HomeMy WebLinkAboutED Cannabis Regulation Ordinance____________________________________________________________________________________
FOR CITY CLERK ONLY
File No.: 287
Council Meeting: 12/04/2017
Disposition: Ordinance 1949 Adopted
Agenda Item No: 7.a
Meeting Date: December 4, 2017
SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: Economic Development
Prepared by: Danielle O’Leary,
Econ. Development Director
City Manager Approval: ______________
TOPIC: CANNABIS REGULATION
SUBJECT: AN URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN
RAFAEL, PURSUANT TO CALIFORNIA GOVERNMENT CODE SECTION 36937(b),
AMENDING TITLE 10 OF THE SAN RAFAEL MUNICIPAL CODE TO ADD NEW
CHAPTER 10.96 REGULATING CANNABIS BUSINESSES WITHIN CITY LIMITS,
SPECIFICALLY AUTHORIZING BY LICENSE MEDICAL CANNABIS DELIVERY,
MEDICAL CANNABIS PRODUCT MANUFACTURING, AND CANNABIS TESTING ;
AND PROHIBITING NONMEDICAL CANNABIS BUSINESSES
RECOMMENDATION:
Hold a public hearing and adopt urgency ordinance by a 4/5 vote of the Council.
BACKGROUND:
This year has been a bellwether year for California cannabis legislation, with the passing of voter
initiative Proposition 64, the Control, Regulate and Tax Adult Use of Marijuana Act, also known as
(AUMA), cities and counties throughout California are revisiting local cannabis regulations to address a
legal cannabis regulatory landscape.
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.
On November 8, 2016, the voters of the State of California enacted Proposition 64 to allow for
nonmedical/recreation adult-use. The developing regulatory framework in AUMA establishes a
comprehensive system to legalize, control and regulate the cultivation, processing, manufacture,
distribution, testing and sale of nonmedical/recreation adult-use cannabis.
In response to the election results, the San Rafael City Council, at a January 2017 study session,
reviewed the statutory law of AUMA and instructed staff to form a City Council ad-hoc subcommittee to
review San Rafael’s cannabis policies. The Medical Cannabis Council Ad-Hoc Subcommittee (MC
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2
Subcommittee) included Councilmember Kate Colin and Councilmember John Gamblin. Staff support
included the: 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
Medical Cannabis Regulation and Safety Act of 2015 (MCRSA) and developed a set of
recommendations for full Council consideration.
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. MAUCRSA reconciles the
State’s medical cannabis regulations of the Medical Cannabis Regulation and Safety Act (MCRSA) with
AUMA’s nonmedical/recreation adult-use cannabis regulations. The State issued the newly revised
regulations on November 16, 2017 under their emergency rule making process.
ANALYSIS:
Tonight, the City Council will be reviewing the first of many steps to enact local cannabis regulations for
San Rafael. The first step begins with creating a cannabis urgency ordinance in San Rafael’s Municipal
Code that outlines what the City will regulate and prohibit before the State of California begins
accepting cannabis applications on January 2, 2018. State law reserves to local jurisdictions the right to
impose additional local regulations on medical and nonmedical/recreation adult-use commercial
activities, and to prohibit them entirely if they choose to do so.
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. The MC Subcommittee decided
to only focus on medical, while prohibiting nonmedical/recreation adult-use commercial cannabis
activities for now. Consensus was reached on exploring a limited number of medical cannabis permits
in San Rafael to meet the following objectives:
• Discreet, low impact and minimal public interface
• Provide safe patient access
• Improve transparency and reduce public safety risks
• Add new revenue to support city infrastructure and services
• Create new jobs, produce artisan products
• Promote a diversified economy
Urgency Cannabis Ordinance
Ordinarily, to adopt an ordinance the City Council must approve introduction of the ordinance at a first
meeting, and then finally adopt it at a second meeting not less than 5 days later. Additionally, once
adopted, the ordinance normally will not become effective for 30 days. However, Government Code
Section 36937(b) authorizes a city council to adopt at a single meeting an “urgency” ordinance that will
take effect immediately, in cases where the council makes findings that it is required “for the immediate
preservation of the public peace, health or safety” and the ordinance is passed by a four-fifths (4/5) vote
of the city council.
Staff is recommending that the Council adopt the attached ordinance, amending the City’s municipal
code to add a new chapter 10.96 regulating commercial cannabis activity in San Rafael city limits, as
an urgency ordinance, in order to advance local regulations before the State of California begins
accepting commercial cannabis applications on January 2, 2018. Staff recommends that the Council
may find that immediate adoption is necessary f or the immediate preservation of the public peace,
health or safety, because without a clear statement as to which commercial cannabis activities will be
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 3
permitted in San Rafael, there is a possibility that state law will issue licenses for a much wider variety
of commercial cannabis activities in the City than the MC Subcommittee has recommended.
The proposed ordinance follows the recommendations proposed by the MC Subcommittee:
Permitted Medical Cannabis Commercial Operations
Authorize a limited number of commercial medical cannabis operator licenses:
• Medical cannabis delivery (State License Type 9)
• Medical cannabis product manufacturing (State License - Class N)
• Cannabis testing lab (State License – Type 8)
The State of California will only be providing cannabis testing labs with one license to service both
medical and nonmedical/recreation adult-use for public safety reasons.
Prohibited Medical Cannabis Commercial Operations
The new ordinance prohibits the following commercial medical cannabis activities:
• Cultivation, processing and some manufacturing activities
• Dispensaries
Prohibited Nonmedical/Recreation Adult-use Cannabis Commercial Operations
The new ordinance also prohibits:
• All commercial nonmedical/recreation adult-use cannabis activities allowed under AUMA
pending further staff reviews of the State’s new MAUCRSA regulations.
The permitted medical cannabis commercial licenses listed in the urgency ordinance will require future
Council approval by resolution to decide on the number of operator licenses that will be available under
San Rafael’s pilot medical cannabis program. A draft resolution and application process, along with
zoning recommendations will come before Council in January 2018.
FISCAL IMPACT:
There will be future fiscal impacts associated with regulating commercial medical cannabis in San
Rafael city limits including:
• Local Taxing Options: evaluate special tax vs. general tax for consideration of a San Rafael
cannabis excise tax.
▪ Special tax: must be approved by two-thirds of local voters and is levied for a specific
purpose; next eligible election cycles June 2018 or November 2018.
▪ General tax: can be approved by a simple voter majority; next eligible election for a
Cannabis General Excise Tax would be 2020.
• Excise Revenue Tax Projections: with a local tax in place, staff estimates the general fund
could net approximately $1 million in revenues depending on the size and scope of the
licensing process.
• Administrative Staff Time: for creating an operator licensing program, processing applications
and annual renewals, collecting business license taxes and conducting oversight activities.
• Administrative Cost Recovery Fees: recover the reasonable regulatory costs for issuing
licenses and permits, performing investigation, inspections, and audits and enforcing these
regulations. (i.e., application fees, license fee, renewal fee, administrative fees)
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 4
OPTIONS:
The City Council has the following options to consider on this matter:
1. Adopt urgency ordinance effective immediately.
2. Modify urgency ordinance and adopt effective immediately.
3. Direct staff to return with more information.
4. Take no action.
RECOMMENDED ACTION:
Hold a public hearing and adopt urgency ordinance by a vote of 4/5 of the Council.
ATTACHMENTS
1. Urgency Ordinance Adding New Chapter 10.96 to the San Rafael Municipal Code
CITY OF SAN RAFAEL
NOTICE OF PUBLIC HEARING
CONSIDERATION OF AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF SAN RAFAEL AMENDING TITLE 10 OF THE
SAN RAFAEL MUNICIPAL CODE TO ADD NEW CHAPTER
10.96 REGULATING CANNABIS BUSINESSES WITHIN CITY
LIMITS AND SPECIFICALLY AUTHORIZING BY LICENSE
MEDICAL CANNABIS DELIVERY, MEDICAL CANNABIS
PRODUCT MANUFACTURING, AND CANNABIS TESTING
DATE/TIME: Monday, December 4, 2017 at 7:00 p.m.
LOCATION: City Council Chambers, 1400 Fifth Avenue, San Rafael, CA
PURPOSE: To receive public comments and consider adoption of an ordinance
amending Title 10 of the San Rafael Municipal Code entitled
“Businesses, Professions, Occupations, Industries and Trades” to
add a new chapter 10.96 entitled “Medical Cannabis Business”.
The proposed ordinance would provide for the orderly regulation of
the medical commercial cannabis industry within the City of San
Rafael with the intent of encouraging economic growth and job
creation while protecting the public health, safety and welfare of the
residents and patients of the city. The proposed ordinance would
authorize by local license three types of medical cannabis
businesses: (1) Medical Cannabis Delivery requiring a
corresponding Type-9 Non Storefront Retailer state license to
conduct retail cannabis sales exclusively by delivery; (2) Medical
Manufacturer requiring a corresponding Type N, M state license to
produce edible products or topical products using infusion
processes, or other types of cannabis products other than extracts
and concentrates, but do not conduct extractions; and (3) Testing
Laboratory requiring a corresponding Type 8 state license to offer
or perform tests of cannabis or cannabis products. The proposed
ordinance would also prohibit all other types of cannabis business
(medical or nonmedical) that are not of the three designated
licenses outlined above. The proposed ordinance requires a
licensed medical cannabis business to obtain a valid state license
in addition to a City license and to comply with the City’s business
license tax requirements. The proposed ordinance also prohibits all
commercial or personal cultivation of cannabis within the City, for
nonmedical or medical use, except as provided by State law and
makes any violation of the new Chapter a public nuisance.
IF YOU CANNOT You may send a letter to Esther Beirne, City Clerk, City of San
ATTEND: Rafael, P.O. Box 151560, San Rafael, CA 94915-1560. You
may also hand deliver a letter prior to the meeting.
FOR MORE
INFORMATION: You may contact Danielle O’Leary, Director of Economic
Development and Innovation at (415) 485-3460 for more
information, Monday through Friday, 8:00 a.m. to 5:00 p.m.
SAN RAFAEL CITY COUNCIL
/s/ Esther Beirne
ESTHER BEIRNE
CITY CLERK, CITY OF SAN RAFAEL
American Sign Language interpreters and assistive listening devices may be requested by
calling (415) 485-3198 (TDD) or (415) 485-3085 (Voice) at least 72 hours in advance. Copies of
documents are available in accessible formats upon request. Public transportation is available
through Golden Gate Transit, Line 20 or 23. Paratransit is available by calling Whistlestop
Wheels at (415) 454-0964. To allow individuals with environmental illness or multiple chemical
sensitivity to attend the meeting/hearing, individuals are requested to refrain from wearing
scented products.
(Please publish in the Marin Independent Journal on Friday, November 24, 2017.)
STAFF REPORT APPROVAL
ROUTING SLIP
Staff Report Author: Danielle O’Leary Date of Meeting: 12/04/2017
Department: Economic Development
Topic: Medical Cannabis Regulation
Subject: Medical Cannabis Update and Ordinance
Type: (check all that apply) ☐ Consent Calendar ☒ Public Hearing
☐ 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 ☐No Date noticed: ☐Mailed ☐Site posted ☐Marin IJ
Due Date Responsibility Description Completed
Date Initial / Comment
DEPARTMENT REVIEW
FRIDAY noon
11/17
Director Director approves staff
report is ready for ACM,
City Attorney & Finance
review.
11/17/2017
☒
DO
CONTENT REVIEW
MONDAY
morning
11/20
Assistant City Manager
City Attorney
Finance
ACM, City Attorney &
Finance will review items,
make edits using track
changes and ask questions
using comments. Items will
be returned to the author
by end of day Wednesday.
11/21/2017
11/28/2017
11/22/2017
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RW
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LG
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MM
DEPARTMENT REVISIONS
WEDNESDAY
noon
11/22
Author Author revises the report
based on comments
receives and produces a
final version (all track
changes and comments
removed) by Friday at
noon.
11/22/2017
☒
DO
ACM, CITY ATTORNEY, FINANCE FINAL APPROVAL
MONDAY
morning
11/27
Assistant City Manager
City Attorney
Finance
ACM, City Attorney &
Finance will check to see
their comments were
adequately addressed and
sign-off for the City
Manager to conduct the
final review.
11/28/2017
11/28/2017
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enter a date.
☒
CA
☒
LG
☒
TUES
noon
11/28
City Manager Final review and approval 11/29/2017 ☒
JS