Approved Commercial Cannabis Operations Will Pay $24,293 in Set Up Fees to City

License applications will cost $13,364; those awarded permits will also pay an additional processing fee of $10, 639

Published : Tuesday, October 30, 2018 | 5:19 PM

Pasadena’s City Council on Monday set fees for marijuana-related enterprises which want to do business in Pasadena.

Applying for a commercial cannabis license n Pasadena will cost applicants $13,654, following a unanimous Council vote.

But only six applicants will be approved by the City to actually move forward and obtain a permit to operating. For those which are selected, an additional processing fee for the permit of $10,639 will be levied.

Ballot Measure CC, passed in June of last year, allowed a limited number of cannabis retailers, cultivators, and testing labs to operate within specific zoning areas in the City, according to a staff report presented to the Council by Management Analyst Alex Hernandez.

Measure DD levied a business license tax on commercial cannabis businesses of up to $10/canopy square foot for cultivation, and between 4 to 6% of gross receipts for retail sales.

Pasadena is allowing three types of cannabis licenses—retail, cultivation, and lab testing.

There will be a maximum of six retailers allowed within the City at any one time, and no more than one retailer within any one Council District.

The retailers may not be located within 1,000 feet of any other cannabis retailer, and may not be located within 300 feet of any residential zone, or Cannabis lab, or within 600 feet of any park, K-12 school, church, childcare center, substance abuse center, or library.

Deliveries may be included as part of their retail sale.

Cannabis cultivation labs will be limited to four city-wide, and similarly only one per district. Cannabis labs will be limited to 30,000 square feet in size, including office space.

A cultivation license would allow cannabis to be planted, grown, harvested, dried, cured, graded, or trimmed, or any combination of those activities.

Finally, four testing labs will be permitted.

These labs would be accredited by an independent accrediting body and licensed by the California Bureau of Cannabis Control.

Because of the limitations imposed on cannabis locations, such as proximities to schools and day care centers, for example, potential amendments to the City’s zoning map may be presented to City Council for consideration.

The staff report noted that the City engaged a financial consultant, MGT Consulting Group, to conduct a fee service study. MGT met with key departments to determine costs, develop a fee methodology, and document City processes associated with commercial cannabis.

MGT also reviewed the adopted ordinances and ballot measures to calculate costs of anticipated City activities associated with the new cannabis regulations, said the staff report.

As David Reyes, director of community planning and development, explained to the Council, several City Departments are involved in developing an application procedure, the permittee selection process, and general administrative procedures for commercial cannabis permits and the collection of taxes on cannabis products. The offices include the City Manager’s Office, the City Attorney’s Office, the Police Department, the Health Department, the Finance Department, the Information Technology Department, and the Planning and Community Development Department.

“We are trying to recover these costs with these fees,” said Reyes.

According to the City’s cannabis ordinance, administrative regulations and processes must be in place no later than January 1, 2019, according to the staff report.

“It is necessary to amend the fee schedule now,” the report noted, “ so the new fee will be in effect on January 1.”

The City will host a workshop on November 13, 2018 to prepare for January 2019 launch of the 30-day commercial cannabis application window.

The City will have a 30-day application window. Interested operators would be required to file a complete application and pay the necessary Commercial Cannabis Application fee.

Separate Livescan fees for background screening and a City review of background results, will use the City’s existing fee schedule. Also, the number of background checks to be performed will be based on the number of owners or managers per business, and the overall number of applications, according to the staff report.

Based on the limited number of commercial cannabis licenses that would be issued in the City, the report noted, only the top ranked operators would be eligible to identify business locations and seek land use entitlements.

The timeline to receive entitlements will vary but are estimated to take 3-9 months. Top-ranked operators would pay a Commercial Cannabis Permit Processing Fee, and then proceed with the next phase of the process.

Issued permits would be non-transferrable and all permitted businesses would be subject to a mandatory review after nine months of operation.

In addition, according to the ordinance, all permits would require renewal on an annual basis to ensure operations are compliant with all requirements.

Following land use approvals, an operator would then be required to obtain any other relevant approvals, such as from the Public Health Department.

Once those approvals are granted, and the operator obtains a business license from the City for tax revenue collection purposes, the operator would then be eligible to complete the State’s commercial cannabis license process and actually begin cannabis sales in Pasadena.







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