Sacramento Now Offers Applications for Cannabis Business Permits

On March 22, the city of Sacramento began offering applications for commercial cannabis permits, following a decision by the city council earlier this month to lift the ban on cultivation and approve the framework, rules and regulations for the program. The process has begun earlier than expected, but has been estimated to last for several months to finalize approval for eligible applicants.

The city of Sacramento is supporting commercial cannabis in an effort to raise $6.3 million from cannabis business revenue, in order to aid in the improvement of the city’s regulatory efforts toward legal cannabis. The city hopes to pay for additional city staff and police over the next few years to help regulate the cannabis industry in Sacramento and also to help drive out illegal cultivators operating in areas where the businesses are prohibited. The effort is expected to require 54 positions, including 32 new city hires at a cost of $5.4 million.

The city council is not taking the task lightly. They are starting early, but have already established fees for cannabis businesses including Sacramento’s existing 30 dispensaries and eventually cannabis delivery, distribution, manufacturing, lab testing and transportation businesses.

“I think what we’re doing tonight . . . it is really just the beginning,” said Sacramento Mayor Darrell Steinberg.

In the city council meeting earlier this month that set everything up, the council approved first-year permit fees ranging from $9,700 for indoor grow rooms with up to 5,000 square feet of cannabis to $28,910 for facilities of up to 22,000 square feet, with the annual fees dropping to a range of $8,240 to $26,630 the second year.

The cannabis businesses will be subjected to Sacramento’s four percent business tax, plus sales tax, and possible an additional tax (still in the works). Currently, Sacramento collects $4 million annually from its cannabis dispensaries under a four percent medical cannabis tax approved by voters in 2010.

One of the better aspects of Sacramento’s new regulations is that the city aims to allow people convicted of previous cannabis-related crimes (that are no longer illegal) an opportunity to work in a legally sanctioned industry.

“I want us to be really proactive and upfront about where we want to go,” Steinberg told the Sacramento Bee. “I think there is a tremendous revenue opportunity for us – and jobs, potentially high-wage jobs. But we want to do it right.”