It could cost $10,368 to submit an application in a bid to secure one of three permits the City of Manteca will issue later this year for legal storefront cannabis sales.
That fee is not a part of a Community Benefit Agreement (CBA) fee the city would hammer out with approved applicants before they are issued actual permits to do business.
It simply covers the staff time and vetting expenses the city will incur in order to process the applicant.
Then, if they are successful, there is a $24,663 annual regulatory fee that will cover city costs incurred with keeping track of how the dispensary operates as well as its sales.
The rest of the proposed draft fees that will go before the council in the coming weeks includes a $2,844 appeal process fee and an annual $115 application renewal fee.
Background investigation fees are $300 for the owner/manager with a $100 fee for an annual background investigation. There is a $100 fee per employe to cover background investigations. The annual renewal background investigation fee is $75.
Data indicating the amount of cost, or estimated cost, required to provide the service for which the fee or service charge is levied and the revenue sources anticipated to provide the service is available upon request.
In other words, the fees reflect what expense the city occurs vetting applicants that include how the business will be operated, security, and other measures as well as doing background checks.
At least one potential applicant has indicated that he does not think it is fair.
He compares the cannabis applications to other businesses.
“A business license is $25 for all business types but for cannabis the fees are $10,368,” he wrote. “This is a 41,000% increase! This is based on nothing more than the City anticipating dollar signs from large cannabis companies — but this goes against the will of the voters who voted for Prop. 64. One of the tenants of Prop 64 was to lower barriers to entry for the most vulnerable victims of the War on Drugs. Manteca is choosing to ignore the will of the voters and pay themselves for a process that isn't that complicated.”
The $10,368 fee, though, is not a business fee. It is an application fee to cover reasonable steps to make sure the city has oversight of security and money to protect the public’s interest.
The CBA, for all practical purposes, is the “business license.”
The CBA would be required of all storefront marijuana dispensaries allowed in Manteca. They would “memorialize” the marijuana business’ commitment to turn over a certain amount of their profits each year to the city.
The city would then use the CBA take “to fund services, positions, and for other purposes that benefit the community.”
That essentially means anything the city wants to use the funds on.
Eliminates need for voter
approval for local pot tax
Such an approach effectively eliminates the need for voter approval in order to put a tax in place as required under California law. Jurisdictions that have gone the traditional taxing route needed to secure a two thirds approval. Typically to get support they had to develop specific spending targets such as for youth and senior programs and in some cases even to fund drug addiction programs.
The CBA receipts would be on top of the 8.25 percent sales tax rate per dollar spent that includes 1% that goes to the city’s general fund and half cent that goes to public service expenditures. The 8.25 percent sales tax includes the half cent Measure K countywide roads and transit tax. The rest goes to the State of California.
The sales tax and CBA assessment would be on top of a 15 percent state cannabis tax on the gross receipts of any retail sale. There is also a state cultivation tax of $9.25 per ounce for marijuana flowers and $2.75 for marijuana leaves.
The CBA came up as the preferred way to benefit the Manteca community in exchange for allowing retail storefront cannabis sales after municipal leaders researched what other cities have done.
To contact Dennis Wyatt, email dwyatt@mantecabulletin.com
