The Durango Herald writes….
Officials to review licensing fees this fall
The city of Durango plans to review licensing fees for marijuana businesses after some retailers said the high fees are overly burdensome.
Colorado’s cannabis industry is less than 10 years old, which means some regulatory kinks have yet to be worked out. In 2014, Durango set marijuana license renewal fees at $8,000 per license based on city staff’s best estimates of processing costs. Now, those fees are higher than the state and county – which has raised concerns among some, but not all, cannabis businesses.
What’s more, every year Durango companies have to renew their medical and recreational marijuana licenses, each of which costs $8,000.
“There’s not really anything at the renewal, to us, that seems to warrant an $8,000 (fee) per license,” said Elizabeth Mason, director of operations at Aurum Labs, a Durango-based cannabis testing facility.
In nearby Pagosa Springs, the fee for each license is $2,000, and in unincorporated La Plata County, each license costs $3,000 to renew, according to each entity’s website. State renewals vary based on the type of company, but testing facilities and companies that sell products pay $1,800 to renew each license. The highest fee was $7,300 for medical marijuana businesses with more than 500 patients.
Both the state of Colorado and La Plata County have lowered their fees since marijuana was legalized. In 2018, business representatives met with Durango City Council to ask the city to take a look at its fees. The city started that review within the last month, staff members said.
“There really hasn’t been a delay. It’s been ongoing. Council has priorities and that’s what they look at,” said Amy Phillips, Durango city clerk.
The city’s licensing fee review process will span all the city departments involved in licensing applications, like police, community development, code enforcement and planning, staff members said. It will take place during the city’s 2021 budget development.
Mason said she never heard anything after the 2018 presentation, but when she touched base this summer, she was “really pleased” to get a quick response.
Several, not all, marijuana companies said the rates are too high.
Ken Aab, a manager at Rocky Mountain High in Durango, said the fees were fine, although they could be more in line with other businesses.
For the Green House, which operates both in Durango and Pagosa Springs, Durango’s fees cost more than its two Pagosa stores combined, said Dwayne Baird, the company’s licensing specialist.
Both companies supported a review of the licensing fees by the city of Durango.
“We’ve been asking them to review these fees for years now because they’re just a burden on top of everything else we have to deal with,” Mason said.
Marijuana businesses have faced unique financial challenges, like access to banks and credit, because the drug is not federally legal, she said.
Aurum Labs didn’t make a profit for the first two years. Its profit in the third year was $16,000, which went straight toward its renewal fees, she said. The business pays $30,000 in licensing and accreditation fees each year just to operate.
“It’s hard to have a startup company that has such high overhead, that requires very experienced people in a town that has a high cost of living anyway,” Mason said.
During the coronavirus pandemic, those existing challenges became more pronounced. The marijuana businesses also could not receive relief funding from the federal COVID-19 relief packages.
“COVID is just making an already bad situation worse,” Mason said.