As expected, the purpose of legalization of marijuana was NOT to sell a legal product, but to use the new law to make it easier—and cheaper for drug dealers to sell the weed. Drug dealers do not need a building, pay employees and security, fees and taxes to government. It is always cheaper to buy pot on a street corner than in a government approved facility. Even potheads do not like to pay extra for government interference.
“An item on Tuesday’s agenda about changing collection of the community benefit fees paid by licensed cannabis businesses turned into a discussion about a wholesale restructuring of development agreements and fees that were supposed to generate funding for public agencies under California’s legalization initiative. Zach Drivon, an attorney representing legal cannabis businesses, said retail prices are plummeting because of overproduction and competition with illegal cannabis grows.”
What if the government approved pot shops closed down? It looks like government will save money. Just a thought.
Legal cannabis businesses are hurting. Will Stanislaus County reduce their fees?
BY KEN CARLSON, Modesto Bee, 5/4/22
Cannabis businesses are advancing through the permit process in Stanislaus County, giving county leaders some hope of seeing significant revenue from the legal marijuana industry. Sacramento Bee At least one retired Stanislaus County supervisor, who was critical of California’s legal cannabis initiative, might be saying, “I told you so.” County supervisors on Tuesday talked about reducing the fee structure for legal cannabis business owners, who are complaining they can’t pay the current fees and may be driven out of business by black-market marijuana.
An item on Tuesday’s agenda about changing collection of the community benefit fees paid by licensed cannabis businesses turned into a discussion about a wholesale restructuring of development agreements and fees that were supposed to generate funding for public agencies under California’s legalization initiative. Zach Drivon, an attorney representing legal cannabis businesses, said retail prices are plummeting because of overproduction and competition with illegal cannabis grows.
Mark Ponticelli, a legal cannabis merchant in Modesto, said a pound of black-market marijuana costs $1,000. “We are paying $3,000,” he said. $2 for 2 months Subscribe for unlimited access to our website, app, eEdition and more CLAIM OFFER Another business owner known for selling medicinal cannabis said he will be out of business in six months if something doesn’t change. Supervisor Channce Condit said he agreed with reviewing the community benefit fees but also favored an overall revamping of development agreements for cannabis businesses.
“Our legal market is in a free fall,” he said. Former Supervisor Jim DeMartini, who was Condit’s predecessor on the board in supervisorial District 5, often predicted that legal cannabis businesses would never come through with payment of fees or the revenue promised by the state’s legalization effort. Board chairman Terry Withrow said he’s not that surprised the cannabis program has run into a rough patch. “We knew there were going to be issues,” he said. “I am open to figure out how to make this work.” County staff said 18 licensed cannabis businesses are active in unincorporated areas of Stanislaus. In December 2017, county leaders adopted what they called a “conservative allowance” cannabis program that established regulatory hoops for applicants seeking permits.
Tuesday, county supervisors voted unanimously to terminate collection of the community benefit contribution fee and authorize the chief executive office to amend that part of the cannabis program. Details on how much cannabis businesses will be contributing to the community were not available. Development agreements with cannabis license holders also include fees that pay for law enforcement attempts to shut down illegal cannabis operations under the state’s more lenient laws against illegal cultivation. Those fees are not affected by Tuesday’s board action but it appears the development agreements will be revisited. According to the staff report, the revised community benefit program will keep the original intent of the cannabis industry giving back to the community.
“Staff will develop a new program that will include menu options to support nonprofits, community education and substance abuse education, good neighbor opportunities and annual financial contributions … to various charities within Stanislaus County.” That will allow cannabis businesses to give directly to charities. Annual county inspections will ensure compliance with the program. The staff report didn’t estimate the fiscal impact of giving license holders a break on the community benefit fees.
