Palm Springs could hike cannabis businesses’ license fees by $10K per year, sparking outrage

Palm Springs cannabis business owners are pushing back on a new plan from the city of Palm Springs to rake in more money.

In its proposed budget, the city is eyeing a potential licensing fee increase of nearly $10,000.

"I just feel that the city needs to back off and wait a little bit longer," said cannabis business owner Julie Montante. "I feel that there's no need to rush this; they're rushing it."

For existing cannabis businesses in the city, it costs $1,000 to renew licenses each year. The proposed fee would increase that to $10,984. New businesses would pay the same to apply – up from $4,092 currently.

"The dispensaries have to pass on that fee to their patients or clients, because we cant absorb anymore," Montante said. "Our state already charges us quite a bit of money."

Lt. Mike Villegas with the Palm Springs Police Dept. said right now the city's code compliance team doesn't have the resources to fully enforce state regulations and city ordinance. Instead, he said officers can only react to complaints.

Hiking up annual fees on cannabis businesses would pay for two new code compliance officers, dedicated specifically to cannabis compliance.

"There's a lot of checks and balances that we're not doing right now," Villegas said. "If we were to maybe to look closer, there would obviously be more frequent inspections of not just the complaints, but random inspections of all our legalized businesses to ensure they are complying with the regulations."

Owners said it's just the increased scrutiny they take issue with. "I don't mind about paying extra for two more code compliance officers," Montante said. "But $10,000 per dispensary is outrageous."

Cannabis business owner Joy Meredith said there are other options for the city to consider to pay for cannabis-related public safety costs.

"In 2018, the city voted to pass an additional half-percent sales tax and that was for public safety," Meredith said.

Owners said especially just coming out of Covid, an extra $10,000 per year is too much. "We're just starting to survive now, just starting to get back into the realm now – everyone in the world is," Montante said.

The item is in the proposed budget set to be discussed at Thursday's city council meeting. The council can direct staff t make changes before it's approved.