FARMINGTON — The Farmington Select Board agreed to conduct further research into reducing annual license fees for marijuana cultivation facilities before deciding on a proposed warrant article, members decided Jan. 27.

The proposal was presented by Melina Dumas of Dentons Law Firm in Portland, who spoke on behalf of Kendra Farms, doing business as Blue Sky. The request seeks a 50% reduction in local annual license fees for cultivation facilities operating in Farmington.

Dumas said the request is limited to cultivation licenses and does not apply to other marijuana-related businesses.

“Kender Farms is asking for the town to reduce the … annual license fees just for cultivation facilities in the town of Farmington by 50%,” she said. The reason for that is that the industry is “really struggling right now, especially in the (recreational) cannabis program for cultivation facilities.”

Dumas cited state excise taxes and federal restrictions as major challenges facing recreational cultivators.

“There’s a significant excise tax that was imposed on these businesses that isn’t in the medical program,” she said. “That is just a flat fee for the excise tax, regardless of the prices that you’re getting wholesale.”

She added that marijuana’s classification at the federal level also affects business operations.

“As you know, cannabis marijuana remains a Schedule 1 controlled substance,” Dumas said, noting that businesses cannot deduct ordinary business expenses on their federal taxes.

Dumas said recent federal actions acknowledging medical uses of cannabis would take time to have any practical effect.

“That’s all going to take time,” she said. “It’s not retroactive either, so that wouldn’t make enough of an impact on these businesses that are just trying to survive.”

She said some businesses have already begun shifting away from the recreational market.

“I’ve had clients that are transitioning back from (recreational) to the less regulated medical cannabis market because of the excise tax,” Dumas said.

Under the proposal, Tier 4 recreational cultivation facilities, currently assessed an annual municipal fee of $15,000, would see that fee reduced to $7,500. Outdoor cultivation fees of $7,500 would be reduced to $3,750.

“We’re asking for a relatively narrow impact on the town,” she said. “This is really just supporting local businesses that have been operating in a compliant fashion in town at the state and local level for a long time.”

She said the 50% reduction was intended to better align Farmington’s fees with those of other municipalities.

Dumas emphasized that the goal is not immediate approval, but allowing residents to decide the issue at town meeting.

“What we’re advocating for is to have this go up to the town, the citizens of the town, to vote,” she said.

Select Board members discussed the need to better understand how the original fees were set and how much revenue the town collects from cultivation licenses. They also indicated interest in reviewing whether the fees continue to reflect the actual cost of municipal oversight.

Board members said additional research would be conducted before determining whether the warrant article should be finalized and placed before voters.

A draft town meeting warrant is due by March 2, giving the board time to continue its review before taking further action.