Marijuana retailers face substantial start-up costs to open in Ontario

Norm Crume, Ontario city council president, led the effort to require marijuana merchants to post a $7,500 bond to the city. (The Enterprise/File).

ONTARIO – Marijuana merchants seeking to start dispensaries in Ontario will have to pay nearly $14,000 to the city just to open the doors.

Operators are required to pay the city to apply to operate, and to obtain a business license and a bond – in all $13,700.

A city business license for a marijuana dispensary will cost $5,000 while the application costs $1,200. The bond proposed by city council president Norm Crume is set at $7,500.

Crume said he pushed for the bond because he felt the city needed “protection” in case a dispensary failed and didn’t pay its city marijuana sales tax of 3 percent.

“The one thing we were warned about is when a town first opens up, a whole bunch of people put up stores and then a whole bunch fail, and they end up owing everybody money,” said Crume.

Crume said when framed against the potential profits of a marijuana dispensary, posting a $7,500 bond wasn’t much to ask.

He said the bond makes sense.

“We have something different and unique in case someone bails out and they owe us back taxes,” said Crume.

Ron Verini, Ontario mayor, supports the bond.

“We need, obviously, a little cushion that we are at least paid something in case a dispensary goes out of business,” he said.

The money from the bond, license and application fee will go into the city’s general fund, said Verini.

Flora Gibbs, who plans to open a marijuana dispensary in Ontario called Cag Enterprises LLC, thinks the city bond is sensible.

“I think it’s good for the city to take safety precautions. I think with this industry, and what can be made, it’s kind of high but not,” said Gibbs.

Meanwhile Crume is growing weary of the marijuana issue.

“The only news we had is marijuana, marijuana and, oh, let’s see, marijuana,” said Crume last week. “It’s taken away from other important city business. However, you want to look at it, good or bad, it has dominated our workload.”

Voter approval of marijuana sales in November sparked a scramble by many to seek applications and stake out sites in Ontario.

Ontario isn’t the only Oregon city that has faced a recreational marijuana issue. Joseph, Klamath Falls, Gates, Sumpter and Clatskanie all voted to allow recreational marijuana business.

Ontario voters approved the measure to allow recreational marijuana sales, 1,923 to 1,460.

Reporter Pat Caldwell: [email protected] or 541-473-3377.