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Marijuana Windfall For City Pans Out Early

Published on Monday, February 11, 2019 | 6:38 am

Pasadena’s City Manager reported Feb. 7, that 128 applications had been submitted to Pasadena’s commercial cannabis program.

Applications were priced at  $13,654 each by the City. The total collected, less refunds to applicants whose documentation was incomplete and could not be accepted, was expected to reach about $1.7 million.

Of the 128 hopefuls, only six retail dispensaries, four growing facilities, and four testing labs will ultimately be approved by Pasadena.

“That’s good for the city,” said Chris Berman, chief operating officer of SoCal Building Ventures, which met the deadline with an application for its high-end cannabis concept, Atrium.

Also good for the city will be the final processing fees paid by the chosen applicants, at a cost of $10,637 each.

All that comes before a single penny in sales tax from the future outlets has been collected, which is supposed to be where the real money is.

Measure CC, approved by voters in June 2018, established a 6 percent tax on gross receipts from retail operations, 4 percent on gross receipts from other types of businesses (laboratories, growers), and $10 per canopy square-foot for those cultivating the plants.

Measure CC ballot language projected annual revenues to the city of between $1.4 million and $2.1 million.

Berman said he was anticipating the number of applicants to have been between 70 and 100.  “I am not surprised at all,” he said in a Feb. 8 interview. “Pasadena is a very desirable market.”

Surprised or not, Berman admitted 128 are a lot of applications. “Especially when you consider each one of those groups had to pony-up close to $14,000 just to submit it,” said Berman, “plus the money spent putting the application together.”

He pointed out that the 128 number did not necessarily represent applications for retail outlets alone, that there probably are cultivation and laboratory entrants to the permit sweepstakes as well.

The next step is a review of the applications which, the city manager’s report said, will be scored against the established review criteria.

Pasadena, the report said, has retained HdL Companies, “an industry leader in providing cannabis management services to municipalities, to review the applications.”

HdL’s website observes that cannabis legalization presents communities with some enormous opportunities” – which would appear to be true – and some “intimidating challenges.”

The company says that its cannabis services team, “has worked extensively on these issues for local government institutions, developing an intimate understanding of the critical interactions needed between city staff, public officials, legal counsel and other key stakeholders.”

Among the services offered by HdL are initial consultation, regulation development, application development, post-licensure compliance, and tax administration.

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