Nick Patton

Months after Portland city commissioners (with the exception of Dan Saltzman) were insistent pot shops shouldn't be allowed to cluster in Portland, they're about to hear about the fallout of that decision: The city's not making enough money from pot licenses.

An ordinance [pdf] Commissioner Amanda Fritz has filed for consideration next week would nearly double the already steep costs of purchasing and renewing licenses to run medical dispensaries, pot growing and processing operations, and marijuana wholesale businesses in the city of Portland. Fritz's Office of Neighborhood Involvement, which is responsible for regulating weed, also wants to kick up application fees.

Here's what the proposed increases look like:


Those are steep raises—especially for something that already costs way more than a liquor license, and which some worry (again, Dan Saltzman) simply pays city workers to perform regulation that already exists on the state level. But ONI says the hikes are absolutely necessary.

And a big reason they're necessary, the ordinance says, is that Portland's not allowing enough pot businesses. Under rules the city adopted last year, marijuana shops need to be at least 1,000 feet from one another. The problem with that is those rules came online when the city was already beginning to burst with medical dispensaries, and those dispensaries successfully argued for favorable treatment—if they were abiding by the law, the city gave them preference in their 1,000-foot circle.

ONI says it's currently processing 96 license applications for existing marijuana dispensaries, and 80 applications for new businesses. It could be reaping hefty license fees from nearly twice that many without the 1,000-foot rule.

"There are approximately 148 additional applications in queue for appointments to submit applications, a large percentage of which will be denied based on the distance requirements established in City code," the ordinance says.

This was the obvious outcome of the distance rules, as we reported in September—but ONI was argued there was plenty of untapped room for new commerce. The bureau now concedes the city laws have "limited the available real estate for new retailers" and that "retail license applications will be significantly lower than originally anticipated."

But ONI says there's more at play here. The city set up its pot license fees to put most of the burden on marijuana retailers (as opposed to medical dispensaries, growers, etc.). But the OLCC's slow rollout of a retail system means that the city can't issue retail licenses until some point later this year. Also, not as many people have applied to set up pot grows, processing operations, or wholesale businesses.

Bottom line, the ordinance says: "The current fee schedule will not cover the cost of administering the program." Since it's been filed as an emergency, the new fees would go into effect right away if city council agrees.

We've left a message with ONI to get a sense of just how deep in the hole the Marijuana Policy Program is. We'll update when we hear back.