Learn how to calculate fees related to the adoption of the emergency regulations related to the implementation of Senate Bill 833. Under the new regulations, processor, nursery, or cultivation licensees can make a one-time change to their license expiration date. Additionally, cultivation licensees can now submit a request to either place their license in limited operations status or to reduce the size of their cultivation license.
Based on the nature of the cultivation license change requested, DCC will calculate fees due or refund owed.
Calculating fees for limited operations status at time of renewal
When placing a cultivation license in limited operations status at time of renewal, the licensee will be responsible for paying 20% of the original cultivation license fee.
Example scenario
A licensee with a medium indoor license, chooses to reduce the size of the license to a small indoor license, at the time of renewal.
Calculation formula
$1,205.00 original cultivation license fee x 20% = $241.00 modified license fee.
Calculating fees for reducing canopy size at time of renewal
When reducing the canopy size of a cultivation license at time of renewal, the licensee will be responsible for paying the license fee associated with the reduced-size cultivation license selected.
Example scenario
A licensee with a medium indoor license, chooses to reduce the size of the license to a small indoor license, at the time of renewal.
Calculation formula
The licensee will be responsible for paying the annual license fee associated with the small indoor license, which is $35,410.00.
Calculating fees for one-time changes to an expiration date
Example scenario
A licensee renewed their processor license on October 1, 2023. The licensee would prefer to renew their license annually on February 1, and submits a request to make a one-time change the license’s expiration date, on May 1, 2024.
How a refund is calculated for the original cultivation license
| Step | Calculation formula |
|---|---|
| Step 1: Calculate the prorated daily license fee by dividing the annual processor license fee by 365 days in a year. | $9,370.00 annual processor license fee, divided by 365 days = $25.67 prorated daily license fee. |
| Step 2: Calculate the number of licensed days remaining in the original license term, by counting the number of days between the date of the request, May 1, 2024, and the original expiration date, October 1, 2024. | There are 153 days remaining in the original license term. |
| Step 3: Calculate the amount of credit the license is eligible for by multiplying the number of days remaining in the original license term by the prorated daily license fee. | 153 (Step 2) x $25.67 (Step 1) = $3,927.51 credit. |
How fees are calculated for a modified license term
| Step | Calculation formula |
|---|---|
| Step 4: Calculate the number of days in the modified license term, by counting the number of days between the date of the request, May 1, 2024, and the new expiration date on February 1, 2025 | There are 276 days in the modified license term. |
| Step 5: Calculate the fee for the modified license term by multiplying the number of days in the modified license term by the prorated daily license fee. | 276 (Step 4) x $25.67 (Step 1) = $7,084.92 modified license fee. |
| Step 6: Calculate the amount due, by subtracting the credit calculated in Step 3 from the modified license fee calculated in Step 5. | $7,084.92 (Step 5) – $3,927.51 (Step 3) = $3,157.56 due to DCC for the modified license term. |
Calculating fees for multiple license changes
How fees are calculated when a cultivation licensee changes their expiration date and makes one of the following cultivation license changes:
- Places their cultivation license on limited operations status, or
- Reduces the canopy size of the cultivation license
Example scenario
A licensee renewed their medium mixed-light tier 1 license on October 1, 2023. The licensee would prefer to renew their license annually on February 1, and plans to submit a request to make a one-time change to the license’s expiration date, on May 1, 2024. The cultivation licensee would also like to either place the cultivation license in limited operations status or request a reduced-size cultivation license and decides to calculate both fee options to inform their decision.
Calculating the fees due for making a one-time change of expiration date
| Step | Calculation formula |
|---|---|
| Step 1: Calculate the prorated daily license fee by dividing the annual medium mixed-light tier 1 license fee by 365 days in a year. | $25,970.00 annual medium mixed-light tier 1 license fee, divided by 365 days = $71.15 prorated daily license fee. |
| Step 2: Calculate the number of days remaining in the original license term, by counting the number of days between the date of the request, May 1, 2024, and the original expiration date, October 1, 2024. | There are 153 days remaining in the original license term. |
| Step 3: Calculate the amount of credit the license is eligible for by multiplying the number of days remaining in the original license term by the prorated daily license fee. | 153 (Step 2) x $71.15 (Step 1) = $10,885.95 credit |
After you have determined the amount of credit the licensee is eligible for, follow the steps for either (A) calculating the fees due for limited operations status or (B) calculating the fees due for reducing the canopy size of the cultivation license.
(A) Calculating the fees due for limited operations status
Follow Steps 1 – 3 (above) for calculating the fees due for making a one-time change of expiration date and then follow the steps below.
| Step | Calculation formula |
|---|---|
| Step 4: Calculate the number of days in the modified license term, by counting the number of days between the date of the request, May 1, 2024, and the new expiration date on February 1, 2025. | There are 276 days in the modified license term. |
| Step 5: Calculate the prorated daily license fee of the limited operations status by multiplying the annual license fee for a medium mixed-light tier 1 license by 20%, then dividing by 365 days in a year. | $25,970.00 medium mixed-light tier 1 license fee x 20% limited operations status = $5,194.00. Next divide $5194.00 by 365 days = $14.23 prorated daily license fee for limited operations status. |
| Step 6: Calculate the modified license fee by multiplying the number of days in the modified license term, by the prorated daily license fee for the limited operations status. | 276 (Step 4) x $14.23 (Step 5) = $3,927.48 modified license fee |
| Step 7: Calculate the amount due, by subtracting the credit calculated in step 3 from the modified license fee calculated in Step 6. | $3,927.28 (Step 6) – $10,885.95 (Step 3) = ($6,958.47) in remaining credit that will be refunded by the DCC. |
(B) Calculating the fees due for reducing the canopy size of the cultivation license
Follow Steps 1 – 3 (above) for calculating the fees due for making a one-time change of expiration date and then follow the steps below.
| Step | Calculation formula |
|---|---|
| Step 4: After completing Steps 1 – 3, calculate the number of days in the modified license term, by counting the number of days between the date of the request, May 1, 2024, and the new expiration date on February 1, 2025. | There are 276 days in the modified license term. |
| Step 5: Calculate the prorated daily license fee for the reduced-size license by dividing the annual license fee for a small mixed-light tier 1, by 365 days in a year. | $11,800.00 annual small mixed-light tier 1 license fee, divided by 365 days = $32.33 prorated daily license fee for the reduced-size cultivation license. |
| Step 6: Calculate the modified license fee by multiplying the number of days in the modified license term by the prorated daily license fee for the reduced-size cultivation license. | 276 (Step 4) x $32.33 (Step 5) = $8.923.08 modified license fee. |
| Step 7: Calculate the amount due, by subtracting the credit calculated in Step 3 from the modified license fee calculated in Step 6. | $8923.08 (Step 6) – $10,885.95 (Step 3) = ($1,962.87) in remaining credit that will be refunded by the DCC. |
Support
If you have questions about calculating a modified license fee, please contact payments@cannabis.ca.gov for assistance.
