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Home My WebLink AboutED Medical Cannabis Policy Update PPTM�DICAL CANNABIS POLICY UPDATE SEPTEMBER 18, 2017 1 'ONIGH'1 ' • Cannabis regulation: federal, state, local • Medical Canna -economy; by the nu m born • SFS Medical Cannabis Subcommittee Consensus * Considerations; Next Steps N¢r, AAs��r i DOJ: COLE MEMO 1 (2013) Enforcement guided by 8 priority factors. Department of Justice drafted in response to Colorado's legalization. This guidelines did not contemplate industry proceeds, and how those should be handled. DOJ: COLE MEMO 2 {2014} Banking memo, tracks same 8 enforcement priorities in Cole Memo #1. Lays out guidance for banks to provide banking services to the cannabis industry. DEPARTMENT OF TREASURY: FIN EN MEMO (2014) Guidelines lay out a path for banks to follow. After 311 years since this memo was issued, therm has been no enforcement for any ban ks servicing the cannabis industry. RHfABAHER- FAIT-BLUMENUR AMENDMENT (2014) Doesn't al low for use of federal funds to be used on cannabis businesses in compliance with state regulations. Must be renewed annually. URBEL , BLU IENAUR SMALL BUSINESS TAX EQUITY ACT (2017) Legislation will amend Section 280E of the IRS Code to allow cannabis businesses operating in compliance with state law to utilize common tax deductions and credits. COMPASSIONATE USE ACT (1996) Ballot initiative known as Proposition 215 made California the first state to decriminalize medical cannabis. In the 20 yea rssince then, medical cannabis has operated under a limited role of regulation. SENATE BILL 420 (2003) California Legislature passed Senate Bill 420. which added (section 11362.7 et seq.) to the California Health and Safety Code relating to controlled substances. SB 420 estabilished a basic framework for the legal operation of medical cannabis entities. MEDICAL CANNABIS REGULATION AND SAFETY ACT (2015) Introduced a new sta te-wide st ru ctu re for the governance of the California medical cannabis industry; state may collect licensing and enforcement fees a nd penalties from cannabis businesses. ADULT USE OF MARIJUANA ACT- UM (NOV 2016) Ballot initiative Proposition 64 approved by California voters for the legalization of recreational cannabis. SENATE BILL 94 (JUNE 2017) In late June, the Legislature passed and the Governor signed into law the Medicinal andAdult-Use Cannabis Regulation and SafetyAct (MAUCRSA, also known as Senate Bi 1194), which creates one regulatory system for both medicinal and adult -use cannabis. 7A7 YL' SAN RAFAEL DISPENSARY BAN (19 97) Enacted ordinance1713 banning all medical can nabisdispensaries within any district of the city. JANUARY 2017 COUNCIL STUDY SESSION Proposition 64 passed in Novernber 2016, staff provided Council with a legislative overview and discussed local options for regulating cannabis businesses. Decision: form Medical CannablsAd-Hoc Subcommittee f MC Subcorn mitteej. MC SUBCOMMITTEE MITTEE Reviewed license categories and developed recommendations to explore: discreet low impact/minimal public interfacing medical cannabis businesses for full Council consideration. TONIGHT'S DECISION Provide direction on medical cannabis regulation in San Rafael. The State of California will begin accepting commercial medical and adult -use recreational cannabis applications January 2. 2018. LOCAL I D IXIV17-ELL I POSSIBILITY -L'll%IIL Y DIC.Ii EJYS0--�,Y* 29 States and the District of Columbia have some form of legal cannabis. California's the most populous state to enter the legal cannabis market. C�1LI�'ORNI�1 MEDICAL CANNABIS INDUSTRY - CANNA ECONOMY JOBS + WORKFORCE • 1.000 Manufacturing Businesses; 4.000+ employees ■ 1200+ Laboratorjobs 6501 Retail sectorjobs REVENUE POTENTIAL * North American cannabis sa les grew by 30% in 2016 to $.7 Billion * North American sales are projected to top $20.2 Billion by 2021.. compounb annual growth rate of 25% a' 01 ;% ' T - INNOVATION 'The only consumer industries to reach 5 billion in annual spending and post 25% compound annual growth were cable television (19%) in 1990's and broadband internet (29%) in 2000's." - Arcview S � BILLI0_.,.....V 16 CALIFORNIA'S 1EDI AL CANNABIS REVENUE UE PROJECTIONS - 2017 California Standard Regulatory I m pact AnalysisMGRS.$ - S.4.2 _,,.1JILLI0A_ CALIFORNIA MANUFACTURED ED MEDICAL CANNABIS $16M direct, $17M indirect and $9M induced economic activity S 70 JilILLIO-A.- MARIN COUNTY CONSUMPTION ESTIMATES ADULT 18.. r CONSLNSUS Explore discreet, to impact and minimal pudic interface uses; medical cannabis only Provide safe patient access Improve transparency, reduce public safety risks Acid new revenue to support city infrastructure and services Create n w j io f produce artisan products Promote industrial land retention and reduce speculation 5° I 10 C1�-1�1�BIS PI?OGR14M- 1 PILOT - MERIT BASED - LIMITED MEDICA LONLY LABS (4) MEDICAL CANNABIS LICENSES • 1290 Direct and it ISO Standards Ind ireet jobs 17025 • Batch testing ■ Employment of limits spilled lab • Strict State technicians license ■ Verification regulations of personnel • Located i n a Sec u rity urban settings & ,access Control I!4 OF rt C,qAl'1 ' MI G (8) Manufacture Type 6 (N) non-volatile (MIPs) • Marijuana Infused Products (MIPs): topicals and edibles • No distilling or manufacturing of raver product onsite. Commercial kitchens. • Label & Tested • Lige Scats & Background Checks • State License Fees/Seller's Permit BOE • Bonding Requirement • Facility compliance and video surveillance • Standard Operating Procedures • Track & Trace b.. Elm • i� V IP+IL, MW .--� 04 0 I fl 35% EDIBLES $180 million worth of edibles last year. poi CONCENTRATES Purified concentrates continue to drive demand as consumers move away from flower. 5% TOPICALS non - psychoactivecannabis-infused lot;ons, balms, saIves and oils are absorbed directly through the skin for localized pain and inflammation relief, S'1 X11 S DLITIVI.JiRy SAFETY & SECURITY FOR THE CONSUMER • Medical cannabis plays a role in mitigating opioid crisis • Many patients rely on access to cannabis as part of their health care regime • Patients need access to a variety of products in a safe environment • Patient demographics: more women and older people as well as pediatric • 40% of medical cannabis is transferred to consumers aria delivery service STATE DELIVERY REGULATIONS • Background checks,. delivery cars only • Secure lock box and temperature control capability regulatory provisions • Bona fide orders: Patient record keeping • Set hours of operation LEGAL CANNABIS - WHAT'S THE DEMAND? California 12 Month Ending July 2017 Cannabis Consumption - BD Analytics dz. 101)y Total California Legal Market: .7 Billion Total California Delivery - Service Market Value $700 Million % of Legal Cannabis Sales 1)L'L1V-h.'RYS7A7S LEGAL CANNABIS - CALIFORNIA & MARIN BDAna lytics Estimates Population 37,253,956 252,409 Papulation > 18 27,170,431 191 70 Deliverer Service Number -2,000 14 0 -13,600 potential patients per delivery service D.k'LIVLRYS7A1 S RECO1�I�VIE �VD� TIONS MEDICAL CANNABIS INDUSTRY - SAN R FAEL PROGRAM COUNCIL CONSIDERATION. NET STEPS. PERMITTING • Fi re Police • Code Enrorcement • Business License/Tax Planning. Zoning/Land use clearance * Building:Tenant Improvements ENFORCEMENT • Calls for service a Nuisance, noise, smell Compliance program State regulators a Local regulators LAND -UE + TAX POLICY • Minimize speculative conversion of industrial areas • Maintain State spatial requirements • Permit and application fees • Voter approved excise tax vs. Sales tax R.ECOMME-1VDATIONS PROHIBIT Commercial Cultivation - Manufacturing 6 and 7 processes: exception MIPs (MFG Type 6 ) - Retail Dispensary storefronts • Recreational cannabis COUNCIL CONSIDERATION. NEXT STEPS. f PERMIT + LIMIT 7 raw Develop Merit - Based Medical Cannabis Pilot Program that allows for - (4) Testing Labs (S) MFG. Type 6 (N) (3) DeIivery only medical TAX POLICY Develop San Rafael cannabis excise tax policy For Council consideration and voter approvaI. RECOMMENDATIONS COUNCIL CONSIDERATIONS. NEXT STEPS. UNI DE Codify Pilot Cannabis Program in Title 10: Businesses. Professions, Occupations, Industries. ano Trades. ZONING (MEDICAL ONLY) Review Zoning Codes + Recommend- - OFFice (limited) Commercial (limited) Industrial (limited) COMPLIANCE Deel op ca n na bi s compliance program to address: security. odor, lighting, noise, revenue compliance. M 0 L!, 11 Fwj Danielle O'Leary, Director Economic Development and Innovation da n ie I le.o lea ry oc ityofsa n rafael .o rg 415.485.3460