On May 14, the Blythe City Council unanimously approved a contracted $2,500-per application rate — with a $37,500 limit (assumes 15 applications) — for commercial cannabis application review services with HDL (Hinderliter, DeLlamas, and Associates) Companies.
HDL Companies is the contracted municipal consultation firm the City of Blythe entered into a general services agreement with in April 2017 for technical cannabis-related support services, which included drafting the local ordinance and developing the encompassing structure of the application process.
“To date, 18 Commercial Cannabis Business Permits have been issued to 10 businesses. One business has opened, with six others in some phase of the development process,” stated the item’s staff report.
As previously reported by the Times, the current category breakdown for those 18 issued commercial cannabis business license permits include eight for cultivation; two for the category of dispensary; two for the category of distribution; and six for the category of manufacturing.
Since the application process was developed, the city has lifted the license-limit for the categories of cultivation, distribution, manufacturing and testing labs. The category of dispensary had a two-license limit, both of which were awarded on March 13, 2018.
“After the original licenses were issued, changes were made to streamline the application process. Applications are now accepted on an ongoing basis for cultivation, distribution, manufacturing, and testing labs. Due to the changes made, staff asked HDL to assist in the phase I and II review only — to verify compliance with state and local rules and regulations. Phases III and IV will be handled solely by staff,” said Blythe Interim City Manager Mallory Crecelius, noting HDL’s proposed $2,500-per rate to be collected from the cannabis application process’ encompassing fees. “Staff has recently received seven new cannabis applications from three potential businesses and now needs the technical expertise of HDL to review these licenses for their compliance with state and local laws.”
Blythe’s current commercial cannabis business application process has a minimum 80 percent aggregate score threshold each applicant must meet in order to reach the fourth phase of approval consideration:
Phase 1: Determination of Eligibility, consisting of a criminal history check; review of application for completeness; verifying the business location; and a signed agreement indemnifying the City of liability.
Phase 2: Initial Ranking, consisting of scoring the following criteria: location; business plan; neighborhood compatibility plan; safety and security plan; and labor and employment plan.
Phase 3: Second Ranking, consisting of an interview with staff. Staff asking questions about the application and scored based on the responses given on the respective applicant’s business plan. Items covered in the interview include: community benefits; enhanced product safety; labor and employment; neighborhood compatibility; and safety and security plan.
Included staff in the application phase three interview are City of Blythe’s Interim City Manager Mallory Crecelius; Blythe Police Department (BPD) Interim Police Chief Joshua Coe; Finance Director Christa Elms; and a City of Blythe building inspector. A representative from HDL was previously a part of this phase as well.
Phase 4: To reach phase four, the applicant must have scored at least an 80% on each of the previous phases. The acting City Manager then may make a recommendation to Council for approval.
In response to Councilmember Johnny Rodriguez’s query on issues some applicants have raised regarding HDL’s potential “unfair” process, Crecelius noted:
“So I’m not exactly sure what those issues are. All the applicants have dealt directly with me when they submitted their application. A lot of them had to re-submit supplemental information, and then a list was provided with information they needed to submit. Sometimes (there would be) a third time for supplemental information — just really dependent on the applicant and their application.”
In March 2017, HDL noted their firm to serve 44 counties, 299 cities, and 79 transactions tax districts in the state of California. As of May of this year, the firm reportedly serves 49 counties, 311 cities, and 132 transactions tax districts statewide.
“Our team of professionals has over 46 years of direct experience establishing and implementing cannabis regulatory and taxation programs, including establishing land-use regulations, permit processes, staffing plans, and cost recovery fees; structuring cannabis business tax fees; regulatory compliance; financial audits; and law enforcement training,” states HDL’s proposal for cannabis management services. “Our team has conducted over 16,000 cannabis compliance inspections and investigations in Colorado, California, and Nevada.”
The unanimously approved and staff recommended proposal also included language for an additional 10-hours of technical assistance from HDL, should the need arise, at a fixed sum of $2,500.