Happy New Year Cannabis lovers! As of January 1, the sale of recreational Marijuana becomes legal in the state of CA and cannabis-laced foods and snacks will become locally accessible for recreational consumption.
But not so fast. Don’t count on walking into a 711 on New Years Day for any of your pot desires. You might want to hold onto those medical marijuana cards and keep Dr. Dina’s number handy.
Although the City Council of West Hollywood voted to approve final ordinances to permit the sale, consumption and delivery of recreational marijuana, licenses will be required and the application/approval process will likely take many, many months at costs of up to $10,000.
Here are some of the “cans” for Cannabis Purveyors in WeHo according to Ordinance No. 17-1016, approving amendments to Municipal Code and Zoning Ordinance to regulate cannabis uses.
Regulated Sale through Licensed Sellers
According to the ordinance, the city of West Hollywood will allow the sale, consumption, and transportation of cannabis. The ordinance also approves a fee schedule amounting up to $10,000 for the applicants who want to have both medicinal and recreational licenses for the sale and consumption of cannabis.
From January 2018, the City of West Hollywood will start taking applications for licenses related to businesses that will facilitate the sale and consumption of recreational marijuana. These will include:
- 8 licenses for retail sales.
- 8 licenses for medical dispensaries.
- 8 licenses for smoking lounges affiliated to marijuana stores.
- 8 licenses for lounges affiliated to marijuana stores where cannabis-based foods can be consumed.
In addition, up to 8 licenses will be issued to enable delivery services for marijuana, which are based in the city. For outside delivery services, a WeHo license will be necessary, but the number of such licenses will not be limited. The fees for these licenses will be substantially less than for those delivery services operating in West Hollywood.
Information for those Seeking a License
For businesses based in West Hollywood, 40 licenses in total have been decided. However, a number of businesses are likely to apply for multiple licenses. There is nothing wrong with capitalism! For instance, the currently operating marijuana medical dispensaries in the city are allowed to apply for an additional recreational marijuana sale license and the fee would be double if approved for both types of sale – recreational and medicinal.
The currently operating cannabis medical dispensaries can make an immediate application for a temporary license that will permit them to continue their operations next year. In the meantime, they are permitted to apply for the compulsory state license as well as one of the city licenses. Licenses valid for the duration of one year and renewable annually will be issued to the applicants who clear the complete approval procedure.
The applicants should, however, keep in mind that recreational marijuana stores and medical dispensaries under the state law are now not allowed to be located within a distance of 600 feet from a school.
It is not necessary for an applicant to have a pre-identified business location. But once they have finalized a location, they will be required to get it approved by the Business License Commission of West Hollywood and by the city before they may be granted a license. The commission will determine the business operating hours. Under the ordinance, the operating hours must not be in excess of 6 am to 2 am.
Interest in the New Business Opportunity
A significant number of individuals, as well as established businesses, have already shown interest in selling recreational cannabis and are ready to apply for the requisite licenses. Voters in California had approved Proposition 64 exactly a year ago, which legalizes the sale of recreational cannabis in the state to individuals who are at least 21 years of age. However, such sale is not yet permitted under the state law.
With the approval of the ordinance for the sale of recreational cannabis in West Hollywood, it is estimated that the city will generate a revenue of about $500,000 next year from application and license fees alone.
Moreover, this is a quantum jump from what the city received this year ($15,000) for license renewals of medical dispensaries. Members of the City Council have also engaged in some exploratory discussions about a proposed sales tax on marijuana at some point in the future.
Criteria for Application Evaluation
Barring the current licensees of marijuana medical dispensaries, all other applicants for cannabis sale licenses will be evaluated by a committee comprised of three members using eight specific criteria. These would include: –
- Past experience in operating a marijuana sale business or another regulated business such as a liquor shop or a bar.
- Ability to show that the marijuana offered will meet a high standard of quality.
- Offering workers with living wage with benefits and ensuring compliance with policies of non-discrimination.
- Maintaining a robust security program.
- Adhering to the urban design standards followed by the city.
The criteria also include additional more subjective standards, such as the ability to serve the city, familiarity and connection with the city, and innovative business models that conform to the West Hollywood community.
Fee Schedules
- Medical dispensary and recreational sales licenses and consumption areas on-site – initial fee: $9,880.
- License fee for the first year of operation for a medical dispensary, recreational retailer or consumption lounge- initial fee: $4,035.
- License renewal fee: $2,070.
- Cannabis Delivery services located in West Hollywood – initial license fee: $2,735
- Annual license renewal fee: $1,015.
- Delivery services located outside the city must pay an initial fee of $690, with an annual renewal fee of $295.
Even with new regulations, there will be limited options for consumers in WeHo and the rest of California to ring in the new year with any type of legal pot purchase.
For the most part, California will treat cannabis like alcohol. People 21 and older could legally possess up to an ounce and grow as many as six marijuana plants at home.
The state has yet to disclose its proposal to regulate the estimated $7 billion market, making California the largest legal pot economy in the nation.
Ever the “Creative City” perhaps someday a “Robo Cannabis Dispensary” in West Hollywood. But let’s not put the pot before the horse – applications, locations, permits and don’t forget the fees.
