Medical marijuana businesses ushered in through Costa Mesa’s Measure X will be required to pay close to $50,000 to apply for the necessary permits to operate in the city.
The City Council this week voted unanimously in favor of a fee schedule to implement the voter-approved initiative that allows marijuana businesses — limited to research, manufacturing, whole distribution, testing and transportation of medical marijuana products — to operate in an industrial zone north of the I-405 and west of Harbor Boulevard.
Costa Mesa will be the only Orange County city to allow manufacturing and testing of medical marijuana products.
No retail sales, cultivation or dispensaries are allowed.
“I’m satisfied that these fees are appropriate,” said Councilman John Stephens. “This industry is in fact going to make two-thirds of what South Coast Plaza is, and South Coast Plaza is in its fiftieth year.”
About a dozen medical marijuana businesses have expressed interest coming to the city, officials said. The city hopes to begin rolling out applications within 30 to 45 days, said city spokesman Tony Dodero.
The cost breakdown includes a $21,525 fee for a medical marijuana business permit, $27,508 for a medical marijuana conditional use permit, $341 for individual background checks and $59 for police fingerprinting.
If state and federal background checks are not available, the city can impose a $300 fee to have the work performed by an outside party.
Appealing the denial of a conditional use permit will run another $3,915, according to a city staff report.
The fees are in addition to a business license, which must be obtained by all businesses in the city, and its annual renewal. The medical marijuana business permit must be renewed every two years. The renewal fees for the marijuana business permit are the same as the initial cost, Dodero said.
At a town hall meeting earlier this month, potential applicants expressed dismay after being told the fees would range between $50,000 and $55,000.
Robert Taft, a Santa Ana marijuana dispensary owner who abandoned his own competing marijuana measure in favor of Measure X, said he had no problem with the fees, but wanted to begin the application process immediately.
“The biggest risk for my group is that we bought three buildings (in the industrial zone) and we’re just sitting and waiting,” Taft said. “We want to apply and we want to get going,”
The costs were designed specifically for medical marijuana businesses, to help the city recoup its costs for implementing the measure, officials said.
City staff will keep logs of the time spent to process the applications, said Assistant City Manager Rick Francis.
“We may come back to the council at a later time to further refine the fees that we’re assessing here,” he told the council.
Once business permit applications are submitted to the city, the next step consists of background checks on the principals followed by an application for a conditional use permit.
The Planning Commission will review the use permit, which is awarded on a discretionary basis, before making a recommendation to the council.
All fees are effective now except for the conditional use permit fee, which will be implemented beginning June 19.