Richmond Collective Will Pay Fees, Keep Permit

The business owner who holds one of six permits to sell medical weed in Richmond agreed to pay the city $62,000 in back fees while he continues his search for a place to open shop.

Four years ago, Richmond granted permits allowing three medical marijuana dispensaries to operate in the city. The number was increased to six in 2012, making Richmond the city in the Bay Area with the highest number of dispensaries per capita.

John Valdez, who owns the Richmond Compassionate Care Collective, holds one of those permits. But for more than two years, he’s been unable to open his business because of red tape and civic drama.

Most recently, he tried to open a dispensary in the Santa Fe neighborhood but was stopped by a flood of residents who complained to the city council. Council members voted 4-2 in July to reject Valdez’s application.

In a hearing before the Public Safety Commission May 15, Police Chief Chris Magnus at first recommended the city revoke Valdez’s permit and offer it to new applicants. But the chief struck a deal with Valdez and his lawyer that gives Valdez 10 days to pay the back fees and six more months to find a viable site.

“The city is losing substantial revenue by not receiving the permit fees nor the 5 percent sales tax,” Magnus said.

The city collects money from dispensaries in the form of licensing fees and, under an ordinance approved by voters in 2010, a special tax on marijuana sales.

The Public Safety Commission agreed to let Valdez keep his permit under the conditions of the agreement.

Of the six permits issued by the city since 2010, only three collectives are in business and selling marijuana. The city has placed numerous obstacles in the way of permit holders, revoking two permits so far.

The ordinance and Richmond’s zoning laws strictly limit where stores may operate. Neighborhood opposition is enough to kill almost any proposed location. And the cost is substantial.

Permit holders must pay $15,690 in fees every three months, plus standard state taxes, plus the 5 percent city tax. City officials said Magnus stopped paying his fees after the vote last July.

His attorney, James Anthony, said Valdez is confident he can find a site now because “a more tolerant” attitude toward medical weed has taken root in California. Many local governments have been moving to ban dispensaries and even cultivation in recent months, thanks to a ruling by the state Supreme Court last year, but Anthony said the general trend is favorable.

“More financing and more leasing options are available now and federal crackdowns on MMJ are lessening,” he said.