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Cities are banning commercial "Cannabusiness"


Almost a year after the implementation of Proposition 64, California residents aged 21 and over are legally using and growing marijuana. But where are they buying their cannabis?


On Aug. 8, 2017, Beverly Hills banned cannabis businesses from operating within its borders.

Beverly Hills resident Nicole Newman must travel to neighboring West Hollywood to purchase her marijuana from dispensaries like MadMen.


“There’s the issue of access and equity even for rich people,” said Lynne Lyman, former California State Director at Drug Policy Alliance. “Why should they be denied access to commercial cannabis just because they live in a nice, beautiful city? Why should they have to get in their car and drive all the way to West Hollywood?”


Since state legalization, 338 out of 428 cities in California, almost 80 percent of the state, have prohibited cannabis business. This is allowed under Governor Brown’s Senate Bill 94, which grants local jurisdictions final authority over business permits and licenses.


Prior to the 2016 election, California was bifurcated between jurisdictions that really wanted legalization and those that didn’t.


“One of the mistakes we made with Prop. 64 was giving so much local control to cities,” Lyman said. “It wasn’t our policy preference to allow local control, but it is a political reality that California is a local-control state.”


Cannabis advocates and state officials were surprised when California’s 2018 mid-year tax collection brought in $82 million, far below predicted projections at $175 million. Many point blame at the cities and their local regulations.


In 2016, 64 percent of Beverly Hills voters approved Proposition 64 compared to 57 percent statewide.


When the ballot approved Proposition 64, the Beverly Hills Planning Commission proposed its own Ordinance No. 17-O-2734. This local policy was strongly against commercial cannabis but still allowed residents to use marijuana recreationally.


When Newman voted in favor of Proposition 64, she foresaw the immense revenue in the industry. Now she worries how the cannabis industry might change her community.


“My only concern is it will take away the prestige associated with Beverly Hills,” Newman said. “Marijuana has a negative association, like a low-class, and I think maybe that’s what the city is concerned about.”


Cheryl Shuman, the founder of the elite and exclusive Beverly Hills Cannabis Club, wants to change this perception. When she started the club in 1996, she wanted to keep it small, elegant, and upscale. It was invite-only and limited to 100 members, mainly consisting of Beverly Hills’ celebrities. But she grows her marijuana farm up north because of her city’s regulations.


“I knew at some point we could take cannabis mainstream. My whole mission has been to mainstream cannabis, to make it acceptable, and make it glamourous,” said Shuman.


She has since been named the Cannabis Queen of Beverly Hills by the New York Times Magazine.


She takes pride in her cannabis accessories. “I have vape pens. I have my diamond and my ruby pens. They’re more like pieces of jewelry.”


When Shuman founded the Beverly Hills Cannabis club, she created her brand for what cannabis could be one day.


“I’m very proud to say that Fortune magazine named me the most powerful women in the legal pot industry. I am very proud to be a woman, to be in this position, to have had that kind of impact to change the course of history.”


When Shuman was diagnosed with cancer, she didn’t know how long she would have to live. She depended on cannabis oil to survive. As someone who’d never had a beer or used drugs, no one expected her to be a cannabis person. “But I use cannabis every day,” she said proudly. 


After recovery, Shuman regretted “coming out” as a cannabis user. No one wanted to hire her, because she was associated with the stigma and companies feared the stench it would leave on them.


“The only thing I could do was make it mainstream, and make it successful,” Shuman explained. “And now it is, and look how fast it has grown!”


Newman also believes over time marijuana will become normalized as younger generations grow up with it. She envisions Beverly Hills attracting a market for high-end cannabis products in the future.


“I can imagine them going in a more discrete way,” she said, “like microdosing or maybe some nice edibles and designer mints. I can see that type of market really finding its niche in Beverly Hills.”


Advocates, like Lynne Lyman, pushing for Proposition 64 say they fought for more than the freedom of recreational use. They fought for medical patients to have safe and legal access. They fought for an opportunity for impacted people with previous convictions to receive support services from their cities and governments. They hoped it would allow people currently in the illicit market to transition out, and raise the maximum revenue to assist these initiatives. 


But City Senior Analyst Cindy Owens explained as long as cannabis is illegal under federal law, Beverly Hills doesn’t want these businesses operating in their city.


“I can’t fault any city that says we don’t want to directly disobey federal law,” said Lyman.


The Beverly Hills City Council is also aware of the other challenges this conflict brings. By classifying marijuana as a “Schedule 1” drug under federal law, banks could be charged with money laundering if they accept these transactions. They could be sanctioned or shut down by the federal government. This means cannabis businesses must collect everything in cash, and large sums of cash lying around incentivizes crime and robberies, explains Owens.


Lyman said the only way to reduce crime and children’s access to drugs such as marijuana is by eliminating the illicit market altogether. As long as cities continue regulating and banning commercial cannabis, an underground market will persist.


In Los Angeles alone, there are currently 169 businesses operating legally. But Lyman claims L.A. county is still riddled with illegal shops.


2018 marks the first year since state legalization in California, and while local governments are hesitant about the changes this brings, their residents are excited for its opportunities.


“I’ve seen a lot of amazing people from the entertainment world who want to do something in cannabis,” said Lyman. “A real cross section of people are throwing their hat in the ring.”

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