Signal Hill is taking its next careful step toward potentially allowing marijuana businesses to operate in the city– or not.
The city currently bans all types of cannabis-related businesses, including medicinal and recreational dispensaries, research and testing labs, product manufacturing, and indoor commercial cultivation.
During a July 21 meeting, the Signal Hill City Council approved issuing a request-for-proposals (RFP) for a consultant to assess the impacts to the city if it were to allow such businesses.
The main reason residents cited for their support was to increase and diversify the city’s revenue. Signal Hill currently depends on sales tax for about 70% of its revenue, making it vulnerable to economic downturns such as caused by COVID-19.
The council had decided at its May 28 budget workshop– amid discussing reduced revenue projections and cutting expenses– to allot $40,000 for such a consultant, City Manager Hannah Shin-Heydorn said.
The RFP indicates that the consultant hired will provide a detailed study assessing market demand, infrastructure requirements and environmental and community impacts for each type of marijuana business, Shin-Heydorn said.
The study should further provide five-year revenue and expense projections for each type of business, including tax revenue, permit- and license-fee revenue and administrative and law-enforcement expenses, she added.
It should also discuss impacts to crime, property values, traffic and parking, jobs, economic development and Signal Hill’s youth.
Proposals are due by Aug. 24 and staff will evaluate and make recommendations for council approval by Oct. 13, Shin-Heydorn said, adding that she estimates the study would be completed in about three months after that.
The council would therefore receive the study in early 2021.
City Clerk Carmen Brooks commented that since the cannabis business is dynamic, the study’s data may be dated by then. Brooks had previously expressed support for allowing marijuana dispensaries within the city for health purposes.
While most council members also voiced support for seeing concrete data to make an informed decision, Vice Mayor Tina Hansen expressed disapproval, noting she had also disapproved of budgeting for a consultant. She said that though surveyed residents supported the idea, they favored other types of businesses than those for which the council expressed interest.
Hansen also said Signal Hill residents had previously voted against cannabis businesses. However, Councilmember Edward Wilson– who has said he works for a cannabis business in Long Beach– clarified that residents in fact voted on whether the city should tax marijuana businesses when they did not even exist in the city. Measure F taxing medical-marijuana dispensaries in Signal Hill had failed in 2017.
Wilson added that Signal Hill residents joined the rest of the state in supporting Proposition 64 to legalize recreational marijuana. 64% of Signal Hill residents had voted in favor of the 2016 law.
“By the way, frankly, we don’t do this with any other business in the city,” Wilson said. “We never do that type of analysis.”
Councilmember Lori Woods said that she opposes allowing cannabis businesses in the city like Hansen, but wants to see the financial analysis to know whether the facts prove her wrong or support her opposition.
One member of the public– resident Randy Hartshorn– commented that marijuana businesses should be allowed only if they improve the overall quality of life in Signal Hill and fit the beliefs of its residents.
“The final decision, in my view, will be guided by the core values of our community,” Hartshorn said, noting that those values are not well known or prominently posted in city hall or on the city’s website. Mayor Robert Copeland offered that the values are apparent in the city’s strategic plan.
Hartshorn also asked that other costs be considered, such as adolescent addiction and the cost of eradicating the black market for marijuana.
Hartshorn suggested analyzing comparable cities that have allowed cannabis businesses, which Shin-Heydorn said was already included in the proposal request that Hartshorn and others in the community had helped formulate.
Wilson motioned to approve issuing the RFP and Councilmember Keir Jones seconded it.
The council approved the recommendation in a 4-1 vote, with Hansen the only dissenter.
“We’ve had a really measured and careful approach,” Jones said. “We haven’t jumped onto the cannabis bandwagon as a city because we wanted to see what’s going on around us. We wanted to see how healthy– financially– the industry is, and we wanted to make sure we understood the impacts in order to make a decision at all– one way or the other.”