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Cannabis business applicants to pay at least $80k to get started in SLO

Posted at 6:11 PM, Nov 29, 2018

The City of San Luis Obispo will soon have cannabis dispensaries but prospective businesses that want a piece of the pie will have to shell out a large amount of cash.

The SLO City Council approved a set of guidelines at its Tuesday meeting that include the amount of fees and annual costs, as well as the criteria for approving applications.

Dr. Kirk Azevedo, a longtime Cambria chiropractor who has recommended CBD products to his elderly patients, said he’s excited to jump into SLO’s budding cannabis industry.

“It’s just exciting to be able to come into this industry, to use my health and ag background to bring something to the people that can really help people,” said Azevedo, a member of the Central Coast Cannabis Council.

Azevedo believes his application, which he can file between Jan. 7 to Jan. 29, will be especially appealing to the council because of his plans to market marijuana medicinally.

The council decided it would give preference to applicants with at least five years experience, those who plan to employ 90 percent locals, and a promise to give back over $1,000 annually to the community.

“It really favors local operators, local cannabis operators,” said Megan Souza, a member of the Central Coast Cannabis Council.

Souza already operates a marijuana business in Morro Bay but she wants to expand her sales.

While Souza said she’s pleased with the council’s criteria, she has one hang-up: the fees.

“It’s certainly a number we weren’t planning for,” Souza said.

The council agreed to charge more than $22,000 per application and between $65,000 and $90,000 annually to operate. Those fees are among the highest in California.

“The costs are not high for the purpose of weeding out applications in any way,” said SLO Community Development Director Michael Codron.

Codron said the fees are designed to cover 100 percent of the costs associated with operation, such as increased policing, application evaluations and processing, so taxpayers aren’t on the hook.

In comparison, fees for cannabis business operators in Oakland are as low as $2,700, Grover Beach fees start at $5,000 and applicants pay as low as $1,000 in Monterey County.

A recent KSBY report on the status of cannabis industry licensing in Lompoc found applicants are charged a fee of about $11,000.

In its city cannabis fees comparison sheet, the council noted just one city with a higher fee schedule. San Jose applicants are charged more than $100,000 to apply for a license.

Dr. Azevedo said the fees may be a bit high, but that’s the cost of living and working in a beautiful place like the Central Coast.

“This is such a beautiful place to live. I see those things as a beauty tax,” Dr. Azevedo said.

According to Codron, the council may decide to decrease the fees in the future if it’s determined that the costs of managing the cannabis operations are less. Codron also said the council directed his office to consider a lower fee tier for “cottage industry” or small businesses.

City officials expect to evaluate about 20 applications once the process is open. The city will only permit three retailers to operate within city limits.