The Myth of a Cannabis Windfall for Local Tax Coffers
Updated: Mar 2, 2019
By Carrie O'Malley
During the last Irvine City Council election some candidates started to bang the drum of attracting marijuana shops to Irvine as a source of new tax revenues for the city. As a candidate, I was absolutely against this. I do not believe that our city should be host to marijuana dispensaries. There may be an uptick in crime in and around marijuana dispensaries. In addition, when children and youth are exposed to such businesses it may promote marijuana use. Although, now legal, marijuana is still a drug that impairs judgment. With marijuana shops in local jurisdictions, cities that host such shops may start seeing an increase in DUID's and impaired driving that can lead to injuries and deaths. As we move closer to 2020 where the issue is likely to resurface in debate, the Irvine Taxpayers Association wants to make clear our unequivocal opposition to this idea, not only on the grounds of it being bad public policy for Irvine, but also on the grounds that there is actually very little new revenue to be collected from the issue.
In the days prior to marijuana legalization in California the mantra of some cannabis advocates was probably something like “legalize it, but regulate it; and tax it just like any other business.” Somewhere along the line this became the position that won the day for Proposition 64 in 2016 - the initiative that ushered in the era of marijuana legalization.
It turns out that regulating the cannabis industry in California has been about as successful as the high-speed rail project. A large percentage of cannabis producers have turned away from the legal process the state established for licensing and distribution of the product, creating a downward spiral for the legal marijuana industry in California. Unfortunately, many producers are choosing to remain “dark” by continuing to grow and sell illegally rather than opt into the regulated market. For legal distributors, that’s a shaky business model that at best leads to cutting corners, and at worst undermines the entire business model of the legal cannabis storefront. Cannabis isn’t a solution to any local tax revenue woes.
As a matter of public policy, the Irvine Taxpayers Association believes strongly that good zoning laws are the nectar of a strong local economy. Irvine’s master plan has been incredibly successful at attracting world class companies and employers to Irvine. We enjoy some of the safest streets in the nation and highest quality of life. These things didn’t happen accidentally. Irvine has thrived by carefully attracting high value employers to contribute to our tax base.
And let’s face it, nobody wants to live next to a cannabis shop. That’s true of residents and it’s also true of our major employers whose brands and corporate missions are intrinsically tied to Irvine’s reputation and quality of life. There are enduring questions about the burden that cannabis shops put on our public safety resources. The safety of our children, families, communities, and City should always take precedence to any source of "tax revenue." We should never jeopardize our community's safety for extra tax dollars. Because the regulation of the cannabis industry is still such a long way from actually ending the outlaw culture of the industry, law enforcement is still a long way from making sure the streets surrounding cannabis shops are safe.
Irvine isn’t the appropriate place for legalization experiments with an industry which is a poor fit for our neighborhoods and existing businesses. The drawbacks of cannabis shops in Irvine far outweigh any tax revenue that may be generated, and that doesn’t look like it will change anytime soon. We urge current and future Irvine leaders to cast aside this idea quickly so that we can have a more fruitful public discourse over the future of Irvine.