The City of Hastings took yet another step toward embracing cannabis and hemp products by establishing the licensing fees for businesses looking to participate in the enterprise.
At their April 3 meeting, the City Council approved a fee schedule ordinance for the use, sales and operation of cannabis and hemp businesses. The council has been acting swiftly lately pertaining to the recently-legalized THC food and beverages, as they adopted zoning and licensing ordinances on March 20, the day after their 6-month moratorium on the matter ended.
For the annual retail licensing fee, the bar has been set at $8,000, a figure that was brought down from $10,000 at the March 20 council meeting. Cannabis and hemp businesses will also have to make an annual payment of $200 for a Manufacturing/Testing/Processing/Wholesale License, as well as for a Cultivation License. On top of those fees, the businesses must complete a one-time background check, which comes with a $500 charge.
The approval of this fee schedule ordinance was a originally part of the consent agenda, but Councilmember Tina Folch had reservations about the $8,000 retail licensing fee and asked for the item to be pulled for discussion.
She made a case for the fee to be slashed to a level more on par with what is levied on on-sale liquor establishments.
“Personally I do not understand why it is that we would require an $8,000 cannabis product reatil license when on-sale liquor licenses are only $4,200. I just feel that it’s really unfair of the City to be imposing a fee structure that’s so high that it discourages our business community from acquiring this license,” Folch said.
Standing behind the $8,000 figure, Councilmember Trevor Lund pointed out that this licensing fee is actually lower than that of neighboring cities, which he said sit at $10,000. He argued that the retail licensing fee shouldn’t be changed at this point because the fee structure ordinance was drafted after thorough consideration by the Public Safety Advsiory Commission and is malleable going forward.
“Those businesses that are going to take it the most serious and be the best partners in this are those that will be able to manage a larger fee too, it’s not necessarily meant to dissuade people,” Lund said.
He added: “We talked about it, and we shifted down on the $10,000 that was proposed, there is no perfect science to the number. I think its fine where it is and we can always revise and revisit it later, we don’t know a lot at this time.”
Councilmember Jen Fox spoke up in support of Folch and lowering the bar for a cannabis retail license, citing the experiences she has had as an on-sale liquor license owner. She said that these fees can oftentimes be prohibitive for businesses who are serious, but may not have enough capital built up to prove themselves as worthy.
Fox made a motion, which was seconded by Folch, to set the cannabis retail licensing fee at $6,000 dollars. The amendment ultimately stalled out in a 3-3 decision (Councilmember Angie Haus was absent), with only Councilmember Lisa Leifeld voting in support, and Mayor Mary Fasbender and the other council members opposing.
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