‘Grueling’ process and sizable fees await would-be medical marijuana businesses in Costa Mesa

If you want to set up a medical marijuana enterprise in Costa Mesa, you’ll need three things: patience, a well-defined plan and enough money to cover the cost of doing business.

Those were takeaways from a meeting the city held Wednesday to discuss the application process and proposed fees for those looking to set up shop in town under Measure X.

That initiative, approved by local voters in November, allows businesses that research, test, process and manufacture some medical marijuana products to open in the area north of South Coast Drive, west of Harbor Boulevard, south of MacArthur Boulevard and east of the Santa Ana River — though not in South Coast Collection.

Cultivation and retail sales of marijuana or marijuana products are still prohibited under the measure.

During Wednesday’s meeting at City Hall, Assistant City Manager Rick Francis told the crowd of more than 70 people that operators likely would be subject to around $50,000 to $55,000 in fees to open a medical marijuana business.

The city has determined that amount would be necessary to cover costs related to permitting the businesses and enforcing local regulations, Francis said.

“This is going to be done on a cost-recovery basis,” he said. “The fees represent our best effort to recoup what the city’s going to spend in extra time and all the other extra effort that we have to undertake to make this thing happen.”

Other costs, such as annual business license fees, would be on top of that.

The crowd appeared to have some sticker shock. Some said the city’s estimated fees seem high compared with what’s charged elsewhere.

Others pointed out that medical marijuana businesses in Costa Mesa also will have to pay a 6% annual gross receipt tax.

City Council members have the final say on how much the fees will be. They are expected to take the issue up at their April 18 meeting.

Though the application process hasn’t yet begun, operators will need to obtain several documents to open a medical marijuana business.

Those include a business license, a medical marijuana business permit — which entails background checks of all owners and employees — and a conditional use permit, which requires approval from the Planning Commission.

Getting all that paperwork in order will probably take at least five months, according to Francis.

If the process sounds arduous, that’s partly by design. The goal, Francis said, is to get “the cream of the crop” to open in town.

“The city wants really solid operators,” he said. “We don’t want a whole lot of problems with operators who are kind of reckless. So this process, it’s going to be kind of grueling and it will weed out some potential operators.”

“No pun intended,” he added, drawing laughs from the crowd.

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