by Tracy Chamberlin

The cost of doing business is about to go up, at least for one local industry.

The Durango City Council voted July 3 to increase the rates and fees for medical marijuana centers and facilities within the city.  The increase is necessary to recover the costs of policing the fledgling industry, city officials said.

“When we started off we had no yard stick of what to do, and we patterned everything against the liquor code,” City Manager Ron LeBlanc said during the meeting. “It wasn’t too long into this that we realized how different regulating medical marijuana was from liquor.

Some of the fees jumped more than 300 percent.

When a medical marijuana facility applies for a business license in Durango, the initial cost now will be $3,000 instead of $875. The annual renewal fee went up as well, from $200 to $2,000. The fee for transferring ownership of the business has gone up from $600 to $3,000. And if a business chooses to modify the layout of the dispensary, the fee is $2,000.

 

“When I first saw this on the agenda, I said ‘Wow, that is an enormous increase from what was previously,’” said City Council member Christina Rinderle at the July 3 meeting.

She added that after reviewing documentation provided by the city staff and discussing the issue with municipal leaders from around the state, like Telluride, Buena Vista and Nederland, in seemed the proposed increases were “surprisingly in line” with fees charged by other communities.

City staff spoke of the money and time spent complying with the variety of local and state regulations. The city estimated it spends about $89,000 in salary, benefits and other expenses. With the new fee schedule, the city estimates it will recover about $59,000 of that.

Eight medical marijuana centers and one cultivation center are currently operating in Durango. Compared to the more than 4,000 liquor, special event and business licenses, the city spends 25 percent of its time processing the medical marijuana licenses.

Owners from two local medical marijuana centers, Durango Organics and Durango Healing Center, attended the meeting.

The owner of Durango Organics, Jonny Radding, informed council members that the price for fees and rates from the state, county and city can run from $20,000 - $40,000 annually, causing a hardship on small business owners in the community.

“We’re trying as hard as we can to put our best foot forward, and trying as hard as we can to survive in this climate,” Radding said at the meeting.
The current climate for the burgeoning industry is flush with pages and pages of compliance documentation, constant administrative upkeep and an ever-changing regulatory landscape.

“We’re not trying to regulate a small business; we’re trying to regulate a controlled substance,” said Chief of Police Jim Spratlen on Tuesday night.
However this could change in November, when a ballot measure to legalize marijuana for recreational use goes to Colorado voters. Under the proposal, residents over the age of 21 could legally use and possess 1 ounce or less of marijuana.

A change in the state law by voters would also change the local landscape of medical marijuana. LeBlanc said that is one of the reasons the city is considering a moratorium on issuing new licenses until the end of the year. A public hearing is scheduled for July 17 to consider the moratorium extension, allowing time for Colorado voters to decide on the issue of legalization.

The city also would like more time to work out some of the regulatory language in the current ordinance. Some of the issues brought up at the July 3 council meeting center around caregivers and defining what constitutes “modification of a premises” and the ensuing $2,000 fee.

At next week’s meeting, residents will have an opportunity to express opinions on the moratorium and the regulatory language. LeBlanc said the city welcomes ideas and suggestions on its rules and regulations.

If the moratorium is passed, LeBlanc said city staff will continue to examine the local rules and regulations.

At least, until the November vote.