With the local cannabis market becoming more competitive since it opened in January 2018, Kase’s Journey dispensary in Ceres was approved Monday to operate under a lower fee structure.
The Ceres Planning Commission approved changes to the developer agreement with Mike Reynolds which will result in less money paid to the city. The three-year term of the agreement will be expanded to 10 years. The agreement will also allow Kase’s Journey to begin making deliveries of product, as is allowed by the state Bureau of Cannabis Control allowing delivery from cannabis retailers.
The 4,000-square-foot retail cannabis dispensary is located in an industrial park at 4030 Farm Supply Drive in Ceres.
The proposed Public Benefit Fee payment terms were based on a fixed amount per year and is now moving to a base amount of $20,000 per month or five percent of gross receipts, whichever is greater, and sets a cap of $70,000 per month as the maximum fee paid to the city. The gross receipts factor is modeled on a similar framework used by the state for tax purposes.
The previous agreements required payment to the city of a monthly fee of $40,000 if the firm earned $500,000 or less in gross receipts per month. The fee increased to $50,000 per month for gross receipts between $500,001 and $800,000; $75,000 per month for sales of $800,001 to $1.1 million; and $100,000 monthly for sales more than $1,100,001.
The changes must also be approved by the Ceres City Council.
“Over the last three years I think we’ve established a lot of the doubts and concerns of an unknown in an unknown world with cannabis coming into Ceres,” said Reynolds. He added that only two calls for service have been placed regarding his dispensary since opening and they were false alarm calls.