Marijuana Co-op Fees Getting High

By Harry Saltzgaver, Gazettes Town-News
May. 17, 2010

Perfect example of how the government uses regulations to put people they don't like out of business.Operating a nonprofit medical marijuana cooperative or dispensary in Long Beach is about to get expensive.

At Tuesday’s City Council meeting, the council will be asked to approve fees and charges as part of the Medical Marijuana Collective Implementation Plan, managed through the Department of Financial Management. While the plan itself likely will be discussed as well, the fees are what the council must formally approve.

The initial application fees, according to Director of Finance Lori Ann Farrell, are designed to recover costs of several city departments incurred while processing the application. Those departments include Financial Management, Police, Fire, Health and Development Services. The revenue will be disbursed to the departments proportionately, Farrell said.

The proposed initial application fee for any marijuana collective is $14,742. If there is an application for a separate cultivation site, another $11,584 will be charged.

The $26,326 is only the first city payment required. The staff report recommends an annual regulatory permit fee as well.

The fee depends on the number of members (patients or caregivers), starting at $10,000 annually for organizations with 500 or fewer members. The annual fee jumps to $20,000 from 501 to 1,000 members, $25,000 for up to 1,500 and $30,000 a year for those with 1,501 or more patients.

After several months of debate and legal wrangling, a divided City Council passed an ordinance March 8 to regulate medical marijuana collectives or cooperatives in the city. That ordinance, passed on a 5-4 vote, required collectives to grow their own marijuana somewhere within the city. That was a compromise between law enforcement officials who wanted the marijuana grown only on site and advocates willing to allow the marijuana to be grown anywhere in the state.

Other restrictions focus on the location of the dispensaries. A dispensary cannot be located within 1,000 feet of any school, or the same distance from another dispensary.

When the requirement for an ordinance passed, the council said all collectives had to follow the new law, with none being “grandfathered.” However, the council did agree to a 120-day period once the plan is in place for cooperatives to come into compliance.

While the formal action Tuesday is only to approve the new fees, there also will be a report on implementing the plan. According to the staff report, there will be six steps in the program:

1. Public workshops to educate potential collectives about the application and permit process.

2. Establishing an application period.

3. Creating site review and inspection timetables.

4. Public noticing.

5. Regulatory permit hearings.

6. Final operator selection process.

Tuesday’s fee approvals will be a public hearing near the beginning of the meeting.












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