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Home My WebLink AboutED Medical Cannabis Policy UpdateSAN RAFAEL 6. 1,, THE CITY WITH A MISSION Agenda Item No: 6.a Meeting Date: September 18, 2017 SAN RAFAEL CITY COUNCIL AGENDA REPORT Department: Economic Development Prepared by: Danielle O'Leary, City Manager Approval: Econ. Development Director TOPIC: SAN RAFAEL MEDICAL CANNABIS POLICY UPDATE SUBJECT: RECEIVE COUNCIL DIRECTION ON MEDICAL CANNABIS POLICY RECOMMENDATION: Accept staff report and provide direction. BACKGROUND: C46 The City of San Rafael has prohibited medical cannabis dispensaries since 1997, in response to the passing of the 1996 Compassionate Use Act, a ballot initiative known as Proposition 215. Since that time, no cannabis businesses have been permitted in City limits. At a January 2017 City Council study session, staff presented an overview of the Adult Use of Marijuana Act (AUMA), a ballot initiative known as Proposition 64 that legalized adult recreational use of marijuana in the State of California. Council directed staff to form a Council ad-hoc subcommittee to review a revised draft of the current medical cannabis policy and learn more about the State's developing regulatory framework under the Medical Cannabis Regulation and Safety Act of 2015 (MCRSA). The Medical Cannabis Council Ad -Hoc Subcommittee (MC Subcommittee) included Councilmember Kate Colin and Councilmember John Gamblin, City Manager, Police Chief, Fire Chief, Community Development Director, Assistant City Attorney, and the Economic Development Director. Over the course of several months, the subcommittee reviewed all license types available under the State's medical cannabis framework and developed a set of recommendations for full Council consideration. Since the passing of Proposition 64 (AUMA) on November 8, 2016, the City has received numerous inquiries from the public regarding the status of City regulations and the issuance of local commercial cannabis permits. The State of California plans to begin accepting medical and recreational commercial cannabis applications on January 2, 2018. However, this staff report is solely focused on the City's medical cannabis policy. FOR CITY CLERK ONLY File No.: 287 Council Meeting: 09/18/2017 Disposition: Provided direction to staff SAN RAFAEL CITY COUNCIL AGENDA REPORT / Paae: 2 ANALYSIS: The MC Subcommittee reviewed federal and state regulatory milestones to understand the evolution of legal medical cannabis and the implications for the City of San Rafael. At this time, the MC Subcommittee decided to only focus on medical, while maintaining a prohibition on recreational commercial cannabis activities. Based on these discussions, consensus was reached on exploring a limited and merit -based pilot medical cannabis program to meet the following objectives: 1. Discreet, low impact and minimal public interface 2. Provide safe patient access 3. Improve transparency and reduce public safety risks 4. Add new revenue to support city infrastructure and services 5. Create new jobs, produce artisan products 6. Promote industrial land retention and diversified industrial economy The pilot medical cannabis program would allow the City to permit a limited amount of cannabis businesses with a merit -based application process, which would need to be developed. The following State of California medical license definitions reviewed included: • Medical Cannabis Commercial Cultivation: any activity involving planting, growing, harvesting, drying, curing, grading, or trimming of cannabis. • Medical Cannabis Commercial Manufacturing MIPs (marijuana infused products): production of medical cannabis products using either infusion into cannabis edibles or topical products for direct sales to customers or cannabis retailers. • Cannabis Testing Laboratories: a laboratory, facility or entity that offers or performs tests of both adult use and medical cannabis or medical cannabis products that is both of the following: (1) accredited by an accrediting body (i.e., International Organization for Standardization (ISO)) that is independent from all other persons involved in commercial cannabis activity in the State, and (2) is licensed by the Bureau of Cannabis Control. • Medical Cannabis Delivery Services: the commercial transfer of cannabis or cannabis products to a customer, including the use by a retailer of any technology platform owned and controlled by the retailer. • Medical -use Cannabis Dispensary: As defined by the State, this is a license for medical cannabis cooperative, collective, dispensary, operator, or retailer that sells medical cannabis to the public. The table below outlines the 5 medical license types considered by the MC Subcommittee, along with consensus recommendations for Council's consideration: Cannabis License Types MEDICAL ONLY 1. Commercial Cultivation 2. Commercial Manufacturing MC Subcommittee Recommendations No changes - remain prohibited. a. Allow for a limited number of merit -based licenses (8) for Marijuana Infused Products (MIPs) MFG Type 6, N only (topicals + edibles) b. Prohibit manufacturing non- volatile and volatile extractions in all commercial zones. SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 3 3. Testing Laboratories 4. Medical Delivery Services 5. Medical -use Dispensary Allow for a limited number of merit - based licenses (4) for cannabis testing laboratories. Allow for a limited number of merit - based licenses (3) for medical cannabis delivery. No changes - remain prohibited. Under State regulation SB 94 or MAUCRSA (Medical Adult Use Cannabis Regulation Safety Act) the State currently requires separate State -issued licenses for medical cannabis sales and adult use recreation sales. If in the future a combined license is allowed, the City would revisit the pilot medical cannabis program. It is anticipated that the state's licensing regulations, when released in fall 2017, will have a short turnaround time during the emergency rule-making process. Staff will be monitoring all legislative and regulatory changes made by the State. FISCAL IMPACT: There are no fiscal impacts associated with this report item. Should the Council support the development of a Pilot Medical Cannabis Permitting Program, staff estimates revenues to the City could exceed $1 Million in revenues, with the passing of a San Rafael cannabis excise tax. OPTIONS: The City Council has the following options to consider on this matter: 1. Accept report and approve MC Subcommittee recommendations. 2. Accept report and approve MC Subcommittee recommendations with modifications. 3. Direct staff to return with more information. 4. Take no action. RECOMMENDED ACTION: 1. Accept report and MC Subcommittee recommendations. 2. Direct staff to: a. Develop medical cannabis merit -based application process. b. Create and codify a pilot medical cannabis program in Title: 10 Businesses, Professions, Occupations, Industries and Trades for Council approval. c. Review zoning and recommend zoning options in office, commercial and industrial zones for Council approval. d. Develop medical cannabis compliance program to address possible nuisance issues. e. Develop medical cannabis excise tax policy for future Council consideration. f. Develop ordinance prohibiting adult recreational use of marijuana (AUMA) commercial activities in City limits. ATTACHMENTS None. 4 IftSAN RAFAEL STAFF REPORT APPROVAL THE CITY WITH AMISSION ROUTING SLIP Staff Report Author: Danielle O'Leary Date of Meeting: 09/18/2017 Department: Economic Development Topic: San Rafael Medical Cannabis Policy Subject: Receive Council Direction on San Rafael Medical Cannabis Policy U )date Type: (check all that apply) ❑ Consent Calendar ❑ Public Hearing 0 Discussion Item ❑ Resolution ❑ Ordinance ❑ Professional Services Agreement ❑ Informational Report *If PSA, City Attorney approval is required prior to start of staff report approval process Was agenda item publicly noticed? ❑ Yes ONo I Date noticed: I ❑Mailed ❑Site posted ❑Marin IJ Due Date Responsibility Description CompletedDate Initial / Comment DEPARTMENT REVIEW FRIDAY Director Director approves staff 9/5/2017 0 noon report is ready for ACM, DO 9/1 City Attorney & Finance review. CONTENT REVIEW TUESDAY Assistant City Manager ACM, City Attorney & Click here to morning Finance will review items, enter a date. 9/5 make edits using track 9/11/2017 FRIDAY noon 9/8 MONDAY morning 9/11 TUES noon 9/12 City Attorney changes and ask questions using comments. Items will Click here to be returned to the author enter a date. Finance by end of day Wednesday. DEPARTMENT REVISIONS Author Author revises the report Click here to based on comments enter a date. receives and produces a final version (all track changes and comments removed) by Friday at noon. ACM, CITY ATTORNEY, FINANCE FINAL APPROVAL Assistant City Manager ACM, City Attorney & Click here to Finance will check to see enter a date. their comments were City Attorney adequately addressed and Click here to sign -off for the City enter a date. Manager to conduct the Finance final review. Click here to enter a date. City Manager Final review and approval 9/13/2017 0 0 LG 0 0 709 a 0 Jim