COST RECOVERY ANALYSIS
City of Richmond
Commercial Cannabis Regulatory Fees
February 2023
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023
Page ii
City of Richmond
City Council
Eduardo Martinez, Mayor
Soheila Bana, Councilmember (District 4)
Claudia Jimenez, Councilmember (District 6)
Gayle McLaughlin, Councilmember (District 5)
Doria Robinson, Councilmember (District 3)
Melvin Willis, Councilmember (District 1)
Cesar Zepeda, Councilmember (District 2)
Engineer of Work
SCI Consulting Group
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023
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Table of Contents
Executive Summary .................................................................................................... 1 Introduction ............................................................................................................................... 1 Legal Framework ....................................................................................................................... 2 Methodology and Approach ..................................................................................................... 2 Summary of General Findings ................................................................................................... 3 Summary of Recommendations ................................................................................................ 4 Commercial Cannabis Business Application Review Fees ............................................. 5 Commercial Cannabis Business Application Fees...................................................................... 5 Application Completeness Review Fee ..................................................................................... 5 Conditional Use Permit.............................................................................................................. 5 Cannabis Business Permit (CBP) Issuance Fee .......................................................................... 6 Commercial Cannabis Business Annual Permit Fees .................................................... 7 Cannabis Retail (Storefront & Non-Storefront) Annual Permit Fee .......................................... 7 Cannabis Distribution Annual Permit Fee ................................................................................. 7 Cannabis Manufacturing Annual Permit Fee ............................................................................ 8 Cannabis Specialty/Cottage Cultivation Annual Permit Fee ..................................................... 8 Cannabis Small Cultivation Annual Permit Fee ......................................................................... 9 Cannabis Medium Cultivation Annual Permit Fee .................................................................... 9 Cannabis Large Cultivation Annual Permit Fee ....................................................................... 10 Cannabis Nursery Cultivation Annual Permit Fee ................................................................... 10 Cannabis Processor Cultivation Annual Permit Fee ................................................................ 11 Cannabis Testing Annual Permit Fee ....................................................................................... 11 Cannabis Reinspection Fee ...................................................................................................... 12 Cannabis Compliance Fee ........................................................................................................ 12 Other Fees ............................................................................................................... 13 Generally Applicable Fees ....................................................................................................... 13 Review and Update of Fees ...................................................................................... 14
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023
Page iv
List of Figures
Figure 1 – Summary of Proposed Fees ............................................................................................ 4 Figure 2 – Application Completeness Review Fee ........................................................................... 5 Figure 3 – Complete Application Review Fee .................................................................................. 6 Figure 4 – Cannabis Business Permit (CBP) Issuance Fee ................................................................ 6 Figure 5 – Cannabis Retail (Storefront & Non-Storefront) Annual Permit Fee ................................ 7 Figure 6 – Cannabis Distribution Annual Permit Fee ....................................................................... 7 Figure 7 – Cannabis Manufacturing Annual Permit Fee .................................................................. 8 Figure 8 – Cannabis Specialty/Cottage Cultivation Annual Permit Fee ........................................... 8 Figure 9 – Cannabis Small Cultivation Annual Permit Fee ............................................................... 9 Figure 10 – Cannabis Medium Cultivation Annual Permit Fee ........................................................ 9 Figure 11 – Cannabis Large Cultivation Annual Permit Fee ........................................................... 10 Figure 12 – Cannabis Nursery Cultivation Annual Permit Fee ....................................................... 10 Figure 13 – Cannabis Processor Cultivation Annual Permit Fee .................................................... 11 Figure 14 – Cannabis Testing Annual Permit Fee .......................................................................... 11 Figure 15 – Cannabis Processor Cultivation Annual Permit Fee .................................................... 12
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023
Executive Summary
Introduction
In 2010, the City Council adopted Ordinance No. 28 -10 adding Chapter 7.102 Medical Marijuana Collectives to the Richmond Municipal Code to regulate the collective cultivation and dispensing of medical marijuana.
In 2011, the City Council adopted Resolution No. 9 -11 establishing fees for application review, approval, and annual regulation required for medical marijuana collectives.
The Medical Cannabis Regulation and Safety Act (“MCRSA”) was signed into law in October 2015.
MCRSA was composed of three bills: AB 266 which established a dual-licensing structure requiring a state license and a local license or permit, AB 243 which established a regulatory and licensing structure for cultivation sites under the Department of Food and Agriculture, and SB 643 which established criteria for licensing of medical cannabis businesses, regulated physicians, an d recognized local authority to levy taxes and fees.
On November 8, 2016, the voters of the State of California approved Proposition 64, the "Control, Regulate and Tax Adult Use of Marijuana Act," which decriminalized the adult use of cannabis for non-medical purposes and established a regulatory scheme at the state level.
On November 15, 2016, the City Council adopted Ordinance No. 16 -16 adding Article
15.04.610.270 “Medical Marijuana Uses”, establishing regulations to allow for medicinal cannabis business to operate in the City.
On June 27, 2017, Senate Bill 94, the "Medicinal and Adult -Use Cannabis Regulation and Safety Act" (“MAUCRSA”) repealed and replaced MCRSA. MAUCRSA consolidates the medical MCRSA and adult use (Proposition 64) cannabis statutes.
On November 5, 2019, the City Council adopted Ordinance No. 16 -19 amending Article
15.04.610.270 “Marijuana/Cannabis Commercial Uses”, establishing regulations to allow for adult-use cannabis activities and provide consistency with State regulations.
The purpose of this Cannabis Regulatory Fee Study (“Fee Study”) is to reevaluate and update the City’s existing cannabis fee structure and to establish the legal and policy basis for imposing regulatory fees (“fees”) for permitting and annual regulation of co mmercial cannabis businesses in the City. The fees will be used to reimburse the City departments for reasonable direct and indirect costs and contracted services attributable to reviewing and acting upon the applications and verifying and enforcing cannabis business compliance with the City’s Municipal Code.
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023
Legal Framework
In order to impose such fees, this Fee Study will present findings in order to meet the substantive requirements of Proposition 26, which are as follows:
1. Demonstrate that the levy, charge, or other exaction is not a tax; and
2. The amount is not more than necessary to cover the reasonable cost of the governmental activity; and
3. The manner in which those costs are allocated to a payor bears a fair or reasonable relationship to the payor’s burden on, or benefits received from, the governmental activity.
Additionally, recent case law has provided further clarification of these substantive requirements, which are as follows:
Costs need not be “finely calibrated to the precise benefit each individual fee payor might derive.”
1 The payor’s burden or benefit from the program is not measured on an individual basis.
Rather, it is measured collectively, considering all fee payors.2 Demonstrating that the amount collected is no more than is necessary to cover the reasonable costs of the program is satisfied by estimating the approximate cost of the activity and demonstrating that this cost is equal to or greater than the fee revenue to be received.
3 Reasonable costs associated with the creation of the regulatory program may be recovered by the regulatory fee.4
Methodology and Approach
To determine the City’s cannabis regulatory fees consistent with these substantive requirements, the cost of permitting and regulating cannabis operations by various City Departments is determined. These costs are then allocated to the payor in a way that demonstrates that the costs bear a fair or reasonable relationship to the payor’s burden on or benefits from the program.
1 Griffith v. City of Santa Cruz (2012)
2 Griffith v. City of Santa Cruz (2012); Newhall City Water District v. Castaic Lake Water Agency (2016) 3 Griffith v. City of Santa Cruz (2012)
4 League of California Cities Propositions 26 and 218 Implementation Guide, May 2017, pp. 70-71 City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023
The City went through a deliberative process to establish a reasonable expenditure plan to use in setting the fees. An interdepartmental working group representing staff from the City , the Fire Department, City Attorney’s Office, and Planning Department worked together to develop and review the proposed fees.
For each of the regulatory fees established by the Fee Study, the City evaluated Article
15.04.610.270 “Mariju ana/Cannabis Commercial Uses” and identified specific City tasks and activities associated with permitting and enforcement of the regulations. Each City department then determined the specific hours and personnel needed by their department to complete their tasks and activities. The estimated labor hours for each activity were then multiplied by each relevant department’s current hourly labor rate for each position completing the task. The hourly labor rates include various salary and benefits, departmental support, supervision, and other administration overhead and similar indirect costs.
The type of costs included in the fees includes labor costs, contracted services, supplies, inter - department charges, and other incidental costs; for example: background checks and follow -up research and analysis on findings, zoning and distance checks, site visits, applicant correspondence, etc. Detailed supporting analysis tables served as the mechanism to determine specific fee rates and estimated hours, as summarized in this Fee Study. These time estimates and levels of effort were then reviewed and evaluated by other City staff and SCI for their reasonableness.
The time estimate remains constant for each application review phase or annual regulation and inspection activity, and the fees are based on each department’s hourly rates as of the date of this fee study.
Summary of General Findings
The following general findings from the Fee Study are presented:
1. The City’s proposed cannabis regulatory fees are not taxes, but regulatory fees in that the fees are proposed to recover costs associated with the Article 15.04.610.270, which created the regulatory framework to permit and regulate commercial cannabis businesses in the City.
2. The City went through a deliberative process to establish reasonable costs for permitting and annual enforcement of the City’s regulations.
3. The fee amounts determined by this Fee Study do not exceed the reasonable cost of permitting and enforcement of the new regulations.
4. The fees bear a fair or reasonable relationship to the payor’s burden on or benefits from the regulatory program.
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023
Summary of Recommendations
Based on the findings presented in the Fee Study, it is recommended that the City consider adopting the fees shown in Figure 1.
Figure 1 – Summary of Proposed Fees
Fee Description Fee 1 Unit
Application Completeness Review $1,019 per application
Conditional Use Permit $12,611 per application
Cannabis Business Permit $4,262 per application
Annual Permit Fee (Retail Storefront) $3,365 per permit annually 2 Annual Permit Fee (Retail Delivery) $3,365 per permit annually 2 Annual Permit Fee (Distribution) $3,365 per permit annually 2 Annual Permit Fee (Manufacturing) $3,587 per permit annually 2 Annual Permit Fee (Specialty/Cottage Cultivation)3
$3,365 per permit annually 2
Annual Permit Fee (Small Cultivation)3
$3,587 per permit annually 2
Annual Permit Fee (Medium Cultivation)3
$3,809 per permit annually 2
Annual Permit Fee (Large Cultivation)3
$4,030 per permit annually 2
Annual Permit Fee (Nursery Cultivation)3
$3,365 per permit annually 2
Annual Permit Fee (Processor Cultivation)3
$3,365 per permit annually 2
Annual Permit Fee (Testing) $3,365 per permit annually 2 Reinspection Fee $1,463 per inspection
Compliance Fee4
Actual Cost per hourly rate
Notes:
In the event of a compliance issue, a compliance fee will be charged based on actual costs incurred by the City, using the fully burdened rates of the staff and consultant time spent to remedy the issue.
Proposed fees are rounded to the nearest dollar.
Each additional permit for the same business at the same location shall be charged 25% of the applicable fee.
The highest activity use fee shall be the first base fee.
The annual permit fee for cultivation businesses is based on the license type issued by the Department of Cannabis Control (DCC), regardless of whether the business is utilizing the maximum canopy space authorized under the State License.
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023
Commercial Cannabis Business Application Review Fees
This section determines the costs and associated fees to review applications and issue permits for commercial cannabis businesses in the City.
Commerci al Cannabis Business Application Fees
The following fees will be collected at separate phases of the application process:
Application Completeness Review Fee
Conditional Use Permit
Cannabis Business Permit (CBP) Issuance Fee
Application Completeness Review Fee
The proposed Application Completeness Review Fee is $1,019 and is due upon submittal of the application. The application fee recovers the cost to review and process applications for completeness.
Figure 2 – Application Completeness Review Fee
Conditional Use Permit
The proposed Conditional Use Permit fee is $12,611 per eligible application and is due upon submittal of the complete application.
Outside Service
Cannabis
General Tasks/Activities
Director
Senior
Planner
Code Enfor
Manager
Code Enfor
Officer II
Fire
Marshal
ConsultantHours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $288 $154 $173 $144 $250 $300 Application Completeness Review 0.50 2.00 1.00 1.00 1.00 - 5.50 $1,019 $0 $1,019 Total 0.50 2.00 1.00 1.00 1.00 - 5.50 $1,019 $0 $1,019
City Administration
Community Development Total Labor
Richmond FD
Fire
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023
Figure 3 – Complete Application Review Fee
Cannabis Business Permit (CBP) Issuance Fee
The proposed Cannabis Business Permit Issuance Fee is $ 4,262 and is due upon submittal of the application for Cannabis Business Permit. The Cannabis Business Permit Fee recovers the cost associated with verifyin g an applicant has obtained required City permits, paid all City fees, obtained their State License, and conducting a final site inspection to check for building, fire, and local and state compliance prior to operation.
Figure 4 – Cannabis Business Permit (CBP) Issuance Fee
Outside Service
City Attorney Cannabis
General Tasks/Activities
Director
Senior
Planner
Code Enfor
Manager
Code Enfor
Officer II
SR. Bldg
Inspector
Director
Senior Civil
Engineer
Attorney
Chief
Captain
Lieutenant
Sergeant
Deputy Fire
Chief
Battalion
Chief
Fire
Marshal
ConsultantHours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $288 $154 $173 $144 $161 $389 $259 $232 $329 $272 $242 $224 $277 $240 $250 $300 Application Review - 3.00 2.00 3.00 3.00 2.00 1.00 1.00 1.50 1.50 1.50 4.00 1.00 1.00 1.00 3.00 29.50 $6,819 $0 $6,819 Background Checks - - - - - - - - - - 1.00 - - - - - 1.00 $242 $0 $242 Fire Safety Compliance - - - - - - - - - - - - - - - - - $0 $0 $0 Facility Inspection - - 1.00 2.00 2.00 2.00 2.00 - - - - - - - - 3.00 12.00 $2,977 $0 $2,977 Staff Report 1.00 3.00 - - - 1.00 1.00 1.00 - - - - - - 1.00 - 8.00 $1,880 $0 $1,880 Public Hearing 1.00 - 1.00 - - - - 1.00 - - - - - - - - 3.00 $693 $0 $693 Total 2.00 6.00 4.00 5.00 5.00 5.00 4.00 3.00 1.50 1.50 2.50 4.00 1.00 1.00 2.00 6.00 53.50 $12,611 $0 $12,611 Community Development Police Fire Total Labor
City Administration Richmond PD Richmond FD
Public Works
Outside Service
Finance Cannabis
General Tasks/Activities
Senior
Planner
Code Enfor
Manager
Code Enfor
Officer II
SR. Bldg
Inspector
Bus License
Specialist
Director
Senior Civil
Engineer
SR. Env
Comp Inspc
Director
Sergeant
Fire
Marshal
ConsultantHours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $154 $173 $144 $161 $82 $389 $259 $259 $270 $224 $250 $300 CBP Issuance 1.00 2.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 - 12.00 $2,537 $0 $2,537 Facility Inspection - CUP Conditions - 1.00 1.00 1.00 - 1.00 1.00 - - - - 2.00 7.00 $1,725 $0 $1,725 Total 1.00 3.00 2.00 2.00 1.00 2.00 2.00 1.00 1.00 1.00 1.00 2.00 19.00 $4,262 $0 $4,262 Community Development Police Fire Total Labor
City Administration chmond P chmond F
Public Works
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023
Commercial Cannabis Business Annual Permit Fees
Cannabis Retail (Storefront & Non- Storefront) Annual Permit Fee Figure 5 shows the determination of the fee for full cost recovery for the annual regulation and inspection fee of a Retail (Storefront & Non -Storefront) Business. One inspection will be performed annually. As shown, the proposed fee is $3,365 annually per permit.
Figure 5 – Cannabis Retail (Storefront & Non-Storefront) Annual Permit Fee
Cannabis Distribution Annual Permit Fee
Figure 6 shows the determination of the fee for full cost recovery for the annual regulation and inspection fee of a Distribution Business. One inspection will be performed annually . As shown, the proposed fee is $3,365 annually per permit.
Figure 6 – Cannabis Distribution Annual Permit Fee
Outside Service
City Attorney Cannabis
General Tasks/Activities
Code Enfor
Manager
Code Enfor
Officer II
Attorney
ConsultantHours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $173 $144 $232 $300
Preparation 1.00 1.00 - 1.00 3.00 $617 $0 $617
Facility Inspection - 1.00 - 2.00 3.00 $744 $0 $744
Oversight and Reporting 2.50 2.50 2.00 2.50 9.50 $2,005 $0 $2,005 Total 3.50 4.50 2.00 5.50 15.50 $3,365 $0 $3,365
City Administration
Community Dev. Total Labor
Outside Service
City Attorney Cannabis
General Tasks/Activities
Code Enfor
Manager
Code Enfor
Officer II
Attorney
ConsultantHours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $173 $144 $232 $300
Preparation 1.00 1.00 - 1.00 3.00 $617 $0 $617
Facility Inspection - 1.00 - 2.00 3.00 $744 $0 $744
Oversight and Reporting 2.50 2.50 2.00 2.50 9.50 $2,005 $0 $2,005 Total 3.50 4.50 2.00 5.50 15.50 $3,365 $0 $3,365
City Administration
Community Dev. Total Labor
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023
Cannabis Manufacturing Annual Permit Fee
Figure 7 shows the determination of the fee f or full cost recovery for the annual regulation and inspection fee of a Manufacturing Business. One inspection will be performed annually. As shown, the proposed fee is $3,587 annually per permit.
Figure 7 – Cannabis Manufacturing Annual Permit Fee
Cannabis Specialty/Cottage Cultivation Annual Permit Fee Figure 8 shows the determination of the fee for full cost recovery for the annual regulation and inspection fee for a Cultivation Business issued a Cannabis Specialty or Cottage Cultivation License from the Department of Cannabis Control. One inspection will be performed annually. As shown, the proposed fee is $3,365 annually per permit.
Figure 8 – Cannabis Specialty/Cottage Cultivation Annual Permit Fee
Outside Service
City Attorney Cannabis
General Tasks/Activities
Code Enfor
Manager
Code Enfor
Officer II
Attorney
ConsultantHours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $173 $144 $232 $300
Preparation 1.00 1.00 - 1.00 3.00 $617 $0 $617
Facility Inspection - 1.50 - 2.50 4.00 $965 $0 $965
Oversight and Reporting 2.50 2.50 2.00 2.50 9.50 $2,005 $0 $2,005 Total 3.50 5.00 2.00 6.00 16.50 $3,587 $0 $3,587
City Administration
Community Dev. Total Labor
Outside Service
City Attorney Cannabis
General Tasks/Activities
Code Enfor
Manager
Code Enfor
Officer II
Attorney
ConsultantHours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $173 $144 $232 $300
Preparation 1.00 1.00 - 1.00 3.00 $617 $0 $617
Facility Inspection - 1.00 - 2.00 3.00 $744 $0 $744
Oversight and Reporting 2.50 2.50 2.00 2.50 9.50 $2,005 $0 $2,005 Total 3.50 4.50 2.00 5.50 15.50 $3,365 $0 $3,365
City Administration
Community Dev. Total Labor
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023
Cannabis Small Cultivation Annual Permit Fee
Figure 9 shows the determination of the fee for full cost recovery for the annual regulation and inspection fee for a Cultivation Business issued a Cannabis Small Cultivation License from the Department of Cannabis Control. One inspection will be performed annuall y. As shown, the proposed fee is $3,587 annually per permit.
Figure 9 – Cannabis Small Cultivation Annual Permit Fee
Cannabis Medium Cultivation Annual Permit Fee
Figure 10 shows the determination of the fee for full cost recovery for the annual regulation and inspection fee for a Cultivation Business issued a Cannabis Medium Cultivation License from the Department of Cannabis Control. One inspection will be performed annually . As shown, the proposed fee is $3,809 annually per permit.
Figure 10 – Cannabis Medium Cultivation Annual Permit Fee
Outside Service
City Attorney Cannabis
General Tasks/Activities
Code Enfor
Manager
Code Enfor
Officer II
Attorney
ConsultantHours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $173 $144 $232 $300
Preparation 1.00 1.00 - 1.00 3.00 $617 $0 $617
Facility Inspection - 1.50 - 2.50 4.00 $965 $0 $965
Oversight and Reporting 2.50 2.50 2.00 2.50 9.50 $2,005 $0 $2,005 Total 3.50 5.00 2.00 6.00 16.50 $3,587 $0 $3,587
City Administration
Community Dev. Total Labor
Outside Service
City Attorney Cannabis
General Tasks/Activities
Code Enfor
Manager
Code Enfor
Officer II
Attorney
ConsultantHours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $173 $144 $232 $300
Preparation 1.00 1.00 - 1.00 3.00 $617 $0 $617
Facility Inspection - 2.00 - 3.00 5.00 $1,187 $0 $1,187 Oversight and Reporting 2.50 2.50 2.00 2.50 9.50 $2,005 $0 $2,005 Total 3.50 5.50 2.00 6.50 17.50 $3,809 $0 $3,809
City Administration
Community Dev. Total Labor
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023
Cannabis Large Cultivation Annual Permit Fee
Figure 11 shows the determination of the fee for full cost recovery for the annual regulation and inspection fee for a Cultivation Business issued a Cannabis Large Cultivation License from the Department of Cannabis Control. One inspection will be performed annuall y. As shown, the proposed fee is $4,030 annually per permit.
Figure 11 – Cannabis Large Cultivation Annual Permit Fee
Cannabis Nursery Cultivation Annual Permit Fee
Figure 12 shows the determination of the fee for full cost recovery for the annual regulation and inspection fee for a Cultivation Business issued a Cannabis Nursery Cultivation License from the Department of Cannabis Control. One inspection will be performed annually . As shown, the proposed fee is $3,365 annually per permit.
Figure 12 – Cannabis Nursery Cultivation Annual Permit Fee
Outside Service
City Attorney Cannabis
General Tasks/Activities
Code Enfor
Manager
Code Enfor
Officer II
Attorney
ConsultantHours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $173 $144 $232 $300
Preparation 1.00 1.00 - 1.00 3.00 $617 $0 $617
Facility Inspection - 2.50 - 3.50 6.00 $1,409 $0 $1,409 Oversight and Reporting 2.50 2.50 2.00 2.50 9.50 $2,005 $0 $2,005 Total 3.50 6.00 2.00 7.00 18.50 $4,030 $0 $4,030
City Administration
Community Dev. Total Labor
Outside Service
City Attorney Cannabis
General Tasks/Activities
Code Enfor
Manager
Code Enfor
Officer II
Attorney
ConsultantHours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $173 $144 $232 $300
Preparation 1.00 1.00 - 1.00 3.00 $617 $0 $617
Facility Inspection - 1.00 - 2.00 3.00 $744 $0 $744
Oversight and Reporting 2.50 2.50 2.00 2.50 9.50 $2,005 $0 $2,005 Total 3.50 4.50 2.00 5.50 15.50 $3,365 $0 $3,365
City Administration
Community Dev. Total Labor
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023
Cannabis Processor Cultivation Annual Permit Fee
Figure 13 shows the determination of the fee for full cost recovery for the annual regulation and inspection fee for a Cultivation Business issued a Cannabis Processor Cultivation License from the Department of Cannabis Control. One inspection will be performed annually . As shown, the proposed fee is $3,365 annually per permit.
Figure 13 – Cannabis Processor Cultivation Annual Permit Fee
Cannabis Testing Annual Permit Fee
Figure 14 shows the determination of the fee for full cost recovery for the annual regulation and inspection fee of a Testing Business. One inspection will be performed annually . As shown, the proposed fee is $3,365 annually per permit.
Figure 14 – Cannabis Testing Annual Permit Fee
Outside Service
City Attorney Cannabis
General Tasks/Activities
Code Enfor
Manager
Code Enfor
Officer II
Attorney
ConsultantHours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $173 $144 $232 $300
Preparation 1.00 1.00 - 1.00 3.00 $617 $0 $617
Facility Inspection - 1.00 - 2.00 3.00 $744 $0 $744
Oversight and Reporting 2.50 2.50 2.00 2.50 9.50 $2,005 $0 $2,005 Total 3.50 4.50 2.00 5.50 15.50 $3,365 $0 $3,365
City Administration
Community Dev. Total Labor
Outside Service
City Attorney Cannabis
General Tasks/Activities
Code Enfor
Manager
Code Enfor
Officer II
Attorney
ConsultantHours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $173 $144 $232 $300
Preparation 1.00 1.00 - 1.00 3.00 $617 $0 $617
Facility Inspection - 1.00 - 2.00 3.00 $744 $0 $744
Oversight and Reporting 2.50 2.50 2.00 2.50 9.50 $2,005 $0 $2,005 Total 3.50 4.50 2.00 5.50 15.50 $3,365 $0 $3,365
City Administration
Community Dev. Total Labor
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023
Cannabis Reinspection Fee
Figure 15 shows the determination of the fee for full cost recovery for the cannabis reinspection fee for all cannabis business types. Reinspection will be performed on an as needed basis, when follow-up actions are required following an annual inspection or the City receives a complaint that warrants an inspection. As shown, the proposed fee is $1,463 annually per permit.
Figure 15 – Cannabis Processor Cultivation Annual Permit Fee
Cannabis Compliance Fee
In the event of a compliance issue, a compliance fee will be charged based on actual costs incurred by the City, using the fully burdened rates of the staff and consultant time spent to remedy the issue.
Outside Service
City Attorney Cannabis
General Tasks/Activities
Senior
Planner
Code Enfor
Manager
Code Enfor
Officer II
SR. Bldg
Inspector
Attorney
ConsultantHours Cost Other Costs Total Cost
Fully Burdened Hourly Rate $154 $173 $144 $161 $232 $300 Facility Inspection 1.00 1.00 1.00 1.00 1.00 2.00 7.00 $1,463 $0 $1,463 Total 1.00 1.00 1.00 1.00 1.00 2.00 7.00 $1,463 $0 $1,463 $1,463Reinspection Fee:
City Administration
Community Development Total Labor
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023
Other Fees
In addition to the fees outlined in this Fee Study, there are other fees that permit holders will be required to pay. These other fees fall into two categories:
Fees that apply in relation to cannabis operations as they would to any other permitted business operation or land-use entitlement in the City; and Fees that may be developed in relation to cannabis operations, but which are outside the scope of this Fee Study.
In the event the state develops additional sub-license types, city staff may apply the nearest applicable fee based on a similar use determination.
Permit holders will be informed of additional fees in the usual course of applications and communications with the involved City departments.
Generally Applicable Fees
Existing fees that apply to cannabis operations include, for example, business licens e fees and building permit application fees. These fees generally apply to cannabis operations the same as they would to any other permitted business in City. Another example is the Conditional Use Permit Fee or Appeals Fee payable by any applicant other t han an applicant for a cannabis operator permit. For example, if a third party (e.g., any person other than a permit applicant) appeals a decision in relation the cannabis operator permit processes described identified above, that appellant will pay a nominal appeal fee. This amount is consistent with the fee that is generally applied by the Planning Department for third -party appeals in planning processes brought by anyone other than the applicant.
City of Richmond
Cost Recovery Analysis
Commercial Cannabis Regulatory Fees, 2023
Review and Update of Fees
This Fee Study has been prepared in the context of an emerging industry and regulatory framework for legalized cannabis in the State of California. It may be appropriate for the City to review and update the fees identified in this Fee Study:
When the program under Article 15.04.610.270 has been implemented for a period of time sufficient for the City to have had an opportunity to review the actual costs incurred in processing applications and monitoring permits and to have achieved some efficiencies in processing applications and undertaking monitoring and compliance; If Article 15.04.610.270 is substantially amended such that the time and/or processes involved are substantially changed.