California’s next cannabis battle may be coming to a city near you

“It cheapens a high-end beach town,” said Charlene Harding, 59, a retired government worker who moved to Manhattan Beach two decades ago. Though she has “never even puffed,” she said she did not care if others smoked — within reason: “I hate when I go to the beach and it smells like skunk.”

The opposition is far from universal, however, despite what city officials say they have heard.

David Sulaski, 54, a retired investment banker who has lived in Manhattan Beach for six years, said the city was full of “fun-loving people” who would embrace dispensaries.

“This is a community that likes to have a good time,” he said as he walked his dog down Manhattan Avenue in the city’s commercial center. “I don’t know why we make decisions that fly in the face of those things.”

 

 

Sulaski, who uses cannabis “every day that I can” and gets it delivered, said it was silly to make people go elsewhere to buy cannabis when Manhattan Beach could benefit from the tax revenue.

“We don’t expect our freedoms to be restricted in California. We could live in a red state for that,” he said. “Just give people what they want.”

‘Weed doesn’t change that’

Tax revenue may be the most compelling reason for cities to finally allow retail sales. Officials in Redondo Beach estimate that each license could generate as much as $1 million per year for the city.

State regulations also require testing cannabis products to ensure they are free of contaminants before they can be sold in licensed dispensaries, a safeguard that does not exist on the illicit market.

Derek Glunts, who grew up in Manhattan Beach, began smoking in high school and bought cannabis that he said was cut with chemicals at an illegal dispensary that presented itself as a church.

“Every single product they sold there was fake. They would turn black within a week and genuinely our lungs would hurt afterwards.” Glunts said. “I had a friend who was coughing up brown stuff from his lungs repeatedly for weeks and weeks after smoking some of the stuff he bought.”

The 21-year-old student was recruited last year to serve as the proponent for the Manhattan Beach initiative by a childhood friend, who had already signed on as a proponent for the petition in Redondo Beach. Both were longtime customers at Catalyst Cannabis.

 

 

Glunts, who has a medical cannabis prescription to treat anxiety and depression, said he enjoys smoking because “it takes the edge off things” and connects him to a community, though he has been taking a break in recent months to focus on his mental health.

Not even old enough to vote when Prop. 64 was on the ballot, Glunts said he was proud to be starting a conversation around cannabis use in a community that has long acted as though it wasn’t happening there. His family is in full support, he said, and the response has been overwhelmingly positive, aside from elitist and traditional residents who worry about riffraff coming to Manhattan Beach just to buy cannabis.

“The biggest battle is just getting over that stigma, that image,” he said. “Weed doesn’t change that. It’s not like weed’s going to come in to Manhattan Beach and all of a sudden, the schools are going to start performing poorly, people are going to move away, we’re going to have a bunch of bachelors move in. That’s not the reality.”

‘They’ve had six years to figure this out’

The Catalyst Cannabis team’s strategy was to target places where support for Prop. 64 was high and “city councils were just dithering and failing to act,” Lewis said. 

Splitting the approximately $300,000 cost with another cannabis brand, Tradecraft Farms, they circulated petitions last year to overturn the bans on retail sales in the four beach cities. Once they collected signatures from at least 10% of registered voters, officials could either adopt the ordinances as written or put them to the ballot.

Their model was El Monte, a city in the San Gabriel Valley where the team first tested this blueprint three years ago. After presenting the city with enough signatures, the council ratified the ordinance, rather than hold an election, because the voters had already affirmed their support for legal cannabis with Prop. 64. The first dispensary, operated by Catalyst, opened last October.

None of the cities in the South Bay followed suit, however. The firm resistance caught Lewis by surprise, and he said he regrets not engaging with local officials to try to get them on board before launching the initiatives. He acknowledges that the sneak attack may have undercut any opportunity to reach a compromise and avert an election fight, though he also believes “incompetent” council members are using his approach as an excuse for their underlying opposition to cannabis.

“It just hits them in a way that they’re not used to. But I am who I am,” he said. “They’ve had six years to figure this out.”

While Manhattan Beach plots to uphold its ban on retail cannabis sales, its neighbors have not gone quite as far in their opposition. Hermosa Beach and El Segundo, which are set to vote in November on allowing two storefronts each, are considering adding competing measures to the ballot that would create a local cannabis tax or allow dispensaries under more restrictive rules.

Redondo Beach, the biggest of the beach cities and the most valuable potential prize among them, has signaled the most openness to the commercial cannabis market. 

Before banning retail sales in 2017, the city council deliberated allowing dispensaries, and it established a steering committee to continue exploring that option. The local mall, the South Bay Galleria, has been particularly enthusiastic about serving as a potential site as it struggles to recover from losing its anchor department store.

Those discussions, however, languished for years, which the Catalyst team cited as an impetus for taking the issue to voters. Redondo Beach Mayor Bill Brand, who has used cannabis to treat the nausea from chemotherapy for lung cancer, said the city always planned to repeal the sales ban, but it was not a priority, especially during the coronavirus pandemic.

“I haven’t had people in the community beating down on our door to do anything,” he said. “We tend to focus on things the community’s concerned about.”

‘Slash-and-burn strategy’

The qualification of Catalyst’s initiative, which would allow as many as three dispensaries in Redondo Beach, has made it unavoidable.

City council members punted the measure to the March 2023 ballot, giving them more time to finish developing their own ordinance based on recommendations from the steering committee. That more restrictive framework — which would only allow two retailers, impose a 5% sales tax and establish a 1,500-foot buffer zone around schools — is on track for approval as soon as August.

Councilmember Zein Obagi Jr. said the city wanted to strike a “reasonable” balance that would better accommodate feedback from residents, many of whom he said do not oppose cannabis but are wary of a dispensary opening near where they live or their children walk to school. Like other local officials in the South Bay, he vehemently opposes the proposal from the Catalyst team, which he calls a “slash-and-burn strategy” to create a commercial cannabis monopoly.

“They framed this initiative to virtually give themselves a license,” Obagi said. “This didn’t sit right with any of us.”

These accusations set Lewis off. He repeatedly denies that he is trying to establish a monopoly — yet he admits there are criteria written into the initiatives that would benefit Catalyst when applying for a dispensary license. The system cities would use to evaluate applicants, for example, awards points for being a union operator, which Catalyst is. The company already leases properties in Manhattan Beach and El Segundo that fall within the eligible areas for cannabis businesses.

“We’d be stupid if we didn’t try to take a little bit of an advantage,” Lewis said. “But those self-serving things are very, very mildly self-serving.”

Now, tensions between Catalyst and the beach cities are only deepening — Lewis is circulating a petition to recall Obagi, whom he calls “fake” and a “douchebag” — and it seems increasingly likely that they are headed to a campaign showdown. That means spending more money on a political fight that Catalyst and its allies cannot use to build out their businesses.

Still, it may be worthwhile for Lewis, who said he could probably pay off what he’s invested in the initiatives with just one new store in the South Bay, though he worries that the city officials will scheme to block his applications for a license.

“They’ll make sure I lose,” he predicted. “On a good day, if I get one or two, I’ll be f—ing happy.”

And despite the bad blood his approach has generated, Lewis is ready to try again, perhaps with some slight modifications. He said he’s considering targeting as many as 10 more cities across California over the next year.

“If the initiative is bad, step the f— out of the way,” he warned. “It’s called democracy. Let the voters decide.”