City Adjusts Number of Cannabis Business Applicants Downward, Says Fees Only Cover Portion of Costs

Published : Friday, February 15, 2019 | 5:41 AM

All that is revenue is not profit.

That seems to be the City of Pasadena’s message about the recent windfall of funds derived from the many applications it received for six retail dispensary, four growing facility, and four testing lab cannabis business licenses to be granted within its jurisdiction.

The original number released by the city manager’s office was 128 applicants, but on Feb. 14, City spokeswoman Lisa Derderian adjusted the number of applicants downward to 120. That means the city, charging $13,564 per nonrefundable application, took in a total $1.64 million in application fees.

Dederian sought to make clear all that glitters is not gold, noting, “The city has not made any money to date.”

Hundreds of hours, she said, in consultant and staff and city attorney time developing the ordinance and application materials have been booked. Additional costs are anticipated for the reviewing and scoring of applications, she said.

“These costs have been incurred or will be incurred regardless of the issuance of any permits,” said Derderian. “Sunk costs, if you will.”

The aforementioned $13,564 commercial cannabis screening application fee captures, “a portion of these costs,” said Derderian.

She confirmed that the consultant hired by the City to help it through the marijuana morass, HdL Companies, has been paid $250,000 for its services.

“This contract,” Derderian noted, “will have to be amended to reflect the final scope and number of applications reviewed.”