City’s Cannabis Planning Bill Nears $25,000 and Growing
So much for the idea that legalizing retail marijuana is a time for free post-Woodstock celebrations, dancing in the rain and rock ‘n’ roll revivals.
In other words, it’s not all fun and games and so-called “reefer madness.”
Cripple Creek officials are learning real fast that opening the door for cannabis shops is a complex ordeal and not that cheap for would-be applicants and the city. Already, official estimates have indicated that the city has put out close to $25,000 in preliminary reefer planning expenses in the last few months, a price tag that undoubtedly will grow.
Despite the financial and regulatory hurdles involved, the Cripple Creek City Council took a major step forward last week in finalizing the rules for this burgeoning industry, a process that was kickstarted by strong approval by the voters last November.
With only a few staggering steps, the council cleared the pathway for the city to meet the deadline for a moratorium set to accept cannabis licenses. The council addressed such key rules as the pending selection process with more applicants than available licenses, the proposed taxes, fees and other details pertaining to the rules. The crux of these issues, part of 60-plus pages of cannabis business guidelines and rules, should get finalized on May 17.
Also, at last week’s meeting, the elected leaders made two key decisions in moving the town’s marijuana effort to the next stage, or at least giving it more clarification. The council decided that similar to Manitou Springs, the city will require dual licenses for medical and retail marijuana operations, and that it won’t permit any sales for anyone under 21. Under state law, medical marijuana can be obtained by individuals between 18 and 21, who meet the guidelines for medicinal cannabis products. However, most council members believed that could create an enforcement and regulatory nightmare, and opted for a 21 and plus requirement, similar to the gaming establishments.
And as far as dual licenses, the council, by making this decision, basically limits the pending marijuana licensing permits to two brick and mortar or storefront locations. “You would have less (marijuana business) storefronts,” explained city attorney Erin Smith, in outlining the advantages of having dual licenses. The voters last November okayed a citizens’ ballot initiative, permitting two licenses for various types of cannabis operations.
But the council, according to Smith, has the latitude in the types of marijuana operations it wants to have. At a previous meeting, the elected leaders agreed to only permit medical and retail cannabis operations, and not to explore manufacturing, cultivation and hospitality reefer businesses.
One fact that garnered a little discussion last week dealt with the costs and the pending application fees. City Administrator Frank Salvato got a few heads turning when he cited the preliminary costs for reefer planning for Cripple Creek at $23,800. “We have spent that amount already,” said Salvato. As a result, the city plans to charge a maximum application fee of $10,000, along with other hefty charges, to help pay its pending marijuana processing expenses. Plus, sales taxes assessed on the purchase of retail pot will hit the 18 percent level.
“We don’t want to come out in a black hole,” said Mayor Milford Ashworth.
“The city is looking to cover its costs,” said Smith. She urged the city to favor the higher amount of projected application fees it could charge, which ranged from $3,000 to $10,000. Smith noted that the city may even consider contracting out with a consultant for handling some of its regulatory duties.
Based on the projected application and operation and consultant fees, a future pot operator would have to pay close to $20,000 in fees, just to get their operation off the ground from a regulatory standpoint.
A few council members wondered if this amount is too high. But the elected leaders agreed to start out with an initial application fee of $10,000, and then consider adjusting this amount in future years.
Picking Marijuana Winners and Losers
Of all the marijuana rules addressed last week, the selection process emerged as the most complicated issue and dominated most of the discussion. The city administrator proposed a point system to evaluate applications, as only two actual marijuana businesses will be permitted. This means the city will be thrust into the role of picking winners and losers. He proposed having a grading system, with 12 main criteria points, and setting up a panel of five city employees to evaluate applications. The main criteria will include experience of the applicants in the marijuana industry, evidence of any criminal past, local ties and whether they have operated a business in Cripple Creek previously, merits of their operation and business plans and more.
The final verdict will be made by the city council.
“Being truthful is very important,” stressed Salvato, who noted that the applicants could experience much scrutiny in what they present.
Under this system, the top scorers will be advanced to the next approval stage. In case of a tie, a lottery system may have to be implemented.
“I want to make sure we have everything cut and dry,” said Mayor Pro Tem Melissa Trenary.
As far as model pro-marijuana communities, Smith cited Alma, located near Breckenridge, as a town that Cripple Creek was trying to emulate slightly on the cannabis regulatory front. This is due to the fact that Alma, like Cripple Creek, is a statutory town.
District Saloon Slated for Opening Soon
In other action, the council also granted a liquor license to the new District Kitchen and Saloon, as part of an application submitted by Jeff Hellner, who also owns and operates Gold Camp Cafe and The Mercantile. Hellner, in his newest bid, got much support from a few community residents and civic leaders.
Annie Durham, the CTE coordinator of the Cripple Creek and Victor School District, stated that Hellner has made a huge contribution to the community in supporting the school programs and in employing a number of students and sporting a positive work environment. “I would welcome another restaurant coming to town,” said Durham.
This point was stressed by other community residents and even by the council. In fact, the main question posed by the council was: When is the opening day.
The District Saloon has commanded much attention, with an active renovation of this site, located at former retail storefront near city hall. Hellner said they hope to open the saloon by mid-June.