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CC Resolution 14455 (Medical Cannabis Resolution)Medical Cannabis Resolution 1-16-2018 City of San Rafael RESOLUTION NO. 14455 RESOLUTION OF THE SAN RAFAEL CITY COUNCIL ADOPTING MEDICAL CANNABIS PILOT PROGRAM POLICIES, PRACTICES AND PROCEDURES FOR ADMINISTERING AND ENFORCING THE MEDICAL CANNABIS PILOT PROGRAM SET FORTH IN SAN RAFAEL MUNICIPAL CODE CHAPTER 10.96, REGULATING COMMERCIAL CANNABIS ACTIVITY WITHIN SAN RAFAEL CITY LIMITS. WHEREAS, in 2015, the State Legislature adopted the “Medical Marijuana [now “Cannabis”] Regulation and Safety Act” (MCRSA) establishing a state licensing process for “commercial cannabis activity,” defined as including “cultivation, possession, manufacture, processing, storing, laboratory testing, labeling, transporting, distribution, or sale of medical cannabis or a medical cannabis product, except as permitted for qualifying patients and primary caregivers;” and WHEREAS, on November 8, 2016, the voters of the State of California enacted Proposition 64, the “Control, Regulate and Tax Adult Use of Marijuana Act” (AUMA), to allow for nonmedical adult use of cannabis, and implementing regulations were subsequently developed by the state agencies for this act as well; and WHEREAS, in July 2017, the Governor signed Senate Bill 94, entitled the “Medical and Adult-Use Cannabis Regulation and Safety Act” (MAUCRSA), which took effect immediately. The MAUCRSA directed that the MCRSA’s medical cannabis regulations be coordinated with AUMA’s nonmedical cannabis regulations; and WHEREAS, on December 4, 2017, the City Council enacted Ordinance No. 1949, an urgency ordinance adding new Chapter 10.96 to the San Rafael Municipal Code to limit the commercial cannabis activities that will be allowed in the City of San Rafael starting on January 2, 2018 to those determined by the City Council to be beneficial rather than detrimental to the residents, workers and visitors in the City; and WHEREAS, Ordinance No. 1949 provided that the City Council shall, by resolution, adopt reasonable regulations for the license process for the medical commercial cannabis activities permitted within the City, and for the number of each license type to be issued; NOW, THEREFORE, BE IT RESOLVED, that the City Council hereby adopts the following Medical Cannabis Pilot Operator Licensing Program: SECTION 1. PURPOSE AND INTENT It is the purpose and intent of this resolution to regulate medical cannabis businesses located within the San Rafael city limits, in order to promote the health, safety, and general welfare of residents and businesses within the City. This resolution governs the establishment and operation of cannabis testing laboratories, medicinal cannabis infused product manufacturers, and medicinal cannabis delivery. Medical Cannabis Resolution 1-16-2018 City of San Rafael SECTION 2. DEFINITIONS For the purposes of this Program, the definitions below shall apply: (a) “Applicant” means an owner applying for a City Medical Cannabis Business Operator license. (b) “Bureau” means the Bureau of Cannabis Control within the California Department of Consumer Affairs. (c) “City” means City of San Rafael. (d) “Cannabis” means all parts of the plant Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture, salt, derivative, mixture, or preparation of the plant, its seeds, or resin. “Cannabis” also means the separated resin, whether crude or purified, obtained from cannabis. “Cannabis” does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this division, “cannabis” does not mean “industrial hemp” as defined by Section 11018.5 of the Health and Safety Code. (e) “Cannabis Testing Lab” means a laboratory, facility, or entity in the State that offers or performs tests of cannabis or cannabis products as further defined in SRMC 10.96.040. This sort of use is regulated by the State of California as a Type 8 Cannabis license. (f) “Cannabis Delivery” means the commercial transfer of medicinal cannabis or cannabis products to a customer. “Delivery” also includes the use by a retailer of any technology platform. This sort of use is regulated by the State of California as a Type 9 Cannabis license. (g) “Cannabis Manufacturing” means producing edible or topical products that include pre extracted cannabis oils, to create edibles, beverages, capsules, vape cartridges tinctures or topical. This sort of use is regulated by the State of California as a Class N (Infusions) Cannabis license. Cannabis manufacturing may also include shared use of a manufacturing facility by multiple businesses that perform manufacturing, (ie commercial kitchen). Shared manufacturing is regulated by the State of California as Type S Cannabis license. (h) “Licensee” means any person holding a City Medical Cannabis Business Operator License. (i) “Medical cannabis” or “Medical cannabis product” means cannabis or a cannabis product, intended to be sold for use pursuant to the Compassionate Use Act of 1996 (Proposition 215), found at Section 11362.5 of the Health and Safety Code, by a medicinal cannabis patient in California who possesses a physician’s recommendation. Medical Cannabis Resolution 1-16-2018 City of San Rafael (j) “Operator License” means a City Medical Cannabis Business Operator license. (k) “Owner” means any of the following, as defined in Section 26001 of the Business and Professions Code: 1) A person with an aggregate ownership interest of 20 percent or more in the person applying for a license or a licensee, unless the interest is solely a security, lien, or encumbrance. 2) The chief executive officer of a nonprofit or other entity 3) A member of the board of directors of a nonprofit 4) An individual who will be participating in the direction, control, or management of the person applying for a license. (l) “Person” includes any individual, firm, partnership, joint venture, association, corporation, Limited Liability Company, estate, trust, business trust, receiver, syndicate, or any other group or combination acting as a unit, and the plural as well as the singular. (m) “Purchaser” means the customer who is engaged in a transaction with a licensee for purposes of obtaining medical cannabis or medical cannabis products. (n) “Qualified patient” means person who is entitled to the protections of Section 11362.5, but does not have an identification card issued, as defined by 11362.7 of the Health and Safety Code. (o) “Sell”, “sale,” and “to sell” include any transaction whereby, for any consideration, title to cannabis or cannabis products is transferred from one person to another, and includes the delivery of cannabis or cannabis products pursuant to an order placed for the purchase of the same and soliciting or receiving an order for the same. SECTION 3. LICENSING PROCESS (a) Any person seeking to sell and or deliver, manufacture, or providing laboratory testing services located in San Rafael city limits must first obtain a Medical Cannabis Business (MCB) operator license prior to operating. (b) The Medical Cannabis Business Operator Licensing Program will make the following limited licenses available: • Testing Labs (State License Type 8): 4 licenses • Medical Infused Products Manufacturing (State License Type N): 8 licenses • Medical Delivery (State License Type 9): 4 licenses SECTION 4. REVIEW AND ACTION ON APPLICATIONS (a) The initial Medical Cannabis Business Operator License Application Review Committee (“Committee”_ includes (1) MC Subcommittee Councilmember, Police Chief, Fire Chief, Community Development Director and Economic Development Director, and/or their designees, to review and rank applications. (b) The Medical Cannabis Business (MCB) operator license application ranking process shall consist of the following areas of evaluation: Medical Cannabis Resolution 1-16-2018 City of San Rafael • Business Executive Summary (20 POINTS -MAXIMUM) • Safety and Security Plan (20 POINTS - MAXIMUM) • Patient Benefits & Education (20 POINTS - MAXIMUM) • Local Enterprise Preference (10 POINTS - MAXIMUM) • Qualifications of Principals (20 POINTS - MAXIMUM) • Community Benefits (10 POINTS - MAXIMUM) An application is required to receive a total of 85 points to move forward. The Committee shall rank all the applications and shall issue a written decision setting forth the ranking for each application, the ranking of each application in each of the ranking categories, and an explanation of the facts and reasoning supporting the rankings. The Committee shall serve a copy of its written decision on each applicant by email. An applicant who has received a ranking of less than 85 points may appeal that decision to the City Manager or his or her designee, by filing a written appeal with the City Manager’s office within five (5) business days after the date of service of the written ranking decision on the applicant. The appeal shall not be accepted for filing unless accompanied by an appeal fee in an amount determined by resolution of the City Council. In determining the appeal, the City Manager/designee will review the Committee’s written decision on the appellant’s application and the application itself. In addition, within five (5) business days after the filing of the appeal, the City Manager/designee shall set a time for a hearing, not to exceed two hours in length, at which the appellant may appear to review the Committee’s decision and to present evidence or argument why the Committee’s ranking should be modified. The hearing shall occur no later than thirty (30) days following the filing of the appeal unless another time is agreed to by the appellant. The hearing may be recorded by audiotape or written minutes. Within ten (10) business days after completion of the hearing on the appeal, the City Manager/designee shall issue a written decision on the appeal shall either confirming or modifying the ranking given by the Committee. The decision shall be in served upon the appellant by email, or regular mail through the United States Post Office. The City Manager’s decision will be final, with no appeal to the City Council, and shall be subject to judicial review according to the provisions and time limits set forth in Code of Civil Procedure Section 1094.6; however the filing of any such action shall not stay any lottery or subsequent award of operator licenses as provided herein. After the appeal period has run without the filing of any appeals, or after the final decision by the City Manager on any and all appeals, if the Committee determines that the number of pre-screened and ranked applicants exceeds 100% of the maximum number of licenses available, then a lottery will be conducted after the ranking round. (c) Operator Selection. W ithin 45 days of notification of written and e-mail notification, operators will have the ability to look for sites within permitted zoning districts and return with identified site to apply for zoning clearance, business license tax and operator Medical Cannabis Resolution 1-16-2018 City of San Rafael license issuance. (d) Zoning Clearance, Business License Tax, and Operator permit issued. Once the operator has found a business location, and has an executed lease agreement, or signed application by the property owner, planning staff will confirm zoning clearance. The applicant can then proceed with filing for a business license tax certificate, and the operator license will be issued. SECTION 5. FEES The Medical Cannabis Business Operator License application and renewal fees are based on a cost-recovery model for application intake, processing, and compliance monitoring. Process Steps Staff Coordination Per Applicant Cost Application Intake Econ. Dev Coordinator Review Time: 1-2 hours $200 Criminal Background Check Police Review Time: 1 hour $100 Application Review and Ranking Econ. Development Director, Police Chief, Fire Chief, Community Development Director, (1) MC Subcommittee Council member Review Time: 2-3 hours $1,500 Operator Notification Econ. Development Coordinator/Director Review Time: 1 hour $100 Zoning Clearance, Business Tax Certificate, Operator License Issuance Senior Planner, Revenue Manager, Economic Development Director Review Time: 2-3 hours $300 Compliance Inspections Senior Code Enforcement Officer Review Time: 3-4 hours $600 Annual Gross Receipts Audits Contract with Outside Agency Review Time 3-4 hours $800 SECTION 6. OPERATING REQUIREMENTS All Medical Cannabis Business operator licensees shall comply with all of the following operating requirements: (a) The licensee shall meet all operating requirements of the Medicinal and Adult-use Cannabis Regulation and Safety Act, and requirements set forth by the Bureau and the California Department of Public Health. Medical Cannabis Resolution 1-16-2018 City of San Rafael (b) The licensee shall obtain and maintain the State of California license for the equivalent State cannabis license type. Obtain and maintain all other required State and local licensees, permits, or approvals as required. (c) Odor Control. No cannabis odors shall be detectable outside the commercial facility. (d) Advertising and Marketing Restrictions. All signage shall meet the City zoning code’s sign requirements and shall not advertise any activity related to cannabis. (e) Operating Hours. A licensee may operate between the hours of: 1) Medical Delivery: 9AM to 9PM up to seven days a week, unless modified as condition of license to address site specific conditions. 2) Cannabis Testing Labs: 7AM – 6PM up to seven days a week, unless modified as condition of license to address site specific conditions. 3) Cannabis Infused Product Manufacturing: 7 AM – 6 PM, evenings available as a condition of the license; up to seven days a week, unless modified as condition of license to address site specific conditions. (f) Contact Person. A licensee shall provide the City with the name and phone number of an on-site community relations staff person or designee to whom one can provide notice if there are operating concerns. The licensee shall make a good faith effort to encourage residents to call this person to try to solve operating concerns before any calls or complaints are made to the City. SECTION 7. TERMS OF LICENSE (a) Licenses issued under this resolution shall be valid for 12 months from the date of issuance. SECTION 8. LICENSE SUPENSION, MODIFICATION AND REVOCATION (a) Any license issued under the terms of this resolution may be suspended, modified, or revoked by the Economic Development Director, or his or her designee, for cause including but not limited to violation of any the requirements or provisions of this resolution, or conflicts with State law. (b) Written Notice Required. The Economic Development Director, or designee, before revoking or suspending any Medical Cannabis Business operator license shall serve the licensee with written notice of revocation or suspension, provided in the manner set forth in Section 1.08.060 of the San Rafael Municip al Code, of the alleged grounds for revocation or suspension and the date for a hearing, to be held no less than ten (10) days and no more than sixty (60) days after the service of the written notice , to consider whether the Medical Cannabis Business operator license shall be revoked or suspended. (c) Hearing. The Economic Development Director, or designee, shall appoint a hearing officer to hear and consider all evidence at the hearing. The hearing may, after being Medical Cannabis Resolution 1-16-2018 City of San Rafael commenced within the time specified pursuant to subsection (b) of this section, be continued for good cause by the hearing officer from time -to-time. The hearing officer may require such legal briefing as may be required to address any issues raised at the hearing. (d) Notice of Decision; Judicial Review. Within a reasonable time, but not more than thirty (30) days following the conclusion of the hearing, the hearing officer shall issue a written decision as to whether the Medical Cannabis Business operator license shall be revoked or suspended, supported by factual findings and determinations referenced by supporting evidence. The written decision shall be served on the operator licensee as provided in Code of Civil Procedure Section 1094.6, with a copy submi tted to the city clerk and the city attorney. The written decision of the hearing officer shall be final and shall be subject to judicial review according to the provisions and time limits set forth in Code of Civil Procedure Section 1094.6 . SECTION 9. TRANSFER OF LICENSE (a) A licensee shall not operate under the authority of a Medical Cannabis Business operator license at any location other than the address stated in the application for the license. (b) The Medical Cannabis Business operator license is nontransferable. SECTION 10. ENFORCEMENT It is unlawful for any person to violate any provision or fail to comply with any of the requirements of this resolution, and any such violation shall be enforceable in accordance with the provisions of Chapters 1.40, 1.42, 1.44, and 1.46 of the San Rafael Municipal Code. SECTION 11. SIX-MONTH PROGRESS REPORT AND REVIEW Six months following the adoption of the resolution, the Economic Development Director shall prepare a progress report on the Medical Cannabis Pilot Operator Licensing Program for Council review. BE IT FURTHER RESOLVED that any amendments to the Medical Cannabis Pilot Operator Licensing Program Policies, Practices and Procedures as deemed necessary from time-to-time shall require an amendment to this resolution by City Council action. I, LINDSAY LARA, Interim City Clerk of the City of San Rafael, hereby certify that the foregoing resolution was adopted at a regular meeting of the City Council on the 16th day of January 2018. AYES: Councilmembers: Bushey, Colin, Gamblin, McCullough & Mayor Phillips NOES: Councilmembers: None ABSENT: Councilmembers: None ____________________________ Lindsay Lara, Interim City Clerk