East Dubuque council raises cannabis, video gaming fees to reinvest in community

Cannabis license fees

East Dubuque receives regular sales tax and an additional 3% excise tax from sales at any cannabis dispensaries within city limits.

“If you want the dispensaries to do more for our town, you would increase the license fee,” City Manager Loras Herrig said.

Noting that some Illinois communities charge as much as $180,000 for an annual license, he proposed several ordinances that would increase the annual permit fee for cannabis cultivation facilities and dispensaries from the current $1,500.

The council unanimously voted for a $25,000 annual license fee.

“We’ve got a lot of projects going on, as we all know,” Council Member Chad Biermeier said. “A lot of money is going to go to those projects, so if … we can raise that fee to hit some of these things, I think it’s a good decision.”

Only one dispensary — The Dispensary East Dubuque, 1709 Illinois 35 N. — operates in the city. Owner Dan Dolan could not be reached for comment Tuesday.

In December, the council reduced the minimum distance between licensed dispensaries from 15,000 feet to 5,000 feet, paving the way for up to two additional establishments to open within city limits.

New businesses would be subject to the increased fee prior to their opening. Dolan’s existing license is due for renewal in May, Herrig said, at which point he would pay the elevated fee.

Video gaming

City leaders also are taking advantage of a recent change to state law that enables officials in some cities to impose an annual fee of $250 per video gaming terminal. The fee previously was capped at $25 per year.

The East Dubuque council unanimously approved increasing the fee to $250 annually.

A recent update to the new law requires that the fee be shared between the owners of the gaming terminals and businesses in which they are located, so Herrig proposed developing a program to reimburse establishment owners for their increased costs.

“The goal is never to charge the bar owners more,” he said. “It was to get increased revenue for the city.”

Currently, 15 East Dubuque establishments host 84 video gaming terminals. At the new rate, they would generate $21,000 in revenue for the city each year before reimbursements, which would reduce new city revenues to $10,500.

The new terminal fees take effect Dec. 1.

Herrig intends to meet with terminal hosts today to solicit feedback.

Mike Meyer, co-owner of Incognito, at 79 Sinsinawa Ave., said he is fine with the arrangement but is confused by the state’s sudden shift to split the fee.

“It’s all politics,” he said. “It’s a guessing game every month.”