Is Signal Hill ready for the cannabis business? Residents show 50 percent of support

During its March 10 meeting, the Signal Hill City Council received survey results on resident satisfaction and attitudes regarding commercial cannabis activity. After much discussion, the council requested a financial study on how such businesses would impact the city.

City Manager Hannah Shin-Heydorn recapped how the City chose the path of “observing and analyzing the cannabis industry in California,” banning all commercial activity though the State legalized medical and recreational marijuana use with Propositions 215 and 64.

A Prop-64 subcommittee comprised of city officials gathered information and toured commercial cannabis facilities for two years, sharing that information with residents during two community workshops last year, Shin-Heydorn said.

As part of that process, the council approved a contract last October with consulting firm True North Research to survey residents on their satisfaction with city services and attitudes about commercial cannabis activity.

Dr. Timothy McLarney, president of True North, told the council during the meeting Tuesday that his firm conducted the survey in January, questioning 316 residents most likely to vote this year. The interviews took an average of 18 minutes each and results have a 95% confidence rate, he said.

Resident satisfaction
Most survey respondents expressed satisfaction with their quality of life in Signal Hill, with 83% rating it as excellent or good, McLarney said.

Nearly a quarter said they couldn’t think of anything they’d change.

The few suggestions for improvement included greater police presence, addressing homelessness, beautifying the city and increasing shopping opportunities.

But McLarney told the council that the list reflected no pressing issues.

“The fact that you don’t have a single item here that registers even 15% or more [of respondents wanting change] suggests that you’ve done a really good job balancing your efforts so that you’re not neglecting a particular issue in the community,” he said.

McLarney further noted that the survey, acting as an overall performance measure for the city, shows that 95% are satisfied and the ratio of satisfied to dissatisfied residents is 18 to 1.

“It’s a really high bar to achieve,” he said. “I think it’s a reflection of good leadership and certainly hard work and smart decisions by staff as well.”

Cannabis attitudes
As to the second part of the survey on commercial cannabis activity, McLarney said that opinions differed somewhat across subgroups but overall, respondents supported allowing cannabis businesses in the city, but favored certain types and also taxing and regulating them.

Residents under 40 years old were most supportive, with those 50 to 64 mixed about the issue and seniors generally in favor, McLarney said.

Among those who opposed cannabis businesses, 20% said they are not necessary in the city since marijuana is accessible in nearby communities such as Long Beach. Nearly as many said that allowing such businesses would reduce the reputation of Signal Hill and its schools. A total of 30% cited crime, drug addiction, increased accidents and attracting a “bad element” of people as reasons.

Among those who supported allowing commercial cannabis activity, 54% said it would generate revenue not just for the businesses involved but for the city through taxes.

However, respondents preferred mostly three types of cannabis businesses: medical-retail, delivery to private residences and product research and testing. Respondents were ambivalent regarding recreational-retail businesses, McLarney said.

In addition, if the City were to mandate allowing commercial-cannabis activity, the majority of respondents supported imposing health and safety laws, limiting business locations and establishing a cannabis-related business tax.

“The patterns we’re seeing in Signal Hill match what we see in other communities,” McLarney said. “Although residents and voters may disagree sometimes on whether we should allow cannabis or not to operate in our community, when it comes to the of if it’s there, should we regulate it and should we tax it, you tend to have overwhelming majorities say ‘yes’ to those things.”

McLarney said that after asking those more specific questions, the number of respondents who supported allowing marijuana businesses in the city increased from 45% to 50%. However, 20% were still hesitant because it depended on the type of businesses and whether they would be regulated.

“You’ve got about half who support,” McLarney said, adding that the ratio of those who supported to those who opposed is about five to three.

Shin-Heydorn said that the City would make the final survey public once it’s compiled.

Business survey
She also said that the City sent out a separate emailed survey to all 193 of Signal Hill’s businesses during a week in February and 12 responded, a 7% response rate.

“This is not for statistical purposes like the resident survey was,” Shin-Heydorn said. “This is just for informational purposes, […] to help round out the discussion.”

The results indicated a similar level of satisfaction and attitude to allowing cannabis businesses in the city as the residential survey— with five businesses supporting the idea, four opposing and two unsure— and for similarly reasons.

Shin-Heydorn also said the City has retained the consulting services of Avenu Insights and Analytics to study the financial impact of one or more types of cannabis businesses operating in Signal Hill.

After discussion, the council agreed to ask the firm to analyze all types of cannabis businesses, not just those that the surveyed residents favored. But it asked staff to report at the council’s first meeting in April on whether studying the entire field of cannabis businesses would push the consultant’s cost over its $15,000 contract.

Brad Rowe, Avenu’s director, said that the report will include a cost-recovery analysis covering inspection costs, administration, tax collection and compliance audits.

He noted that cannabis businesses have been financially beneficial to other municipalities and created jobs with growth opportunity, adding that there is a shortage of testing facilities statewide and that manufacturers and cultivators are looking for “shelf space,” or legal markets to sell their product.

The licensed marijuana market is just under $3 billion in size whereas the illicit market is estimated at $9 billion, Rowe said.

One resident, Randy Hartshorn, told the council that marijuana use in states where it’s legal has resulted in higher addiction and death rates among young people.

“Just because it’s legal, doesn’t make it right,” he said.

Council’s thoughts
Mayor Lori Woods also expressed hesitation at allowing cannabis businesses in the city. She said she was impressed by the professionalism of the facilities she visited as part of the Prop-64 subcommittee, as well as the livable working wage those businesses allow. But she wants to see evidence of revenue potential given the illegal market.

“I’m very glad that Signal Hill has taken a wait-and-see approach,” she said. “I don’t feel like we’ve missed any financial ‘boat’ by not having a policy yet.”

Councilmember Keir Jones concurred that more financial information is necessary, not just about revenue but costs and job opportunities for residents.

“What is the measure of success?” Jones asked. “For me, the measure of success is that we are helping foster […] a new industry in our city that is part of the community.”

Councilmember Tina Hansen raised further questions about staff and consulting costs during the evaluation process as well as zoning and how many facilities the city can accommodate given its other needs.

Councilmember Edward Wilson noted for full disclosure that he is currently the controller of a marijuana cultivating business in Long Beach, but said Signal Hill would benefit from the cannabis industry to generate revenue and diversify its tax base, which is currently heavily reliant on retail sales.

“All of the great things [the residents] say are going on in the City are paid by those taxes,” Wilson said. “If we didn’t have the revenue, we couldn’t hire the great people we have.”

The next Signal Hill City Council meeting will take place Tuesday, March 24 at 7pm in the council chamber at 2175 Cherry Ave.


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