinance as written, due mainly to outcry from residents.