Are city of Los Angeles officials trying to clear a new high bar of misunderstanding what it is to be a local business sector enduring severe financial malaise?
Because the last thing ordinary people would bring upon such a sector, which employs hundreds of Angelenos and pays local landlords their rent for over a thousand shops around town, is a large new fee aimed specifically at their businesses and no others in the city.
Legal cannabis businesses saw an over 10% drop in sales last year, the city of Los Angeles’s cannabis department says, which most analysts say is a result of price-undercutting by old-fashioned, unlicensed weed dealers.
And so what does City Hall do? Hike pot-shop annual license-renewing fees by thousands of dollars a year to help with the city bureaucracy’s own overall miserable balance sheet, which faced a billion-dollar deficit earlier this year.
“A license renewal will jump to $12,617 from $8,486. A temporary approval renewal will rise to $6,294 from $4,233, and a record renewal will increase to $2,719 from $1,829,” the Los Angeles Times reports.
When setting up its cannabis department, which oversees marijuana quality regulations, including important health-related ones, the city mandated that its costs be covered not by the general fund but by fees from the industry itself. That’s fine, in theory. But it would be nice to see the department consequently be an efficient operation. Instead, the Times’ Noah Goldberg reports, “Since the department first authorized fees in 2020, its staff has grown from 37 to 63 members. In addition, through collective bargaining agreements, their salaries have increased 19% since 2020.”
The problem, as with all local business taxes within the city, is that you can only squeeze so much out of the goose that lays the taxed egg. When legal sellers of marijuana are already going out of business, this will only hasten that decline.
One local businessman formerly ran three pot delivery businesses in the city, two of which he’s had to shut down. He’s now thinking about closing the remaining one, Bonafide Delivery in Sun Valley, because of his fee increases and low profit margins. The City Council once again has punched local businesses onto the fiscal ropes.