National City has set five new business fees for commercial cannabis businesses, which will take effect in February.

The total, about $11,000, is somewhere in between the fees charged by Chula Vista, its neighbor to the south, and La Mesa.

According to Megan Gamwell, the city’s economic development specialist, the average cost for a cannabis application is around $10,000, but Chula Vista “is a bit of an outlier” with fees ranging from $7,000 to $16,000.

La Mesa charges between $7,000 and $10,000. And in faraway Mt. Shasta, a city similar in size to National City, the cost is between $5,000 and $8,000.

“So we fall right in line with adjacent cities and cities similar in size.”

Gamwell said the fees will be used to recover the cost of developing the regulatory program, and to review and process applications for cannabis businesses.

To determine the costs, which are based on the time it will take staff to review the applications, the city worked with cannabis consultants from SCI Consulting,

The number of commercial cannabis licenses has been set at six, allowing up to three in the Industrial Zones and three Consumption Lounges in the Tourist Commercial Zone West of I-5.

Who will make the cut?

Those who live there, the city hopes, dedicating at least two permits to local owner applicants who have lived in National City for at least three years prior to November 9, 2021, when the application process was finalized.

The city will favor proposals that benefit the community; for example higher pay and benefits for employees. A minimum of one permit is intended for applicants applying for a cannabis consumption lounge.

Everyone begins by paying an initial fee of $1,859, and meeting minimum eligibility requirements. There will be a Zoning Verification Letter of $80 per site. In the next phase, each applicant pays $3,765, and the applications are ranked. The top six who score at least 90 percent advance to phase three, paying a deposit of up to $5,000, depending on how time-consuming the application.

Other fees include a background check of $350 per owner, and an appeal process fee of $3,586 per appeal. Appeals can be made at any point in the application process.

While the review looks at many aspects – from a business’s proposed location to its security plan, the most points are assigned to their Labor, Equity, Diversity & Inclusion Plan.

Local applicants will receive an extra 150 points added to their application score.

One local asked that the council support the recommendation of vice mayor Jose Rodriguez to require three businesses be local, not just two, saying the city has enough qualified professionals to operate more than two cannabis businesses.

While the fees will become effective Feb. 7, 2022, Gamwell said they haven’t decided when they will start taking applications.

In the future, the city will be adding additional fees, including an annual cannabis business permit fee for those who survive the entire application process.

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