The Sacramento City Council is taking steps toward getting the recreational marijuana industry off the ground.
In November, California voters approved Prop 64. and legalized the recreational use of marijuana. That was the easy part. Now, lawmakers and members of the marijuana industry will have to work hard to get the system up and running.
On Monday, the Sacramento City Council began accepting applications for licensed marijuana grow rooms. On the first day applications were accepted, the city received over 70 requests for cultivation licenses. It will likely take months before any permits are granted. The city has to verify that applicants are following all zoning requirements. No commercial grows will be allowed near schools, parks, and other restricted zones. Most of the permits are expected to be approved in industrial zones. Overall, the city is expected to grant 200 cultivation licenses.
“It really depends on how long it takes to get through the conditional use permit process,” said Brad Wasson, the city’s revenue manager. “That can be three months. Six months is about average. It could take longer if there are concerns.”
Last month, the City Council finalized the first year permit fees. According to The Sacramento Bee, it will cost growers $9,700 for indoor cultivation rooms with up to 5,000 square feet of space. The fees rise to $28,910 for grows between 5,000 to 22,000 square feet. Annual fees will drop slightly to a range of $8,240 to $26,630 for the second year. The application fees are expected to raise $6.3 million in revenue that will be used to regulate the marijuana industry as well as trying to shut down unlicensed grow operations.
There are additional licenses the city plans on issuing in the future. These include permits for five transportation businesses, four testing labs, and 30 marijuana delivery business. Dispensaries will also be permitted to offer their own delivery services.
The marijuana companies also will be subjected to the city’s 4 percent standard business tax in addition to sales taxes. Currently, Sacramento collects approximately $4 million in medical marijuana taxes per year. The city could ask voters to approve additional taxes on marijuana.