Cannabis FAQs

Q1:  Can I sell commercial cannabis now?  Can I open a dispensary now?  

A:  No.  Until you have a permit to operate a Retailer-Storefront use, selling cannabis is illegal under both state law and local ordinance.  (Revised 11/20/2020)

Q2: Can I open a commercial cannabis use at my location?

A: Not yet.  You will first need to determine what zoning district your property is in.  If it is residentially zoned, then there is no allowance for a Commercial Cannabis use — all residential zones are excluded from all commercial cannabis business.  The Retailer-Storefront use is only allowed in the Community Commercial (CC), Regional Commercial (CR), Commercial Services (CS), and TND-CORE zoning districts, and only after receiving a Commercial Cannabis business permit and a Conditional Use Permit from the City of Chico.  You will then also need to obtain a State issued cannabis license and a city-issued Commercial Cannabis Business permit. Information about the state license process can be found at www.bcc.ca.gov. (Revised 11/20/2020)

Q3: We cannot afford a $373 background fee for all employees as proposed by the City?

A: The background includes two components – a detailed provisional background check performed by HdL and a livescan criminal history check which is done at the Chico Police Department.  At the beginning of the application process, each owner (includes principals, managers, or anyone else who exerts control or direction of operations) must undergo a criminal history background check to demonstrate they do not provide “good cause” for denial per Chico Municipal Code Chamber 5R.42.  This will be done by the means of an online portal available on the City’s website at https://hdlcompanies.formstack.com/forms/bc_chico.  On this site, you will pay $300 for each individual undergoing the background check.

Upon completing the online background check form, each applicant will be required to print an online receipt which must be submitted with the application as proof of completion. Owners who do not meet the criminal history eligibility requirements of CMC Chapter 5R.42 will be disqualified.  

In the final stages of the application process, each successful applicant selected by the City Manager will need to submit to a LiveScan prior to being issued a permit. This will involve submitting fingerprints to the Chico Police Department. Each Applicant’s primary contact will be notified by email with the instructions on how to schedule the LiveScan appointment when the City Manager determines which Applicants will be awarded a permit.  An applicant will pay the $73 Live Scan fee at the Chico Police Department.

Background fees include the City’s costs for a LiveScan fingerprinting as well as a more indepth review by the City’s contractor.  The $373 ($300 + $73) background fee applies only to the initial applications for owners, managers and principals.  The annual renewal for owners, managers, and principals are $173 per person.  The proposed background fees for employees are proposed to be $173 per employee for the initial application and $148 per employee annually thereafter.  (Revised 11/20/2020)

Q4: For the initial application process for retail storefront applications, how long do I have to submit an application?

A: The City opened the application process for a period of 45 calendar days from June 2 through July 16, 2021.  After the close of the application period, the City will begin evaluating applications. (Revised 06/02/2021)

Q5: For Storefront Retail, does my proposed business location need to be leased before successfully obtaining a permit or after?

A: For the application, a specific location must be specified to ensure all requirements are met.  The application requires a number of items that are site specific.  An applicant must file a notarized Property Owner’s Consent form which provides the owner’s consent to the filing of the Cannabis application and use of their property for the purposes described in the application.  It additionally authorizes City representatives to enter upon the property for the purpose of examining and inspecting the property.

Additionally, each applicant must have either a lease of the specific property or a letter of intent from the property owner that specifies that the applicant has rights to lease the property for the use specified in the application.  There have been questions surrounding can multiple applicants use the same property.  We point to City of Chico Resolution 45-20 which codifies within the Chico Municipal Code Title 5R which speaks to this.  In Chico Municipal Code Section 5R.42.100 (17), “As a condition precedent to the City’s issuance of a Commercial Cannabis Permit pursuant to this Chapter, any person intending to open and to operate a commercial cannabis businesses shall provide sufficient evidence of the legal right to occupy and to use the proposed location.”  In this case, ownership or leasehold interest would be sufficient.  In the case of a Letter of Intent from multiple applicants involving the same property, this requirement becomes problematic.  If two applicants equally qualify for a permit at the same location, it will be the applicants’ responsibility to obtain clearer evidence of which applicant would have the right to occupy and use in this conflicted case.  Absent clearly and sufficient evidence pointing to one applicants right to occupy and use, the City reserves the right to disqualify both applications.  Please note: A Conditional Use Permit would be necessary after selection for storefront retail permit, and such permit must attach to a leasehold or owned property.  (Revised 11/25/2020)

Q6: Will proof of funds be required for Storefront Retail applications?

A: Yes, under Chico Municipal Code Section 5R.42.100 C.(7) c, proof of capitalization from a verifiable source will be required.  The degree of verifiability may play into the scores provided for the overall Business Plan.  Thus, it is strongly recommended that each applicant obtain verifiable information of capitalization. (Revised 11/20/2020)

Q7: If I am awarded a Storefront Retail Permit, can I do deliveries or will I need a Non-Storefront Retail permit?

A: A Storefront Retail permit includes authorization to perform deliveries, and such business must adhere to all requirements set forth in City Code or State laws and regulations as it pertains to Non-Storefront Retail (delivery only) businesses.  A separate City application and permit will not be necessary for Storefront Retail to perform deliveries in conjunction with Storefront operations. (Revised 11/20/2020)

Q8: Can I present one application with multiple locations listed for a permit?

A: No.  Each application is location and business specific.  Thus, one application is only allowed for a specific location. (Revised 11/20/2020)

Q9: Can an owner submit applications for multiple Storefront Retail permits?

A: We need to clarify the ordinance requirements on this question.  An “Owner” means any of the following, or a group or combination of any of the following acting as a unit:

• A person with an aggregate ownership interest of 5 percent or more in the business applying for a City of Chico Commercial Cannabis Permit, whether a partner, shareholder, principal, member, or the like, unless the interest is solely a security, lien, or encumbrance.
• The chief executive officer of a nonprofit or other entity.
• A member of the board of directors of a nonprofit.
• An individual who will be participating in the direction, control, or management of the business, non-profit, or other entity applying for a City of Chico Commercial Cannabis Permit.

Chico Municipal Code Section 5.42.110F prohibits an owner from having ownership interest in more than one Storefront Retail permit.  Thus, the City will disqualify applications for this permit when an owner is listed or identified for two applications.  Applicants are advised to ensure that ownership is listed on only one storefront retail application.  (Revised 11/25/2020)

Q10: If I apply for a storefront retail permit, do I also need to apply for a non-storefront retail permit to do deliveries?

A: No. The storefront retail permit also includes the ability to do deliveries without needing to make a second application or pay a second application fee.  However, all the requirements applying to non-storefront retail (deliveries only) will apply. (Revised 11/20/2020)

Q11: The Cannabis Application Procedure Guidelines does not contain a font of margin requirement. Please clarify this requirement.

A:  There is no margin limitation. However, the PDF must be legible and easy to read for the reviewer. A font size of 11pt or greater should be used in order to maximize legibility.

Q12: Can I request a zoning verification letter for a possible cannabis location prior to the application being submitted?

A: Technically yes, but you will still have to go through the Cannabis zoning verification process.  Prior to the approval of Commercial Cannabis, the City had a zoning verification process intended to verify that underlying zoning allowed a specific use.   This process was limited to verifying that a specific parcel was in a specific zoning classification to allow for a specific use.  It does not include a review for possible sensitive uses which is required by the Cannabis Zoning Verification.

Thus, while you may technically apply for a general zoning verification and pay a fee for it, that letter would not be sufficient for the Cannabis use.  It is the Cannabis zoning verification which is required.  The fee is lower, and the timing of the request for Cannabis zoning verification is aligned with the overall Cannabis application to ensure the key date, the application date, is used to avoid a new sensitive use from disqualifying an application when it occurs between a zoning verification and application date.

After submission of the application package and payment of fees (both application and Cannabis zoning verification), zoning verification will occur first, and if the result disqualifies the location, the City will return the application as disqualified and refund the application fee minus the zoning verification and refund processing fees.  It is the applicant’s responsibility to review any material provided on this site for what areas are allowable and to conduct due diligence to identify any sensitive use that may exist prior to submitting an application.  The City maintains a GIS site, Geographic Information Systems – City of Chico, which has an interactive function to ascertain the zoning of specific parcels.  We do not release GIS shapefiles as changes to zoning and a new sensitive use would not be timely reflective on a specific shapefile. (Revised 11/25/2020)

Q13: If I am awarded a cannabis permit will I be required to enter into a Community Benefits Agreement with the City of Chico? Is this different from the Community Benefits and Investments Plan?

Per the City Council motion on June 1, 2021, any business awarded a commercial cannabis dispensary permit will be required to enter into a Community Benefits Agreement where they will agree to donate 5% of their gross receipts to a community benefits fund. Disbursement of funds will be directed by the City Council. The Community Benefits Agreement will be completed once the permit is awarded and is separate from the Community Benefits and Investments Plan in the application.

Q14: Will the form titled “Agreement on Limitations of City’s Liability, and Certifications, Assurances, Warranties, and Indemnification to City” need to be signed by all owners or just the primary owner who is designated as the contact?

This form will need to be signed and notarized by ALL applicants. Please attach additional signature pages for additional owners.

Q15: Who qualifies as a professional security consultant? Who qualifies as a professional fire prevention and suppression consultant?

A Professional Security and Fire Prevention & Suppression consultant may be any individual who possesses verifiable experience, training and/or expertise.  Consultants may be directly employed by the applicant or contracted through a professional consulting firm.  Applicants should be sure to include the consultant’s qualifications at the beginning of the Security and Safety Plan section of the application. 

Q16: I tried to go back into the background link I had previously used and it wouldn’t work. What should I do? Can I fill out the background link for my business partner?

Background applications may not be amended or changed once they have been submitted.  Applicants who wish to amend their application will be required to complete and submit an entirely new application. Applicants experiencing problems with the system are encouraged to contact HdL Companies at (714) 879-5000, ask for Kristi Lervold.  Each applicant is required to complete and sign their own background application.  Upon submitting a background application, the system will send the applicant an email confirmation. The receipt you are required to print will not have the specific name of the person being backgrounded, rather only the email they used when completing the form.

Q17: On page 2 of the application under the “application certification” do all owners need to complete this portion?

The Application Certification section on page 2 of the application needs to be signed by one (1) applicant.  Multiple signatures are not required.

Q18: PDF file #2 states there needs to be responses to Sections 1-7, but I only see 6 sections? Does it matter how I organize the protocol (i.e. numeric or alphabetic)?

The reference to, “Sections 1-7” on page 3 of the Procedures & Guidelines is a typographical error.  The document should read, “Responses to Sections 1-6 of Appendix A limited to 200 pages”.   There are only six (6) Evaluation Criteria.  Applicants are strongly encouraged to respond to the Evaluation Criteria in order they appear in the Appendix A.  Though applications will not be penalized for utilizing a different numbering/alphabetical system, applicants are discouraged from doing so.  HdL Application Evaluators will be writing reports using the exact numbering system found in the Appendix A. 

Q19: Some of the diagrams I am planning on submitting are hard to read on an 8 ½ x 11 page. Can I submit it on an 11×17 document?

We are not requiring a hard copy of any actual diagrams for the initial application. The only hard copies required are listed in the application. All other documents should be included in the proper section of the USB drive. Any diagrams should be legible on the USB drive.

Q20: The application states we will need to show proof of insurability with the initial application packet. Where should I include this information?

This can be included on the USB drive in its own digital file named Proof of Insurability, as well as a hard copy in the original application.  Do not place it within the 200 pages of the Review Criteria (PDF File #2).

Q21: How can I file an appeal if I am not awarded a commercial cannabis permit?

Information regarding appeals of a cannabis permit can be found by reviewing section 5.42.160 and 5.42.170 of the Chico Municipal Code (CMC). Applicants will need to complete an appeals form and submit it to the City Clerk’s Office with a check for the appeal fee of $4,328.00 at the time of filing. 

Q22: Will the scores of finalists be considered at Phase III?

Per section 5R.42.050 “Phase III (Competitive Permits): City Manager’s Hearing” of the Chico Municipal Code, the City Manager will receive a recommendation of the top 10 applicants moving into Phase III based on their ranking by final scores. However, the Phase III evaluation process will only be based on the presentations and responses provided by applicants during the City Manager’s Hearing. Based on such responses provided, the City Manager will determine which applicants shall proceed to Phase IV.