License Fee Increase

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From:

David B. Mendoza

Senior Policy Advisor, Office of Policy and Innovation

City of Seattle | Office of the Mayor

Licensees,

I’m writing today to provide all of you with some information on the Mayor’s proposed increase to the cannabis regulatory business license that was included in his proposed 2017-2018 budget. Table 1 below shows the number of staff in the Department of Finance and Administrative Services that are dedicated to marijuana enforcement issues. As you can see that current cost is $360K and expected to grow to $544K by 2018.  Table 2 highlights projected revenue raised from licensing fees. Actual expected revenue is going to be approximately $54K below initial projections. This table also shows the projected revenue under the Mayor’s proposal increasing the fee for in-city licensees by $500. As you can see, the increase still doesn’t cover all the costs FAS is incurring for their work in this area.  

In addition, the City has personnel in the Law Department, SDCI (formerly DPD), SPD and myself that have been doing significant amounts of work on this issue.  As you know, the amount of revenue the City receives from the state in marijuana excise taxes is minimal.

The Mayor is cognizant of the challenges the industry is facing and is not raising these fees lightly or without consideration of the some of the struggles the industry is facing.  However, we feel this relatively modest increase does help us cover some of the deficit we are facing in expenditures in regards to regulating this new industry and working to eliminate the illicit market.  Please note that FAS staff are essential in conducting our enforcement efforts in trying to reduce the illicit market. We have been and will continue to send staff to suspected illicit storefronts and they are key in our efforts regarding  illicit delivery services.  For an example of how our fees compare to other jurisdictions, please refer to table 3 which shows the fees imposed by Portland and Denver on their local cannabis industries.

While I am sending this message to all of the licensee email addresses we have on file, we don’t have an email address for all licensees as such please feel free to distribute this message to others in the industry. Also, if any of you have any questions or concerns, please do not hesitate to contact me.

Best,

David B. Mendoza

Senior Policy Advisor, Office of Policy and Innovation

City of Seattle | Office of the Mayor

david.mendoza@seattle.gov

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