COULD PASADENA’S CANNABIS APPLICATION PROCESS SIGNAL A NEW, COMMON SENSE APPROACH TO REGULATION?
By Steve Crane
On June 5, 2018, Pasadena voters approved Ballot Measures to allow a limited number of cannabis retailers, cultivators, and testing labs to operate within specific zoning areas in the City.
In response to the voter mandate, City staff developed the application procedure, permittee selection process, and general administrative procedures for the issuance of commercial cannabis permits and the collection of taxes on cannabis products. The city made application documents available to prospective licensees on December 14, 2018, and the application is available on the city’s website until January 31, 2019.
Up to six (6) retailers, four (4) cultivation sites, and four (4) testing labs will be permitted to operate at any one time in Pasadena. The City will utilize a merit-based approach to selecting which applicants will receive these commercial cannabis permits. The screening application will be fairly typical: information about the applicant’s ownership/management team, proposed business plan, security plan, and experience is all required.
While Pasadena is coming late to the cannabis game, its application process has one crucial difference from most cities’ cannabis applications – applicants do not need to have secured a physical location to submit a screening application.
This one simple innovation has caused many in the industry to stand up and cheer. In other municipalities, most notably the City of Los Angeles, applicants are required to have property secured in a cannabis-zoned area. While the City dawdles on enacting its cannabis regulations, prospective licensees are on the hook to pay outrageous monthly lease payments on empty storefronts.
Greedy landlords in these areas, all looking to jump on the Green Rush express, charge anywhere from double to 5 times the monthly lease price that the location previously garnered.
Any why not? Every level of regulator from state to county to local obviously assumes that cannabis is more valuable than diamonds or precious metals. They charge layer upon layer of tax on cannabis operators with no basis in fact. There is no common sense in this policy, no regulator has seemingly bothered to run the numbers on the cannabis market and relative profitability in each sector.
Sure, Pasadena is going to take its cut. 4-6% off the top. But the fact that they are allowing successful applicants one year to locate property is a signal that they have actually considered the economics of the businesses they will be licensing.
Lease payments in Pasadena will be very high, that is a given. But at least applicants will not be forced to pay them while the city of Pasadena implements its regulations.
Bravo, to the City of Pasadena. Hopefully this will be the start of a new trend toward a more common-sense approach to the regulatory regime for California’s cannabis industry.
About the Author:
Steve Crane is a Board Member and Executive Vice President at Emerald Spectrum Holdings Inc., the corporate parent of 420 College.
About 420 College:
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