Dispensary owners face massive fee increase, little time to fight it before possible vote

Owners of retail marijuana stores in Palm Springs, including Lighthouse Marijuana Dispensary, 395 N Palm Canyon Dr., would be subject to a 900 percent increase in annual license fees if a proposal being considered by elected officials is enacted as part of next year’s city budget.

Owners of two dozen local retail cannabis businesses, already required to charge high taxes on the sale of their products, may soon experience additional sticker shock just for the right to open their doors. A proposal making its way through Palm Springs City Hall calls for some of the fees they pay the city to rise by almost 900 percent.

The proposal, outlined in a staff report being discussed Thursday evening at a regular meeting of the City Council, calls for annual cannabis business permits to increase from $1,000 to nearly $11,000. New cannabis permit applicants would see a similar hike — from $4,092 to the same nearly $11,000 fee. The city currently has 67 existing cannabis permits for both retail dispensaries and grow operations. It collected $2.8 million in sales tax revenue from dispensaries in the last fiscal year.

The fee hikes are necessary, city staff explained in the report, in order to help pay for two new code enforcement officers dedicated specifically to helping the city meet state requirements for inspection and regulation of cannabis businesses.

“It is acknowledged that this fee is a significant increase over the current fee,” the report states. “Palm Springs fees would be higher than other Coachella Valley cities based on staff’s proposed robust compliance program and proactive inspection and investigation schedule requiring dedicated code compliance officers.”

Many owners of cannabis dispensaries in the city, however, are questioning just how much more scrutiny is needed. Data from the Palm Springs Police Department obtained by The Post last week show marijuana was involved in only three citations or arrests in the city last year, and just 25 since 2017, the year after marijuana was legalized in California. In addition, the city has only one cannabis business that might be deemed a problem — receiving six visits from code enforcement for reported odor violations this year.

“When it comes to cannabis we are clearly acting proactively,” Palm Springs Police Department Lt. Mike Villegas said Monday evening during a meeting of the city’s Cannabis Task Force. “But we’re supposed to be mirroring what state guidelines ask for.

“If we were to do that level of enforcement, we need to do inspections, financial audits, and cannabis product inspections, asking, ‘Do they have the allowed number of plants per room?’ These are big facilities. We need to have checks and balances in place.”

The dispensary owners, many of whom have been operating other small businesses in the city for decades, pointed to the same facts laid out by Villegas Monday to make their case against the fee hikes. Since grow operations need the additional scrutiny, they said, it should be grow operations that foot the bill.

“I’d like to see a budget of what we’ve spent on fees and what we’ve spent in cannabis enforcement,” said Julie Montante, the holder of three retail cannabis licenses in the city, according to state records. “We pay enough in taxes now. That fee should go to the cultivation operations. The dispensaries can’t absorb any more fees.”

Any accounting of the sort Montante asked for, however, may come too late to avoid the fee hikes. The City Council is planning a public hearing on multiple fee hikes during its meeting Thursday, followed by a vote on their adoption. The proposed increases were listed among three dozen line items on the Council agenda released last week. The language of the line item made no mention, specifically, of the increase for cannabis licenses, catching many dispensary owners off guard.

“We are talking about this today, but it’s also on the agenda for Thursday,” said Joy Brown Meredith, owner of Joy of Life Wellness Center, during the Monday evening task force meeting. “I’m not sure why we would be raising fees 1,000 percent with a very short time to discuss it.”


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BRIEFLY

CHECKPOINT RESULTS: Palm Springs police cited or arrested five drivers for driving without a license during a checkpoint Friday night into Saturday morning. According to a news release issued by the department Monday, officers stopped more than 500 vehicles in the 2300 block of Ramon Road between the hours of 9:30 PM Friday and 2 AM Saturday, looking for impaired or unlicensed drivers. The department conducts regular checkpoints at locations throughout the city that have a history of crashes and arrests for driving under the influence.

EMMISSIONS REDUCTION: The city has exceeded state goals to reduce greenhouse gas emissions, it was announced Monday. According to a report issued earlier this month, far less carbon dioxide and other greenhouse gases were released into the air in the city last year than were earlier projected.  Palm Springs’ 2020 emissions were estimated be 490,180 metric tons of carbon dioxide equivalent (MTCO2e), which is 21 percent below earlier projections and 17 percent below the total numbers recorded in 2018. In a news release, city officials credited the reductions primarily to residents and businesses participating in the Desert Community Energy plan. That plan provides 100 percent carbon-free energy, including power from local wind turbines. Without participation, they said, greenhouse gas emissions in the city would have actually increased by 5 percent.

TODAY’S EVENTS

  • TAI CHI: The Mizell Center offers Chair Tai Chi at 9 AM. Registration is available here.
  • VACCINES: Anyone 12 and older now qualifies for a COVID-19 vaccine in Riverside County. If you qualify, you can get one at the Palm Springs Convention Center, 277 North Avenida Caballeros, from 8:30 AM until 4:30 PM Mondays, Wednesdays and Fridays, and from 8:30 AM until 7 PM on Tuesdays and Thursdays. Appointments are not required, and those age 12-17 need to be accompanied by a parent or legal guardian. You can also find a list of community providers such as pharmacies here.

COMMUNITY CONNECTION

Want to know about city and other municipal events? Road construction in your neighborhood? Building activity? Have something to report? The following links should help:

City of Palm Springs calendar of events

Police reports | Submit a police report

Code compliance reports | Report a code violation

Current road projects and closures

Currently active development projects

ONE-PS calendar of meetings

Desert Water Agency calendar

Mizell Center calendar of events

FIND Food Bank mobile market schedule

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